- This AI can explain its own reasoning…
- One of the top blockchain projects to keep our eyes on…
- Don’t let the news headlines scare you…
After all we’ve been through… After all the restrictions that we’ve had to endure – that we now know have been ineffective… After the lies that we now know we were told, here is what he had to say about the virus:
This is not going to be eradicated and it’s not going to be eliminated.
These are the words of Dr. Anthony Fauci, who in the past told us that wearing masks and taking the COVID-19 “vaccines” would stop us from getting COVID-19 and spreading COVID-19. This is quite the reversal of position… again.
He went further, saying:
And what’s going to happen is that we’re going to see that each individual is going to have to make their calculation of the amount of risk that they want to take.
Even better, he delivered this one:
We’re at the point where in many respects… we’re going to have to live with some degree of virus in the community.
More than two years later, having suffered through a seemingly endless string of completely ineffective pandemic policies, that’s what he has to say to us? After criticizing the policies of states like South Dakota, Texas, and Florida – which we now know to have outperformed those states with the most restrictive policies – that’s his message?
Ironically, some of the most well-known and respected epidemiologists and virologists have been saying the same things throughout the pandemic… And their positions were based on scientific research.
Their recommendations were focused on far more pragmatic and effective policies, centered around early treatment, and protecting those who are most at risk from severe illness. These are approaches that we now know to be effective.
Yet those same physicians and scientists were censored, banned, and deplatformed. Many had their careers ruined for being truthful about the science behind our immune systems, an aerosolized virus, how it spreads, and putting relative risk into context.
What Fauci and his ilk should be saying right now is “I’m sorry. We apologize, we were wrong.” And everything should be done to restore the reputations of those who were right all along and worked tirelessly to affect a better outcome for all.
Of course, we know that won’t happen. The mainstream media will conveniently forget and focus on something else. Worse yet, I expect that they’ll keep doing more of the same.
Just today, the Centers for Disease Control and Prevention (CDC) announced that it is extending the federal mandate to wear masks on public transportation for at least another two weeks. To what end? For what purpose?
These arbitrary policies are not based on any scientific research. The fact that the CDC continues down this nonsensical path tells us that they are preparing us for a return of restrictions in the fall.
The BA.2 variant is now the dominant strain of COVID-19 in the U.S. It is less dangerous than Omicron, which was/is less dangerous than a strain of influenza. In the fall, there will be another variant spreading that will be even weaker than BA.2. It’s endless.
Enough is enough. Fauci just threw the towel in the ring. The game is over… We all should do the same.
AI is about to eclipse the average human understanding of language…
Google just made another major breakthrough in the field of artificial intelligence (AI). I’m not sure if we’ve all noticed, but these developments are happening at an ever-increasing and more frequent pace.
The tech giant announced a new natural language processing (NLP) model, called Pathways Language Model (PaLM). And it was trained on a massive 540 billion parameters.
PaLM is what’s called a large language model (LLM). It requires an immense amount of processing power to run.
In fact, Google used 6,144 application-specific semiconductors to train the AI. That’s basically a massive data center used exclusively for PaLM.
While the subject matter may seem complex, below is a simple chart demonstrating the importance of the breakthrough:
Language Model Performance
The blue line represents the performance of the latest language model – PaLM. We can compare PaLM’s progress to Google’s previous model, Gopher, represented by the orange line.
And we can clearly see that PaLM has made incredible improvements. Now, look at what’s just happened…
That light gray dashed line represents the average human language processing ability – PaLM just surpassed it. The AI can now understand human language better than an average human.
That may or may not sound impressive (it is), but what comes next will be extraordinary. The key thing for us to understand is what happens as we extrapolate the rapid increase in language model performance one more cycle.
If we come back to this graph in 12–18 months, we will likely see that PaLM is at the dashed black line at the top – that represents the language-processing capacity of humans who rank among the best in terms of ability.
At that point, Google’s AI will be a better communicator than most humans on the planet. It certainly would pass the Turing Test, where most would not know that they were talking to an AI.
That’s both exciting – and at the same time – somewhat scary. When we can interact with AIs at the same level as an intelligent human, our world will change radically.
To put PaLM’s advancements into further context, have a look at the progression of language processing. PaLM is now capable of what’s called a “chain of thought prompting.”
Here’s a visual of what that means:
Chain of Thought Prompting
On the left here, we can see what AIs have been capable of, up to this point. The AI is given a simple word problem and asked to solve it. So it does that, in simple language.
We can see that the AI got the first word problem right. However, it was way off on the second problem… but we don’t know why. The AI isn’t capable of explaining itself.
Now, look at the chain of thought prompting on the right. Not only does the AI get both problems right, but it also explains its reasoning.
This breakthrough is something that will be put to work this year, and it will find its way into all sorts of applications.
After all, this AI technology can now understand, process, and respond as well as an average human. And in some cases, the AI will be able to explain its reasoning.
This is going to be a huge breakthrough for certain uses of AI.
For things like my own neural network – the Perceptron – that I use in my new trading research Neural Net Profits, it’s not critical to understand exactly how the AI comes to its conclusions. The only thing that is important is that it comes to the right conclusion.
But for other kinds of uses, it is useful and sometimes important that we understand how the answer or conclusion was determined.
The latest breakthrough is material, and while it will take some time for industry to work this technology into products and services that we use in our lives, it is going to happen far more quickly than most of us think.
One of the hottest blockchain projects of the year…
Blockchain project LayerZero just raised $135 million in a funding round led by heavy hitters Sequoia Capital, Andreessen Horowitz, and digital asset exchange FTX.
Any raise backed by these best-in-class investors is impressive. What’s more, the round values LayerZero at $1 billion.
For context, this is a company that barely existed a year ago. Now it’s a unicorn. That doesn’t happen very often.
And, of course, there’s a reason for all this excitement. LayerZero is tackling a difficult problem – interoperability. This refers to the ability for different blockchains to effectively communicate with each other.
In other words, it’s about connecting decentralized applications across blockchains. LayerZero refers to this as “omnichain” interoperability.
This is a hot area in the blockchain industry right now.
There are so many important blockchains that have been developed, it is critical that the industry has ways to communicate across them. Otherwise, we’ll end up with a highly fragmented ecosystem which will not lead to mass-market adoption.
LayerZero has developed an interesting messaging protocol to tackle this problem. It allows users to send messages and assets across blockchains.
In some ways, this system is an analog to the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system.
The SWIFT system allows banks to wire money from one country to another. Similarly, LayerZero will allow transactions from one blockchain to another, or even across multiple chains.
LayerZero has already built interoperability support for some of the most prolific blockchains in use today: Ethereum, Arbitrum, Avalanche, Fantom, Polygon, and Optimism. And the team is looking to add support for Solana and Terra in the next few months.
This is a major development in the industry. It has the potential to make the best blockchain applications functional across the entire ecosystem. And this has particularly interesting implications for non-fungible tokens (NFTs).
We have highlighted numerous NFT projects over the last several months. And as we discussed yesterday, the use of NFTs continues to gain momentum.
However, one of the pain points right now is that each NFT collection is minted on one specific blockchain, and that’s where they have to stay. So any NFTs minted on Ethereum cannot be moved over to Polygon, even if the owner would like to do so to take advantage of lower transaction fees.
That’s where LayerZero’s tech comes in: As it develops, LayerZero could build the functionality to move NFTs across different blockchains. Each NFT owner could decide exactly which blockchain they want to hold their NFT on.
This kind of functionality simplifies adoption and allows for cost structures appropriate to an individual asset. And of course, the complexity behind being able to do this will largely be in the background.
Consumers won’t have to worry about it, much in the way that we don’t necessarily see or understand how e-mails are sent and received today.
LayerZero is another tailwind supporting the proliferation of NFTs… And it’s why I’ve been working hard to help my readers invest in this space. (Go right here to learn more.)
How I know the economy is not about to collapse…
It’s certainly been a volatile start to 2022.
As I write, the S&P 500 is down 6%. The Nasdaq Composite is down nearly 13%. War broke out in Eastern Europe. And inflation in the U.S. has now eclipsed 8.5%.
If we pay attention to the mainstream news, there’s a lot of doom and gloom out there. We might even get the sense that the economy is about to collapse.
But it’s not.
The economy is incredibly vibrant right now. And here is a great way to “see” it:
This is a chart of global semiconductor sales going back to 1996. The blue line represents total sales, which are recorded as monthly semiconductor sales. And the red line represents year-over-year growth in sales.
As we can see, we have been breaking out to new all-time highs in terms of semiconductor sales nearly every month since the start of 2020. And sales just in February of this year alone topped $52.5 billion… a 32.4% year-on-year increase.
These are absolutely extraordinary numbers.
For context, semiconductors go into every single product that contains electronics… which is nearly everything these days.
So when semiconductor sales are high, that means the companies who make electronics products are ramping up production. And of course, they only do this when there is elevated consumer demand in the marketplace.
Put another way, semiconductor sales are a great proxy for economic activity.
That’s one of the key reasons that we know that the world isn’t ending… and the economy isn’t on the verge of collapse. The data shows very clearly that there is robust economic activity taking place right now.
And here’s the most interesting part…
Semiconductor sales into the Americas, which predominantly consists of the U.S. market, are outpacing every other region. American sales were up over 43% year-on-year in February. This demonstrates that the American economy is still strong.
So let’s not let the news headlines scare us.
Yes, it’s been an uncomfortable year so far – But there are reasons to believe that the economy will continue to be strong as we move into the summer and the back half of the year. And that’s good news for the equity markets as well.
I’ll be tracking this graph of global semiconductor sales very closely as the data is released each month. If the lines start to turn down dramatically, that would be an early indicator of a weakening economic environment.
And of course, I’ll alert my readers accordingly… But until that happens, we should remain cautiously optimistic about the markets for the rest of 2022.
Editor, The Bleeding Edge
P.S. My State of the Tech Market strategy session is going offline this Friday. If you haven’t yet caught up, please make sure to do so before then.
There, I discuss even more about the state of the stock markets… inflation… and the one opportunity none of us should miss in this environment.
Go right here to watch before it disappears.
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