Dear Reader,
Welcome to our weekly mailbag edition of The Bleeding Edge. All week, you submitted your questions about the biggest trends in technology. Today, I’ll do my best to answer them.
If you have a question you’d like answered next week, be sure you submit it right here.
What an interesting week we had. The U.S. economy contracted at an annual rate of nearly 33% in the second quarter, and the number of unemployment claims increased a bit from last week’s numbers with continuing unemployment claims roughly flat week on week.
Europe’s GDP drop was even worse, plummeting more than 40% last quarter.
Are there some bright spots? Definitely. Personal savings in the U.S. jumped 25.7% last quarter. It is smart and logical for consumers to be saving during a time of uncertainty. It also bodes well for when fear and uncertainty of the pandemic passes.
And it will pass.
In the U.S., the recent spike in new cases likely peaked a couple of weeks ago. Daily deaths, which include questionable data to begin with, are a lagging indicator. I predict that within the next three weeks, we will see those numbers turn down as well.
What we are seeing right now is simply a spread of COVID-19 to areas that were less exposed during the spring spread in March and April.
This is not distinct to the U.S. but an effect that we are witnessing in other countries as well. For example, New York, New Jersey, and Connecticut deaths are down to very low levels – sometimes single digits and even zero deaths on a few days.
This bodes well for a return to school in the fall in the states, regions, and countries that experienced an early spread.
Both the Netherlands and Sweden are great examples of balancing economic activity, schools, and its citizens’ freedoms while managing the spread in a controlled way that didn’t overwhelm their health care systems.
Let’s hope that rational, nonpolitical minds prevail and put the best interests of children first as we enter the weeks ahead.
Wishing all a great weekend.
Now let’s turn to our mailbag…
Earlier this week, we shared a story about a “robot home assistant” named the Stretch RE1 from a company called Hello Robot. I asked readers what they thought of this robot assistant. Would we want one in our homes? And readers of The Bleeding Edge were happy to share their thoughts…
Yes, I would buy one of these home-helper robots – especially if they can clean the bathroom! Only the price will have to have a zero knocked off of it before it becomes widely adopted. Speaking of robot helpers… I can foresee robots helping with everything from cleaning the house to mowing the lawn to trash carts that move themselves out to the curb and back.
– Martin C.
I would consider a robot for menial chores. Taking the laundry out of the dryer requires little effort. Folding the laundry is much more tedious. Will this robot do that?
– Elida J.
From the looks of that robot, it doesn’t seem to do large loads of laundry, and it may be difficult for it to pull clothes from top-load laundry. I think the robot needs to be more efficient at what it does. I think it would also put a dent in teaching my kids to be more responsible about cleaning up after themselves and just learning how to take care of themselves and not always have somebody do it for them.
– Steven B.
Hi, Jeff, Terry here, thank u again for another piece of great reading. My first thought of Rosie the Robot was comical until I thought of my wife… let’s face it: people who have the means to afford it will be interested. Just my early thoughts. Continued success.
– Terry S.
Thanks to all who wrote in with their thoughts. It’s great to see readers engaged with the topics we covered.
Martin, you’re correct. At $18,000, Stretch certainly isn’t cheap. But I predict the price is going to drop dramatically in the next two or three years and the next version of the product will be that much more functional.
How can I be so sure? Well, let’s just do some back of the envelope calculations.
The base of Stretch is very similar to iRobot’s autonomous vacuum cleaners – the Roomba series. I actually have one of the older versions from many years ago. It’s a great product that works very well, and I couldn’t ask for something simpler to use.
The highest-end Roombas run for over $1,000 today. Let’s add in another $1,000 for the high-tech camera and sensors on the top of Stretch, which allow it to “see,” and then another $500 for the additional hardware required for Stretch’s “spine,” telescoping arm, and “hand.”
That puts us at roughly $2,500. iRobot’s gross margins are around 45% as a company. Not a bad business. It’s not a stretch at all for us to envision a price tag of $2,499 and eventually much lower in volume production.
Home robotics are already cleaning floors, mopping, and even cutting grass. Check out Robomow RS630. It is even compatible with Alexa. You can actually say, “Alexa, please mow the lawn,” and the Robomow will get to work for you.
A Robotic Lawnmower
Source: Robomow
And I have even seen some prototypes that have been able to fold laundry… no kidding.
That’s not to mention all the fantastic educational robotic systems that are available and affordable to help kids get excited about software coding and robotics.
The reality is that the tech exists today. We are on the slippery side of the slope where prices will begin dropping dramatically, making the technology simple and accessible to a much larger part of the population.
And we shouldn’t worry. Companies like Hello Robot will go on to raise $100 million or more and release their next versions of these robots with stronger arms, more dexterous hands – and yes, the ability to manage large, heavy loads from a top-loading laundry machine.
Just imagine how much time it will save us all…
This next question was directed at my colleague Chris Lowe, editor of The Daily Cut. Chris occasionally asks me to weigh in on questions his readers send in. And he asked me if I could weigh in on the topic of a “FedCoin.”
FedCoin… I suppose in the end, we will have no choice but to sign up. I will hold out as long as I can. My real concern is, they can and will force FedCoin on us, so what does that do for those of us who can use gold and silver? Any idea on how they plan to control those transactions?
– Richard H.
Hi, Richard. I think I can answer your question.
For readers who don’t know, “FedCoin” is the name some have used to refer to a state-backed digital U.S. dollar. And I’m on record saying that 2020 will be the year that the world sees the first state-issued digital currency.
But I’ll issue one caveat: It likely won’t be the United States that accomplishes this task first.
In April of this year, the state-owned Agricultural Bank of China released a test application for smartphones for the People’s Bank of China (PBOC) digital currency project.
That’s right – China is testing out the consumer side of its central bank digital currency (CBDC).
We can think of this CBDC as being similar to a cryptocurrency like bitcoin with one major difference.
Unlike bitcoin, this CBDC would not be a decentralized technology architecture or transparent. It would be under the strict control of the Chinese government.
It’s important to note that the Agricultural Bank of China is one of the country’s largest banks. The fact that this bank is launching a testing application for China’s CBDC is a big deal.
Clearly, China is very close to launching its digital currency.
And here’s my prediction: If China’s version of a “FedCoin” is successful, it will ignite a fire under the United States to do the same. We already know that the Federal Reserve is well aware of this idea.
Fed Chair Jerome Powell wrote in a letter to Congress stating as much:
A number of central banks are actively exploring central bank digital currency options, and the Federal Reserve is monitoring these developments closely. Further, while we are not currently developing a central bank digital currency, we have assessed and we continue to carefully analyze the costs and benefits of pursuing such an initiative in the U.S.
Keep in mind that this letter was written in November 2019. That was well before the world was aware of COVID-19 and the looming demand for contactless payments.
In many ways, COVID-19 has been an accelerant for the idea of a digital currency. Some businesses are no longer accepting cash out of fear of transacting with “dirty” physical money.
And an early draft of the COVID-19 stimulus bill even included a proposal for a U.S. digital dollar. That proposal was ultimately scrapped from the final bill, but it demonstrates that this idea is gaining traction.
There are benefits to a digital dollar. For starters, the federal government could simply “airdrop” stimulus money into our digital wallets. Compare that to the tedious process of direct deposits and mailing physical checks that we saw earlier this year. And those applying for PPP (Paycheck Protection Program) loans would also receive their funds quicker.
But this would also enable the federal government to have even tighter control over the U.S. dollar. Federal agencies would be able to track and tax every single transaction we ever make. The Internal Revenue Service (IRS) would have a field day.
As for your question, Richard, would a U.S. digital dollar prevent us from purchasing precious metals like gold and silver? Highly unlikely.
And I doubt it would ever restrict you from conducting business in gold and silver, but I am certain that both the IRS and your local tax authorities will fully expect you to pay taxes on any transactions you make.
When a FedCoin is issued, the government will certainly begin the process of removing all paper bills and coinage from the system.
There won’t be a need for them anymore. And I expect that a small population of the country will flock to hard assets, knowing that the value of the FedCoin will continue to drop as the government simply “prints” more digital currency.
Will the government go to the same lengths as it did back in 1933? That’s when Franklin D. Roosevelt signed Executive Order 6102, which forbade “the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.” The official reason was that hoarding gold would stall economic growth during the Great Depression.
I doubt that this would happen again. It just wouldn’t make sense. With paper and coins removed and the only mainstream way to pay for transactions being the FedCoin, the government wouldn’t really care if some of us bought and held gold and silver.
But there is one more thing I would mention…
In my mind, state-backed and even company-backed digital currencies are inevitable. But 99% of investors are so distracted by a “FedCoin” that they’re missing the bigger picture.
When these new digital currencies do arrive, it will raise the profile of one technology: blockchain. And investors positioned in a handful of blockchain stocks could see triple-digit returns in the years ahead.
I’ve outlined my favorite blockchain investments in a free presentation. You can watch it right here.
Dear Jeff Brown, would you mind sharing your thoughts on senolytic drugs?
I’m curious about where you think the development of these medicines is and how soon you think they could be brought to market.
Such drugs could improve the lives of millions feeling the effects of old age, as well as allow many near-retirees to continue working if they haven’t saved up enough. I assume you would have an opinion, as you track the biotech sector and this would almost certainly be a great investment opportunity should it arise.
Before I finish, I have two more questions. Do you feel like these drugs really will deliver everything they seem to promise?
If so, will it actually improve the quality of life of the millions who would receive these therapies, or will continuing the grind of work long after an individual would retire today be more detrimental to their health long term? Thank you so much for your time!
– Brigham M.
Thanks for your question, Brigham.
I’m guessing most of us have never heard about “senolytic drugs” before. It’s an emerging therapeutic approach with an ambitious goal: Treat ailments that cause aging in human beings.
At a very high level, senolytics is a branch of medicine that studies what is known as “senescent cells.” In essence, a senescent cell is one that has stopped the process of cell division.
These cells have been referred to as “zombie” cells, and they proliferate as we age. They emit substances that can cause age-related ailments like inflammation and tissue damage.
In essence, senolytic drugs are therapies designed to target these zombie cells and remove them. The idea is that this process could one day lead to increased life spans, better health, and reduced symptoms of aging.
There has been some research in this field. In 2016, a team at the University of Connecticut’s Center on Aging teamed up with the Mayo Clinic to study senolytic therapies in mice. The trial results are probably best known for producing a photograph of two aged mice born from the same litter.
Normal Mouse vs. Senolytic Treated Mouse
Source: Jan van Deursen
The mouse on the right was treated with the senolytic therapy. It appears larger, glossier. The mouse on the left is a naturally aged rodent. It is shrunken, has grey hair, and looks more like what we would expect from an old mouse.
The big question that remains is if senolytic therapies can safely and effectively be used in humans. In 2019, researchers from UT Health San Antonio conducted very early human trials with senolytic therapies. And the researchers presented some interesting results.
Following the therapy, observed mobility in the patients was recorded. Activities like a six-minute walk test, grip strength, and sitting-to-standing performance improved. The researchers said the findings were “preliminary but encouraging.”
As far as investment targets go, a few biotech companies are working with senolytic therapies.
Unity Biotechnology trades under the ticker UBX. Its stated mission is “to extend human health span, the period of one’s life unburdened by the disease of aging.” Jeff Bezos’ Bezos Expeditions and the Rockefeller family’s Venrock venture capital firms were among the early backers.
Another interesting company to watch is SIWA Therapeutics, which is working on an immunotherapy approach to senescent cells.
Please note: This is not a recommendation for either of these companies. Senolytic therapies are an area of interest. And I’ll certainly be keeping an eye on these two biotechs. But I would want to see more conclusive studies before I ever make a recommendation in this area.
Thanks for your question, Brigham. Hopefully, with rapid advancements in senolytics, we can all live long and prosper.
Regards,
Jeff Brown
Editor, The Bleeding Edge
P.S. We’ll keep an eye on senolytic therapies. But in the meantime, there is another biotech story that needs to be on our radars…
We won’t see this covered by the likes of CNBC or Bloomberg. And it has nothing to do with COVID-19.
But based on my analysis, I believe a small biotechnology company is on the verge of releasing clinical trial data that could unlock some of the fastest gains in stock market history.
That’s why I’m hosting my first-ever biotechnology master class taking place next Wednesday at 8 p.m. ET.
During the event, I’ll take you to the biotech capital of the world and show you what’s in store for this sector. I’ll also release the details of my No. 1 biotech stock to own today. Based on my analysis, this stock could 10x in the coming weeks after it releases news of a breakthrough in the industry.
This event is completely free to readers of The Bleeding Edge. Reserve your spot here.
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
