When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Global Market Comments
April 22, 2025
Fiat Lux
Featured Trade:
(THE GOVERNMENT’S WAR ON MONEY)
(TESTIMONIAL)
When I lived as a student in West Berlin during the 1960s, I had a nice little side business.
I organized weekend walking tours through the Berlin Wall at Checkpoint Charlie to visit East Berlin for American students too afraid to go alone.
To pay for it, I smuggled in my boots Ostmarks, the currency of East Germany, which I could buy at a 75% discount to the official price in West Berlin. I then covered lunch and all my other bills very cheaply, booking a nice profit on the day.
That would be much more difficult to pull off today, as governments around the world have launched a war on cash that will not end until its ultimate demise.
The truth is, governments hate cash.
This became clearly apparent when the government of India withdrew circulation of its two largest banknotes last year. Some 50% of Indian GDP is thought to take place in the underground economy, in cash only.
The move caused a financial panic as consumers sold gold (GLD) and other hard assets to meet bills because they were unable to settle accounts with the large denomination notes they had hoarded.
As we move towards an all-electronic economy, the few remaining purposes where cash is essential are largely illegal.
Waitresses, babysitters, and bookies don’t report income to the IRS. Nor do drug dealers.
This is a big deal because eight states legalized marijuana in the last election.
Since banks are still banned from handling pot proceeds, this booming business has to take place entirely in cash. Tales about dealers making their runs with gym bags full of $100 bills are rampant.
The IRS estimates that $460 billion in tax revenue is lost every year through unreported income, which is largely earned in cash.
Some half of the entire US paper money supply is held by foreigners, where it is used to evade taxes, bribe foreign officials, and finance terrorism.
The US government’s war on cash is not a new thing. In 1929, it cut the size of US banknotes by one-third to save money on the cost of high-grade paper.
In 1970, the US Treasury banned the circulation of the $10,000, $5,000, $1,000, and $500 bills to halt mafia money laundering. Since then, the IRS has been the biggest beneficiary of the move.
Large denominations of US bills are now solely the domain of collectors.
The US government would love to get out of the cash business entirely, as it is so expensive to run. It spends about $737.4 million a year just to print American $1, $2, $5, $10, $20, $50, and $100 notes.
Paper dollar bills, which are actually made of 75% cotton and 25% linen, are completely worn out and have to be returned in only 18 months.
Coins are even a bigger loser. It costs more than two cents to make a penny.
Since the advent of color printers, counterfeiting has exploded. North Korea runs almost its entire economy on fake $100 bills, which are said to be the best in the world. Only a handful of specialists at the US Treasury can identify them under a high-powered microscope.
Today, some 80% of the entire $1.34 trillion M1 notes and coins in circulation in America are in the form of $100 dollar bills. That works out to $4,200 per person. Where has all that money gone?
The US is now considering eliminating even this convenient denomination. While $1 million in $100s can fit into a tote bag, that quantity of $10 bills would weigh 220 pounds, a quantity much more difficult to sneak around.
An all-electronic economy would certainly pose some privacy problems, as it would leave a massive paper trail on everything you do.
When you get audited by the IRS, the first thing they do is obtain your past three years of bank and credit card records detailing your every transaction. If the inspection goes criminal, they go back six years.
State authorities will pursue phone records to establish your physical presence to verify residency. So, how long did you really spend in tax-free Florida last year?
It would also pare back illegal immigration, as this is another industry that runs entirely on cash. Once here, undocumented workers are often paid in cash in restaurants and on construction sites.
There is truly no place to hide.
Other countries are already well ahead in the war of cash. In Belgium, some 93% of all financial transactions take place electronically.
Sweden has also been pushing hard on this front, taking the M1 money supply there down by 27% over the past two years.
Many small businesses there now post signs saying they don’t accept cash. The goal is to move to an all-electronic economy.
The preferences of Millennials are also moving us towards a cashless economy.
Have you ever been in line at Starbucks and noticed that the kid in front of you just paid $5 for a cup of coffee with his credit card? Or maybe he swiped his Apple Pay account on his iPhone? The last time I handed them a ten-dollar bill, they said, “Oh, dinosaur money.”
Whatever that means, it is clear that hard cash is about to become extinct, just like the Brontosaurus and the Tyrannosaurus Rex.
The confidence you have given me to enter the USD:JPY spot positions have returned me in excess of $1,500,000 in the last few weeks.
I'll be in California next year.
Can't wait to catch up. Dinner is on me, both times!
I know you said you aren’t retiring until you’re well into your seventies. Why so soon?
You're welcome to use this as a testimonial.
Cheers
Peter,
Australia
"Sometimes we stare so long at a door that is closing that we see too late the one that is open," said Alexander Graham Bell, inventor of the telephone.
The legal system, a cornerstone of societal order, is on the cusp of a profound transformation. Artificial intelligence (AI), with its rapidly advancing capabilities in data analysis, natural language processing, and pattern recognition, is poised to permeate nearly every aspect of how laws are made, interpreted, and enforced. While the full extent of this influence remains to be seen, the trajectory suggests a future legal landscape significantly shaped by algorithmic intelligence. This article delves into the potential ways AI could influence the future legal system, exploring both the opportunities for increased efficiency and access to justice, as well as the inherent challenges and ethical considerations that must be addressed.
I. AI in Legal Research and Discovery: Unearthing the Truth with Unprecedented Speed
One of the most immediate and impactful areas where AI is already making inroads is legal research and discovery. Traditionally, lawyers spend countless hours sifting through vast volumes of case law, statutes, regulations, and other documents to find relevant precedents and evidence. AI-powered legal research tools can analyze these massive datasets with unprecedented speed and accuracy, identifying key information and connections that human lawyers might miss.
Imagine a future where AI algorithms can instantly scan millions of documents to identify all relevant case law on a specific legal issue, complete with summaries and analyses of how different jurisdictions have approached similar matters. This could drastically reduce the time and cost associated with legal research, allowing lawyers to focus on more strategic and nuanced aspects of their cases. Similarly, in the discovery phase of litigation, AI can be used to efficiently review and categorize vast amounts of electronic documents, identifying key evidence and potential inconsistencies far more effectively than manual review. This could streamline the litigation process, reduce discovery costs, and potentially lead to faster resolutions.
II. AI in Contract Drafting and Analysis: Automating the Mundane, Enhancing Precision
Contract drafting and analysis are other labor-intensive areas ripe for AI disruption. AI-powered tools can analyze existing contract templates, identify common clauses, and even suggest optimal language based on specific legal requirements and industry standards. This can automate the creation of routine contracts, reducing the risk of errors and freeing up lawyers to focus on negotiating complex terms and addressing unique circumstances.
Furthermore, AI can be used to analyze existing contracts for potential risks, inconsistencies, or non-compliance issues. Imagine an AI system that can quickly review a portfolio of hundreds of contracts, flagging clauses that deviate from standard terms, identify potential breaches, or highlight areas of contractual ambiguity. This could significantly enhance risk management for businesses and provide lawyers with valuable insights for advising their clients.
III. AI in Predictive Analytics: Forecasting Legal Outcomes and Informing Strategy
Perhaps one of the most transformative potential applications of AI in the legal system lies in predictive analytics. By analyzing historical case data, judicial decisions, and even the behavior of individual judges, AI algorithms could potentially forecast the likely outcomes of ongoing or future legal cases.
Imagine a lawyer being able to use an AI tool to assess the probability of success in a particular lawsuit based on the specific facts, the jurisdiction, and the presiding judge's past rulings. This could provide invaluable insights for advising clients on whether to settle a case, proceed to trial, or pursue a particular legal strategy. While the legal system is inherently complex and influenced by numerous unpredictable factors, AI-powered predictive analytics could introduce a new level of data-driven decision-making into legal strategy.
IV. AI in Dispute Resolution: Facilitating Efficiency and Access to Justice
AI could also play a significant role in transforming dispute resolution mechanisms. Online dispute resolution (ODR) platforms, powered by AI, could facilitate negotiation, mediation, and even arbitration processes more efficiently and accessibly.
Imagine AI-powered chatbots guiding parties through initial negotiation stages, identifying potential areas of compromise based on their stated positions. AI algorithms could also analyze past mediation outcomes to suggest settlement ranges or even act as neutral facilitators in certain types of disputes. For individuals who cannot afford traditional legal representation, AI-powered ODR platforms could provide a more affordable and accessible means of resolving conflicts.
V. AI in Criminal Justice: Balancing Efficiency with Fairness and Equity
The application of AI in the criminal justice system presents both significant opportunities and profound ethical challenges. AI-powered tools are already being used in areas such as risk assessment, predictive policing, and forensic analysis.
Imagine AI algorithms analyzing vast datasets of criminal records to assess the likelihood of a defendant reoffending, informing decisions about bail, sentencing, and parole. Predictive policing algorithms could analyze crime data to identify potential hotspots and allocate law enforcement resources more efficiently. AI is also being used to enhance forensic analysis, such as analyzing DNA evidence or identifying patterns in crime scene data.
However, the use of AI in criminal justice raises serious concerns about bias, fairness, and due process. AI algorithms are trained on historical data, which may reflect existing societal biases, potentially leading to discriminatory outcomes. Ensuring transparency and accountability in these AI systems is crucial to prevent the perpetuation or even amplification of inequalities within the legal system.
VI. The Ethical and Legal Challenges of AI in Law: Navigating the Algorithmic Frontier
The increasing integration of AI into the legal system brings forth a host of complex ethical and legal challenges that must be carefully considered:
VII. The Future of the Legal Profession: Collaboration Between Humans and Machines
The future legal system is unlikely to be one where AI completely replaces human lawyers and judges. Instead, a more probable scenario is a collaborative partnership between humans and machines. AI will likely handle routine tasks, analyze vast amounts of data, and provide valuable insights, while human legal professionals will focus on strategic thinking, complex legal reasoning, client interaction, and ethical considerations.
The legal profession of the future will require lawyers to develop new skills in working with AI tools, understanding their capabilities and limitations, and critically evaluating their outputs. Legal education will need to adapt to equip future lawyers with the knowledge and skills necessary to navigate this evolving landscape.
Conclusion: Embracing the Potential, Navigating the Perils
Artificial intelligence holds immense potential to transform the future legal system, offering opportunities for increased efficiency, enhanced access to justice, and more data-driven decision-making. However, realizing these benefits while mitigating the inherent risks requires careful consideration of the ethical and legal challenges that accompany this technological revolution. By proactively addressing issues of bias, transparency, accountability, and the preservation of human judgment, we can strive to create a future legal system where AI serves as a powerful tool for upholding the principles of justice and the rule of law. The algorithmic scales of justice are being calibrated, and it is our responsibility to ensure they weigh fairly for all.
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Mad Hedge Technology Letter
April 21, 2025
Fiat Lux
Featured Trade:
(DIFFICULTY OF DOING BUSINESS FOR CHIP COMPANIES)
(NVDA), (TSM), (HUAWEI)
The U.S. appears to have made a massive blunder in its chip control blocking of China.
The U.S. Commerce Department said last week that Nvidia’s H20 graphics processing units — designed to comply with previous U.S. restrictions — would now require export licenses, as would additional chips from AMD. Nvidia says it has already halted exports of the GPUs, resulting in a quarterly charge of approximately $5.5 billion.
Could this be an example of the government getting in its own way?
Examples of these local AI chipmakers include tech powerhouse Huawei and the partially state-owned and publicly listed Cambricon Technologies, which designs GPUs.
Shares of Cambricon were up over 10% in the past five trading days amid news of the latest Nvidia controls. The stock is up over 400% in the past 12 months.
Can China fill the gap?
Huawei is the clear leader in China’s race to find an Nvidia competitor. The U.S.-blacklisted company has been working on its own improvements to compete with the leading technology.
Huawei remains about a generation behind in chips, but that won’t be the case for long.
Because TSMC’s chipmaking equipment includes U.S. technology, the company has complied with U.S. trade restrictions on Huawei and the shipment of advanced chips to China. That has left Chinese companies increasingly reliant on domestic foundries like Semiconductor Manufacturing International Corporation.
Nevertheless, SMIC is under its own export controls, which prevent it from accessing some of the world’s most advanced chipmaking equipment.
Are export controls working?
Chinese chip makers won’t need to immediately fill this H20 demand thanks to stockpiles and previous export exemptions and loopholes.
The U.S. government’s aggressive policy against the semiconductor industry is backfiring.
It is interesting that the Federal government never takes into consideration that loopholes and workarounds are possible and what the aftereffects are.
Sanctions can usually be subverted by using a third country to move the goods, and that is what we are seeing.
The end result is higher prices for all.
In general, an increase in the price of semiconductor chips would result in anything tech-related going up in price, and that is after a generation of deflation made devices cheap.
This also raises the price of doing business in AI. The GPUs needed for AI data centers will become more costly.
I could envision the future where harnessing AI software might be reserved for the well-off, because it won’t be cheap to use.
Each pressing day, the cost of business goes up as the globalization trends from post-World War 2 are being ripped to shreds by the existing administration.
Deglobalization is painful for the average person, but when you add on a tech sector in dysfunction, it really turns the screws on the investors.
What’s the end result?
In the short-term, semiconductor stocks will cool off because government obstruction means it is way harder to do business, let alone at profitable prices.
This restriction, this tariff, this rule, this forced export control, and the circus keep going with corporate management wishing one day to operate in a stable business environment.
Nothing is stable about the business environment now, forcing investment dollars to the sidelines.
In the short-term, sell any bear market rally in chip stocks.
