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Larry Page Invests To Change Your Daily Commute

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Larry Page Invests To Change Your Daily Commute

The future is here – flying cars may no longer be a fictional notion of futuristic and optimistic technological predictions, thanks to Google’s co-founder Larry Page.

Page has reportedly invested up to 100 million US dollars to fund two new startup companies, which are dedicated to the development of the technology which has up until now remained a distant yet somehow attainable possibility, represented in varying degrees of plausibility by fictional films and cartoons alike.

With just under $37 billion at his disposable, the 12th wealthiest person on the planet (according to Forbes Rich List) is also CEO of Google’s parent company, Alphabet, and has played a pivotal role in the development of Google from a fledgling search-engine startup.

Alphabet’s current status is that of a trustworthy source of information with respect to fact, fiction, and a power.

The company is in the position to take risks and gamble on everything from pictures of the moon, to curing devastating diseases, which is a testament to Page and his business partner Sergey Brim’s talent and track record.

Flying cars, however, is a notion that even Google seems to have found hard to believe in – there has been no support from Alphabet for this side-project.

Amidst tight security and secrecy, Page’s funding helped Zee.Aero take flight in their business venture and set up offices on Google property – land previously unheard of and impossible to secure for up-and-coming companies.

This in is itself was a curious move.

Even more so were the employee’s strict instructions to deflect questions from the public, should they ever be quizzed about the details of their new endeavors.

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Page’s desired anonymity within the company – know simply as ‘GUS’, or ‘the guy upstairs’ to employees- also made for an increase in public interest once his association became known.

Why keep his investments secret?

Zee.Aero was soon joined by Kitty Hawk on Page’s list of startup investment expenditure, as Google X’s  Sebastian Thrun of the research division decided to follow the flying car dream and take off with his startup effort.

Both companies aim to produce a small, self-sufficient and compact vehicle that can take off and land vertically.

With Kitty Hawk’s staff having been sequestered from the Zee.Aero original team, it’s difficult to understand the differences between each company’s designs as of yet, and calls into question the necessity for the division of the workforce in the first place.

Suffice it to say that both designs revolve around the production of a vehicle with the potential to change the daily commute forever.

As the leading airborne vehicle enthusiast, Paul Moller recalled a chance meeting with a young and idealistic Page at a talk on flying car technology in 2000, at the Palo Alto Research Centre (PARC) Page’s cautious questioning of the practicality of such a vehicle ultimately served him well.

As Moller’s determination and impatience to succeed let him declare bankruptcy in 2009.

Page’s contrasting careful planning and investment has evidently had some measure of success, however, as outside observers of both Zee.Aero and Kitty Hawk have noted regular test flights and safety checks of strange looking contraptions on the grounds of both companies.

Zee.Aero apparently has two prototype planes that it tests at grounds in the airport at Hollister, CA.

According to outside sources both designs are similar to a miniature version of the modern commuter plane – a bulbous cockpit with a slender body, yet the later design features several propellers along the sides.

Both vehicles reportedly seat one person, yet secrecy surrounding technical functions or details has prevented any further knowledge or insights to the mechanical aspects of them.

It is in part the secrecy surrounding the mysterious research and trials in advances to this transport system that makes it all so intriguing – why exactly did Larry Page feel the need to maintain such a strict level of security on his investments?

Why did the company seemingly split in two in the early days of production, leading Page to double his expenditure and form Kitty Hawk almost as an afterthought to Zee.Aero?

What exactly is this fascination with airborne transport that centuries after its discovery still seems to captivate us with its magical, almost dreamlike possibilities?

According to Bloomberg, the fascination with flying cars has long been a focal point of Northern California in particular, and with this in mind, it makes sense that any potential breakthrough in the technological advancement of the kind will eventually occur here.

While many dreams of achieving the goal, Larry Page has found himself in a position (and with enough money) to help fund the research and work that will (hopefully) drive us into the future that has been so often depicted on TV and film.

Trials, errors, and failures are all a part of the process of improvement and discovery, leading us to land at whatever destination required.

With the Google empire behind them, the potential and possibilities to Zee.Aero’s and Kitty Hawk’s research is endless.

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Dollar Will Plunge 35%, Lose Status As World Reserve Currency

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The US dollar is on the verge of a 35% collapse. It could also lose its status as the world’s reserve currency. This is according to Stephen Roach, a senior fellow at Yale University and the former chairman of Morgan Stanley Asia.

The reason, according to Roach, is the slow decoupling of the US from its trade partners. Along with this, another reason is the rise of China. He says China’s structural reform goes away from a manufacturing economy. Instead, it comes into a more service-oriented economy with a stronger consumer base. This could mean the days of the US dollar being the world’s reserve currency are numbered.

Merely suggesting that the US losing its reserve currency status is enough to bring out the critics. In an opinion piece he wrote for Bloomberg, Roach addresses those critics.

“Scorn has long been heaped on those daring to question the supremacy of the U.S. dollar,” he starts. “As the world’s dominant reserve currency…the counter-arguments were strong and highly political, basically boiling down to the so-called TINA defense – that when it comes to the dollar, ‘there is no alternative.'”

The Role of The Dollar

Roach says that even those that believe there is no alternative to the US dollar when it comes to international trade. The same goes for when the financial markets are being shortsighted.

“Alas, the TINA argument doesn’t stop there. The counter to my case for dollar weakness also rests on the reserve status of the U.S. currency as the linchpin of world financial markets. All trading nations, goes the argument, have to hold the dollar as the price for doing business in an increasingly integrated dollar-based world economy.

“Even so, the dollar’s share of official foreign-exchange reserves has declined from a little over 70% in 2000 to a little less than 60% today, according to the Bank for International Settlements. That downtrend could gather momentum in the years ahead, especially with the U.S. currently leading the charge in de-globalization and decoupling. With America’s share of reserves well in excess of its share in world GDP and trade, such a correction might well be inevitable in an increasingly fragmented, multi-polar world.”

The natural instinct for a weak dollar is to buy hard assets like gold. However, Roach says those markets are simply too small. They will not be able to absorb the tsunami of dollars looking for a new home.

“And although cryptocurrencies and gold should benefit from dollar weakness, these markets are too small to absorb major adjustments in world foreign-exchange markets where daily turnover runs around $6.6 trillion.”

Gold and cryptocurrencies are too small to benefit. Although, Roach says he does expect two currencies to strengthen as the dollar weakens: the Chinese renminbi and the euro.

Can It Be Replaced?

“On this basis, a forecast of a weaker dollar requires some combination of a strengthening in China’s renminbi and the euro…

“The China call is very contentious. From the trade war to the coronavirus war to the distinct possibility of a new Cold War, the negative case for China has never been stronger in the U.S. than it is today.”

“The call on the euro is also counterintuitive, especially for a broad consensus of congenital euro-skeptics like me… I now have to concede that reports of the euro’s imminent death have been greatly exaggerated. Time and again, especially over the past 10 years, Europe has risen to the occasion and avoided a catastrophic collapse of its seemingly dysfunctional currency union. From Mario Draghi’s 2012 promise to do “whatever it takes” to save the euro from a sovereign debt crisis to the recent Angela Merkel-Emmanuel Macron commitment to a Next Generation European Union Fund of 750 billion euros ($855 billion) to address the coronavirus crisis, the great European experiment has endured extraordinary adversity… there is unmistakable upside for the most unloved currency in the world.”

Roach ends his article by pointing out that no country has ever devalued its currency and enjoyed prolonged prosperity.

“If TINA is the dollar’s only hope, look out below… Yes, a weaker dollar would boost U.S. competitiveness, but only for a while. Notwithstanding the hubris of American exceptionalism, no leading nation has ever devalued its way to sustained prosperity.”

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Fed Keeps 0% Rates Until At Least 2022

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Fed Keeps 0% Rates Until At Least 2022

Confirming what many expected, the Federal Reserve announced yesterday that it will keep rates at zero percent for the foreseeable future, perhaps well into 2022.

During a press conference, Fed Chairman Jerome Powell said, “We’re not thinking about raising rates. We’re not even thinking about thinking about raising rates.”

The Fed did acknowledge that economic conditions “have improved” in the last few months. However, none of the members indicated an urgency to raising interest rates. In “dot plots,” each member plots their forecast for interest rates. However, in this case, only two of the 17 members saw a case for hiking rates in 2022.

The decision to keep rates at near-zero percent indefinitely is an attempt to get the economy back to where it was before the coronavirus pandemic. During the said pandemic shut down our country and plunged our economic output by an estimated 50% this quarter.

Optimistic Outlook

The outlook from Fed members is for real GDP to contract by 6.5% in 2020. This comes with an unemployment rate of 9.3% by the end of the year. The members are much more optimistic about 2021. Members projecting an unemployment rate down to 6.5% and real GDP reaching 5%.

There are already positive signs, with last week’s controversial jobs report showing 2.5 million jobs were added in May.

Powell cautioned, however, that the millions of jobs lost will unlikely return quickly, if ever.

He says that many businesses may simply not reopen. Alternatively, he also says that jobs eliminated during the pandemic may not exist in the “new world order.”

The Federal Reserve keeping rates low while printing trillions of dollars to help the country recover from the coronavirus pandemic. With this, there are some very real fears that inflation is going to spiral out of control. Many fear that this will soaring well above the Fed’s target of 2%.

Thus far, the Fed members seem unconcerned about the possibility of runaway inflation.

Plans and Expectations

The average Fed member expects inflation (as measured in core personal consumption expenditures) of just 1.0% in 2021, increasing slightly to 1.5% in 2021.

The Fed will also continue to do its part to keep liquidity in the markets by buying up assets including mortgage-backed securities and Treasurys. The FOMC told the New York Fed to keep purchases “at least at the current pace,” which indicates about $80 billion per month for Treasuries and about $40 billion per month for mortgage-backed securities.

These actions along with other quantitative easing measures have inflated the Fed balance sheet to a record $7 trillion, a number that Powell has indicated he is comfortable with.

During a webinar hosted by Princeton University a few weeks ago, Powell said that the Federal Reserve has “crossed a lot of red lines that had not been crossed before and I’m very comfortable that this is that situation in which you do that and then you figure it out afterward.”

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Stocks Rally as Oil, Jobless Claims Rocket Higher

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Stocks Rally as Oil, Jobless Claims Rocket Higher

The stock market rally continued yesterday with the Dow Jones Industrial Average jumping 2.24%, the S&P 500 gaining 2.28% and the Nasdaq up 1.72%.

Investors felt optimistic after President Trump tweeted that he had spoken with Saudi Arabian Crown Prince Mohammed bin Salman. Many were hoping that both Saudi Arabia and Russia were willing to end the price war and mutually agree to cut production by at least 10 million barrels per day.

“Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!” Trump tweeted.

However, some experts are doubting the reality of cutting production by such a significant amount.

Edward Marshall, a commodities trader at Global Risk, told The Wall Street Journal, “It’s physically impossible for Saudi Arabia and Russia to get 10 million barrels a day off the market—they’d burst their onshore storage and fill every ship in sight.”

News also broke that Saudi Arabia called for an emergency meeting of OPEC and other oil-producing countries. The country called for a meeting to talk about how they can stabilize the oil market. Prices have been in freefall since the last meeting ended without a production agreement beyond April 1.

This was enough to send oil prices rocketing higher. West Texas Intermediate crude gained as much as 34% intraday before settling at $25.32 per barrel, a 24.7% jump. This is its largest single-day percentage gain in history.

Even with prices moving higher, it may not be enough to prevent bankruptcies in the oil and gas sector. This wave of bankruptcies was kicked off by shale driller Whiting Petroleum Corp. on Wednesday.

Jobless Claims Set Record

The market’s rally yesterday came in spite of some very bad news early in the day. Initial jobless claims for the week ending March 28 came in at 6.6 million. This figure is nearly double the previous week’s then-record of 3.2 million.

To put this number in a historical perspective, prior to the last two weeks, the previous record number of claims in a single week sat at 665,000 in March 2009 during the Great Recession.

To put it simply, this week’s initial jobless claims number was equal to the total claims filed during the entire Great Recession.

Chris Rupkey, chief financial economist for MUFG Banks, wrote in an email, “We knew that massive job losses were coming because of reports that many workers were unable to file a claim for benefits even after waiting on line for hours. Everywhere you look Washington and state governments were not prepared for the rapid spread of the virus and the devastating damage that would be done to the economy if businesses were shut down and workers sent home.”

He added “In a normal recession, job layoffs build over the many months of recession until they peak. In this pandemic-based recession, the job losses are immediate where the economy’s weakest hour is right now.”

Why was the market able to rally despite historically bad jobless claims?

JJ Kinahan, chief market strategist at TD Ameritrade, says it’s possible that the market knows it’s going to get worse. He also mentioned that this number won’t seem as bad in the coming weeks.

“Overall this is a little bit of a victory in and of the fact that it was such a bad number and the market did kind of shake it off. It is also the market preparing for a lot more bad numbers.”

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