Global Market Watch for May 2nd, 2014
AI Possibilities – a Bad Hair Day?
QUESTION: Martin,
I just read an interesting article by Stephen Hawking extrapolating on both the benefits and dangers of AI.
He specifically referenced the dangers by saying “One can imagine such technology outsmarting financial markets, out-inventing human researchers, out-manipulating human leaders, and developing weapons we cannot even understand. Whereas the short-term impact of AI depends on who controls it, the long-term impact depends on whether it can be controlled at all.”
In my view, this flies in the face of the cycles, and in regards to you creating and bringing Socrates online, do you think AI will ever reach such a point? The capabilities of Socrates seem to be only the tip of the iceberg for what it can unleash and teach us.
Regards,
M
ANSWER: I do not believe that a computer will become conscious. The two primary theories that drive these ideas are (1) you are one day able to copy the human brain like a file to a computer and somehow therein is a conscious being, and (2) the theory that consciousness simply emerges from a certain amount of connecting data.
In both cases, this is somehow anticipating the creation of a soul. I do not believe we can accomplish that at all.
The fundamental aspect of AI boils down to two categories:
(1) The fake AI where by you create a bunch of data and you have an index that is merely parsed: i.e. I have a headache, fever, vomit, and have chills: The computer responds you have the flu. This is merely an expert system – not actually a reach thinking machine. There are versions like Apple’s Siri that are effectively just fancy look-ups.
(2) The real AI has to be able to research and create its own knowledge-base. This is our structural design and it is the only way to achieve real knowledge rather than a mere look-up.
I do not see it being possible to move to the dangerous mode of AI for that requires free will and consciousness that I do not see how to code assuming it is even possible.
In the physical sciences, we build from each person and retain that knowledge. In the social sciences, we retain nothing and start anew each and every time. In our most important aspects of social-economy that instigates war, we continually fly by the seat of our pants sticking our finger into the candle flame and expecting it not to burn.
What Stephen Hawking is saying is a what-if scenario that by no means are we close to such technology nor am I sure it can even be accomplished no less what would be the benefit of creating a computer that could have a bad hair day.
Gold for the Close
So far gold’s rally is an outside reversal to the upside on a daily basis, not weekly. The Weekly Bullish Reversal stands at 1336. Support lies at 1280-1272 for this week into next followed by 1240. Resistance starts at 1307 next week followed by 1331. Initial support will rise slightly to 1290.
We still see June and September as the key months ahead followed by next January. Keep in mind that a 3 year reaction from the 2011 high is 2014 but a 3 year from the highest annual closing is 2015.
It is looking more and more like we will see geopolitical on an international basis as well. These politicians on both sides are going to have a real problem when the economy in the US turns down. That is the only economy holding up the entire world right now. Once US consumers stop buying, the people will begin to rise up against government on a wide scale basis. Also keep in mind we have the US election in 2016 and there should be a sharp rise in third-party activity. We are also monitoring a rise in third-party activity everywhere including even in India. So there are a lot more political hot spots getting ready to bubble up to the surface.
London being Forced out of the EU?
The future of the City of London is under serious threat after the European Union’s highest court threw out a British legal challenge against plans for the new EU Financial Transaction Tax. This is most likely the final nail in the coffin of Europe for when this tax is implemented, it is hard to see how investment capital will survive.
Lawyer-politicians just do not understand that they may possess the power to write a law, yet they cannot comprehend the power to avoid the law. The Japanese evaded the tax increase with what people call the “hamster” approach. The Japanese used the last month before the VAT increase for massive hoarding. The tax was increased from 5 to 8 percent in April. Therefore, the Japanese bought many refrigerators and vacuum cleaners in March so much so it reached a 400% increase over the year before.
This is what government does not grasp. Raising taxes does NOT always lead to more revenue. The IRS data itself demonstrated that lowering the tax rate like lowering the price of computers, leads to higher sales volume and guess what – they made more money. If you want more money – lower the taxes and you will also create more jobs.
Socialist are all about punishing people who have more than they do. Placing a transaction tax on all financial transactions will simply reduce the number of transactions and lower investment even further. Unemployment in Europe as a whole is about 11.8% and among the youth (25 or less) it is over 60%.
While government blames the people for not paying more, they never blame themselves for being greedy, stupid, and the world’s worse managers.
This financial transaction tax may push Britain out of the EU for it will lose its financial market base. Already, volume in Singapore is starting to surpass that of London. The shift to Asia is in play and the higher these people keep raising taxes, the faster they will propel China to the number one economy in the world reducing the USA to number two. That seems to be what it will take to shock at least Congress into beginning to ask why.
Europe & Hunting Black Money
COMMENT: hi Martin,
This week I visited my local BNP Paribas bank in Belgium and had a brief chat with the manager.
I told her I have an account at [a Brokerage house]… from where I do some trading.
The reason I went to this broker is that the fees are only $1 per transaction, regardless the volume, on most stocks ….
She was surprised and never heard of this broker which has branches all over the world.
She advised me that I should keep evidence of the money that was sent to this broker from my Paribas account in case I would like to send some money back to any of the accounts I might have.
The government will ask where I got my own money from and would consider it as “black money” and would impose taxes on it + fine, if I cannot prove it was mine in the first place.
Kind regards,
P
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