DHS Has Plans for AI

1Don’t Worry, the Experts Have It All Figured Out (AI)

John Robb, author of the book Brave New War, is absolutely right when he asks, “Why doesn’t this instill any confidence?”

This is the Department of Homeland Security announcing last Friday the launch of an “Artificial Intelligence Safety and Security Board.”

The board will meet for the first time in May. Here’s a screenshot pulled straight from the press release identifying its 22 members in alphabetical order…

AI Board

Per a statement from DHS, “the Board will develop recommendations to help critical infrastructure stakeholders, such as transportation service providers, pipeline and power grid operators and internet service providers, more responsibly leverage AI technologies. [Emphasis ours]

“It will also develop recommendations to prevent and prepare for AI-related disruptions to critical services that impact national or economic security, public health or safety.”

I dunno, maybe it’s just me… but if that’s the point of the exercise, you’d think they’d include the CEO of a trucking line or a railroad, right? And the CEO of a power utility, and a pipeline company? And maybe someone from Comcast or Charter?

But no. The only CEOs outside the tech sector hail from an airline, an oil company and (of course) the military-industrial complex.

But there is someone from the Brookings Institution whose personal website says she “researches public policy designed to enable equitable access to technology across the U.S. and to harness its power to create change in communities across the world.”

So if this board fails at its assigned task and, say, a rogue AI takes down the power grid… at least you can freeze in the dark knowing the failure is “equitable.” Yay?

And when it comes to tech executives, the leaders of Meta (Facebook) and X (formerly Twitter) were pointedly excluded, despite their companies’ extensive AI operations.

Of course, Elon Musk has been persona non grata with the power elite for several years now. And perhaps Mark Zuckerberg offended his fellow elites last year when he said that during COVID time, “the establishment… asked for a bunch of things to be censored that, in retrospect, ended up being more debatable or true.”

So no, the “Artificial Intelligence Safety and Security Board” does not instill confidence.

But don’t get us wrong: That’s a knock on the government, not on AI.

In fact, Paradigm tech-and-biotech specialist Ray Blanco has unearthed what might be the smallest AI company we’ve ever recommended. He says it’s about to announce the biggest AI news in history… and the profit potential is greater than that of Nvidia.

Considering Ray first recommended Nvidia to his readers in 2011 when it traded for a mere $3… we urge you to click here and give Ray’s words careful consideration.

2More Reminders Inflation Is Not “Under Control”

Here comes another wave of inflation trepidation to drag down the stock market. Most of yesterday’s gains have vaporized.

The trouble started when McDonald’s reported its first-quarter numbers. It whiffed on both earnings and on same-store sales. “Higher prices have scared away some low-income customers,” says CNBC.

Then came the release of the Labor Department’s quarterly employment cost index — which rang in hotter than expected. That does nothing to assuage fears of a dreaded “wage-price spiral” of the kind that made inflation so persistent in the late 1970s.

The backdrop for this inflation trepidation is the Federal Reserve’s Open Market Committee — which begins two days of meetings today.

At the conclusion of the meeting tomorrow, the FOMC will keep the fed funds rate steady at 5.5%. No uncertainty there. The uncertainty surrounds whatever Fed chair Jerome Powell will say about the path forward in light of the fact that even going by the official numbers, inflation is not bottoming. In fact, it’s higher now than it was nine months earlier…

Sticky Inflation

Not helping matters is the rise in oil prices from under $69 a barrel in December to over $82 this morning.

“Oil price increases don’t hit consumer prices all at once,” Jim Rickards tells his Crisis Trader readers.

“It takes time for the higher oil price to trickle through the economy in the form of higher transportation costs, higher prices for gas at the pump and higher prices for everything from food to clothing that depends on energy for its production. The April 2024 oil price spike will keep CPI inflation higher than expected for months to come.”

And that in turn will likely prompt the Fed to keep interest rates “higher for longer.” There may be no rate cuts at all in 2024.

Thus, the major U.S. stock indexes are all in the red by at least three-quarters of a percent, the S&P 500 at 5,079.

Meanwhile, someone or a group of someones appears determined to make sure gold doesn’t notch a monthly close over $2,300 today.

Since April 5, gold has spent every minute of every trading day over $2,300. Until today.

The Midas metal traded at $2,330 or higher for much of Friday and yesterday. Then it started to slide during overnight trading in Hong Kong. The selling accelerated as trading opened in London, then in New York.

At last check, the bid is $2,297. Silver has likewise fallen victim to “Mr. Slammy,” down 69 cents to $26.40.

Crypto is faring little better. Bitcoin is under $61,000 for the first time in 12 days.

3Electric Freight: The Ambition, the Reality

Because it’s not enough to insist on shuttering coal and natural gas power plants (see yesterday’s edition)… the Biden administration is looking to further constrain the power grid by electrifying freight transport.

“The transportation sector generates about 29% of U.S. greenhouse gas emissions,” says a Bloomberg story, “and the shipment of freight — whether on ships, trucks or rail — is responsible for about a third of that.”

Thus, “for the first time, the White House will explicitly establish a national goal for a zero-emissions freight sector. Though it doesn’t come with an express timetable, the ambition is undergirded by other milestones, including a target for 30% of medium- and heavy-duty truck sales to be zero-emission models in 2030.”

There are two underlying assumptions behind this “ambition” — 1) that charging infrastructure will be in place for these trucks and 2) that the grid won’t collapse under the additional demand from electric trucks, electric passenger cars, AI datacenters, etc.

To date, the only major company that’s made electric freight transport work kinda-sorta is Pepsi, which has a fleet of 21 Tesla 18-wheelers at its operations in Sacramento, California.

But most of those are in use only for deliveries within 100 miles. For longer hauls, Tesla has been installing 750-kilowatt “Megachargers” for Pepsi.

“Pepsico noted the difficulty of installing that much charging power at a facility,” says a 2023 Elektrek article, “and said that they will use what they learned from this experience to plan for future depots that will be electrified.”

And 30% of new truck sales are supposed to be electric only six years from now? Good luck with that…

4The Munchies, Quantified

Whether from personal experience or otherwise, you likely know that cannabis consumption fuels hunger — and not for health food, either. Now there are numbers to bear that out.

A market research firm called Numerator conducted a survey this month of “nearly 6,000 present and past self-reported THC & CBD users,” says the press release, “as well as an analysis of the verified buying behaviors for these same individuals.”

Here are the munchies quantified: The survey confirms THC users are more likely to visit a “limited-service restaurant” or use a food delivery app. “They are 61% more likely to have ordered from Doordash, 35% more likely for Uber Eats, 31% for Little Caesars Pizza, 28% for Jersey Mike’s Subs, 22% for Taco Bell, 22% for Jack in the Box, 19% for Pizza Hut, 19% for Dominos, 17% for Wawa and 16% for Popeyes.”

Interesting about Jersey Mike’s: Apparently even stoners don’t want to eat Subway.

One curiosity in the survey: THC users’ beer and hard-liquor purchases are slightly higher than non-users… but 36% of users say they’ve reduced their alcohol consumption since they started using THC.

Discouragingly, “Consumers who say they use THC products are more likely to be Gen Z or millennials, have low to middle income (<$60K) and have health concerns around anxiety and stress.”

Young, broke and stressed — so they resort to self-soothing. Sounds about right. Sign of the times…

5What’s In a Name? (Continued…)

After Friday and Monday, we’ve got a full-on discussion in the mailbag about foreign place names — and beyond.

One reader invoked song lyrics…

Even old New York was once New Amsterdam
Why they changed it I can't say
People just liked it better that way…
Why did Constantinople get the works?
That's nobody's business but the Turks’ 

The song is called “Istanbul (Not Constantinople)” — first recorded in 1953 by The Four Lads and covered in 1990 by They Might Be Giants. Now you know.

“Please allow a small addendum to the current discussion of pronunciation occuring in the 5 Bullets,” writes one of our longtimers.

“A close acquaintance (if there is such a thing) of a previous generation used to insist on pronouncing Linex as ‘Lie-nex’ to make it ‘correct in English.’

“From him I put up with this since he did work for NASA and is one of those guys that used to wire keypunch machines together and do ballistics calculations during WWII. However, in truth English is a bastard language (‘bastard’ as in ‘bastard file’ for those of you who took shop class) that steals from any language it comes across.

“In addition the Brits have been mangling place names for centuries (Bethlehem to ‘Bedlam,’ Cholmondeley to ‘Chumly,’ Worcestershire to ‘Wooster’), so I really don't mind Milano becoming ‘Milan.’

“However I do have one pet peeve on this subject. While learning to sing the Italian ‘pure’ vowels I also learned that in Italian everything is pronounced. Therefore, despite what the teenagers in the sandwith shops say, those pale yellow cheese slices in your sub should be pronounced pro-va-lone-e.”

“I too do not approve of the changes of names,” writes our final correspondent.

“I assume that the use of a local name is someone trying to show off that they know the names the locals use. I think the opposite — that they are not aware that there is an English name.

“I will continue to refer to Peking, Burma, Paris, Rome, Madras, etc. I do not think that countries that do not use our language should dictate how we translate it as with Beijing. There are many places that we have no hope of pronouncing correctly unless proficient in the language — such as Cairo and Qatar.”

Dave’s last word: You just reminded me… Contrary to popular belief, the town at the southern tip of Illinois whose name looks like the capital of Egypt is not pronounced KAY-ro. It’s CARE-o.

Come to think of it, there’s another town in southern Illinois called VY-enna.

And to get this conversation back where it started, a town in western Illinois called MY-lan. So there!

Best regards,

Dave Gonigam

 

 

 

 

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets

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