Breaking Tech News: Apple (AAPL) Fourth Quarter Results

CUPERTINO, Calif. - October 21, 2014 (www.investorideas.com newswire) Apple® (AAPL) announced financial results for its fiscal 2014 fourth quarter ended September 27, 2014. The Company posted quarterly revenue of $42.1 billion and quarterly net profit of $8.5 billion, or $1.42 per diluted share. These results compare to revenue of $37.5 billion and net profit of $7.5 billion, or $1.18 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 37 percent in the year-ago quarter. International sales accounted for 60 percent of the quarter's revenue.

Apple's board of directors has declared a cash dividend of $.47 per share of the Company's common stock. The dividend is payable on November 13, 2014, to shareholders of record as of the close of business on November 10, 2014.

"Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus," said Tim Cook, Apple's CEO. "With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple's strongest product lineup ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015."

"Our strong business performance drove EPS growth of 20 percent and a record $13.3 billion in cash flow from operations in the September quarter," said Luca Maestri, Apple's CFO. "We continued to execute aggressively against our capital return program, spending over $20 billion in the quarter and bringing cumulative returns to $94 billion."

Apple is providing the following guidance for its fiscal 2015 first quarter:

• revenue between $63.5 billion and $66.5 billion
• gross margin between 37.5 percent and 38.5 percent
• operating expenses between $5.4 billion and $5.5 billion
• other income/(expense) of $325 million
• tax rate of 26.5 percent

Apple will provide live streaming of its Q4 2014 financial results conference call beginning at 2:00 p.m. PDT on October 20, 2014 at www.apple.com/quicktime/qtv/earningsq414. This webcast will also be available for replay for approximately two weeks thereafter.

Source:- http://www.investorideas.com/news/2014/technology/10211.asp

PRECIOUS-Gold falls on oil drop; Fed meeting in focus

* U.S. service sector activities up

* Crude oil drops after Goldman cuts forecast

* Expectation that Fed will keep rates low underpins (Updates market activities)

By Frank Tang and Jan Harvey

Gold dropped on Monday as crude oil prices tumbled, but losses were limited by recovering physical demand and expectations the Federal Reserve will wait before hiking interest rates.

The metal came under pressure after U.S. data showed services sector activity dipped to a six-month low in October, and a sharp pullback in crude oil after Goldman Sachs slashed its price forecasts, citing lackluster global demand.

Gold, however, was underpinned as China's net gold imports from Hong Kong jumped to a six-month high in September.

"Evidence of recovering physical demand in Asia in response to the current low price environment gives confidence that the $1,180 support level may hold," said Jonathan Butler, precious metals strategist at Mitsubishi Corp International.

Spot gold was down 0.1 percent at $1,229.23 an ounce by 2:10 p.m. EDT (1810 GMT), having moved in a narrow range of less than $6. The metal has now dropped in its fourth consecutive session.

U.S. COMEX gold futures for December delivery settled down $2.50 an ounce at $1,229.30. Volume is lighter than usual, preliminary Reuters data showed.

Investors are focusing on the Fed's latest policy statement later this week, in which the U.S. central bank will likely reinforce its stated willingness to wait for a long while before hiking interest rates, after a volatile month in financial markets.

Any sign the Fed will raise interest rates later than currently expected could benefit gold, as it will keep the opportunity cost of holding non-yielding bullion low for longer.

Gold's outlook will depend largely on the two-day Fed meeting to be concluded on Wednesday, when the U.S. central bank is also widely expected to end its bond-buying stimulus program that first began in late 2008 known as quantitative easing (QE).

"Although this is clearly a bearish development for gold as it implies the beginning of monetary policy normalization, it may have already been priced in," said Butler.

Bullion traders were also closely watching investors' positions in gold funds. The world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, said its holdings fell 4.5 tonnes to 745.39 tonnes on Friday, a six-year low.

That brought the fund's total outflows last week to 15.5 tonnes, the most of any week since July of last year.

Among other precious metals, silver edged up 0.1 percent to $17.14 an ounce. Platinum rose 0.8 percent to $1,250.50 an ounce and palladium was up 0.8 percent at $782 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by Chris Reese and Bernadette Baum)

Source:-  http://www.reuters.com/article/2014/10/27/markets-precious-idUSL4N0SM38820141027

Out of juice? New battery technology could help smartphones last twice as long

SolidEnergy's Solid Polymer Ionic Liquid (SPIL) lithium battery placed between Chinese smartphone maker Xiaomi and Apple's iPhone batteries. Photo: SolidEnergy

Smartphones that last twice as long before they need to be recharged could soon become reality after a US tech start-up revealed a portable battery with more than double the capacity of those currently on the market.

Run by Chinese-American Qichao Hu, US firm SolidEnergy’s Solid Polymer Ionic Liquid (SPIL) lithium battery’s prototype cells (2Ah) demonstrated a world record 1,337 Wh/L energy density in tests, according to A123 Systems, a battery manufacturing company that also provides test and validation services.

SolidEnergy said the energy capacity per volume is more than twice that of conventional lithium-ion batteries currently used in most portable electronic devices, such as smartphones. Most smartphone batteries on the market have an energy density of less than 600 Wh/L.

Batteries made with SolidEnergy’s technology could therefore potentially last twice as long as batteries of the same size, or take up only half the capacity of current ones.

“We are hoping to disrupt more than 20 years of domination of the consumer electronics and electronic vehicle industries by traditional li-ion batteries,” Hu, CEO and founder of SolidEnergy, told the South China Morning Post. “We are confident our products could lead the next battery revolution that opens a new era in the next 20 years.”

Hu, named by Forbes as one of the 30 most important innovators in the energy industry aged 30 or under, said the technology can be applied to batteries used in smartphones and smart watches in the near future, and electric cars in the long run. His company aims to commercialise the technology by selling it to battery manufacturers who supply major electronic device makers around the world.

Qichao Hu, CEO and founder of SolidEnergy, developed the next generation battery during his post-graduate studies at MIT.

“Theoretically, lithium metal batteries are capable of generating such a high energy density,” said Wang Jiulin, a deputy professor from the school of chemistry and chemical engineering at Shanghai Jiao Tong University.

“The technology, if proved to be successful in adapting to application, will be a great breakthrough from the conventional lithium-ion batteries, whose bottleneck is the degradation of life.

“But the technology still needs to withstand the test of time and its product.”

Hu developed the polymer ionic liquid (PIL) lithium metal battery when he was working in the lab of renowned material chemistry professor Donald Sadoway during his post-graduate studies at the Massachusetts Institute of Technology.

He founded SolidEnergy in 2012, shortly after graduation. The company currently has 12 members of staff, including Hu, all researchers.

SolidEnergy has already raised more than US$4.5 million from its first round of venture funding, according to Hu. Its investors include Singapore-based Vertex and Qianyang Investment from Shanghai.

Hu said SolidEnergy plans to start manufacturing the raw materials using the new technology once it concludes the current research phrase. He estimated the company will be capable of producing enough raw materials to produce 10 million standard-sized portable batteries for mobile phones or smart watches by early 2016.

Gold standard insures the dollar has more buying power: Opinion

Gov. Jim Florio’s “A Proposed Return to the Gold Standard is Cause for Concern” contains a certain irony: Mr. Florio's embrace of the most important decision made about our money in our lifetime made by President Richard Nixon, who left office under a severe cloud.

The facts are clear. During the 40 years prior to Nixon ending the gold standard the nation’s economy grew, on average, 4.5 percent per year. Since the Aug. 15, 1971 “Nixon Shock,” our average GDP growth has dropped by more than 25 percent annually. Had we maintained gold standard growth rates, this country’s economy -- and on average each of your paychecks and net worth -- would be 50 percent bigger today.

Mr. Florio refers to the ensuing "easy money" policies of the Federal Reserve as “stimulating” the economy. He omits that this has led to 1 percent of the population benefiting from 95 percent of the stock market wealth produced by “Quantitative Easing.” Meanwhile, middle-income families have seen their buying power drop 8 percent since 2007, caught in the grip of wage stagnation and a rising cost of living. The rich are getting richer and the middle class is getting poorer.

According to the U.S. Bureau of Labor Statistics, between 1946 (year of the creation of Bretton Woods gold-exchange standard) and 1971 (the year Nixon "temporarily" closed the gold window), average annual inflation was just under 3 percent. From 1971 to present, the annual inflation ballooned by around 50 percent.

Mr. Florio claims: “The flexibility needed for governmental financing is diminished through the imposition of the Gold Standard.”

Simply not true.

It's time for a real discussion about returning to the tried-and-true gold standard that underpinned the nation's economic growth for 180 years.

The gold standard insures the quality, i.e. buying power, of the dollar. It doesn’t limit the quantity of money. As economist Nathan Lewis has calculated, from 1775 to 1900 the money supply increased by 163 times while gold reserves rose only 3.4 times. The gold standard defines, rather than restricts, money.

Mr. Florio continues, “The supply of gold available today would never be able to sustain a U.S. economy now over $3 trillion. To peg the dollar to gold now would trigger massive deflation, constrict the money supply and cause a deep recession.” Yikes, Jim, US GDP now is, according to the World Bank, around $16 trillion, not (except as a pure technicality) "over $3 trillion."

Regarding Gov. Florio's stated fear of deflation and depression, the consensus transition plan, based on the work of Reagan Gold Commissioner Lewis E. Lehrman and others, provides for a market discovery period for calculating the ratio of gold to dollars. Thereby there is no possibility of restoring the gold standard to triggering a massive deflation, constricting the money supply, or causing a deep recession.

Mr. Florio raises the specter of environmental impact, which is nothing more than a red herring. Every gold standard proponent I know is in favor of strong environmental standards to prohibit toxic pollution. There is a technological breakthrough for the use of nontoxic corn starch to resolve any toxicity concern going forward, now being developed by the gold mining industry.

The key benefit in re-establishing the gold standard is “equitable prosperity.” In a speech last week, Fed Chairman Janet Yellen pointed to the widening income gap. Stating that inequality that has developed since the end of the Bretton Woods gold-exchange standard, is the worst in the last hundred years, Madam Yellen, perhaps inadvertently, makes a compelling case for a return to the gold standard. The Feds' continued printing of paper money out of thin air correlates with the growth of the "income gap." Only a return to a dollar as good as gold can return America to a nation where, as President Kennedy said, “A rising tide lifts all boats.”

It’s time for a real discussion about returning to the tried-and-true gold standard that underpinned the nation’s economic growth for 180 years. Likening the gold standard to zombies and vampires, and calling for driving a stake through its heart, is an amusing Halloween season trope. Driving that stake would be straight through the heart of the equitable prosperity and economic security of American workers and median-income families.


Source: http://www.nj.com/opinion/index.ssf/2014/10/lonegan_response_to_florio_gold_standard_oped_hed_goes_here.html

Google Ventures Unleashes Its Investment Strategy For Europe

To start off our annual European conference, we brought the new Google VenturesEurope partners onstage at Disrupt Europe in London. The panel was mostly focused on explaining Google Ventures’ investment strategy for its European arm. In particular, Google Ventures will employ the same operational strategy as in the U.S., and will be looking for co-investors for most of its deals.

“In the U.S., over the last four or five years, over a hundred startups have received time from the Google Ventures design team,” Peter Read said. This was just an example on the design front, but Google Ventures have many different teams in the U.S.

While Google Ventures Europe won’t have the same resources as its Californian counterpart, partners agreed that it was Google Ventures’ key comparative advantage compared to existing European VCs. “What differentiates us is our operational services and the Google resources,” Avid Larizadeh said.

As a reminder, Google Ventures Europe has an initial fund of $100 million to invest in the best European startups. There is no particular focus on consumer or enterprise stuff. It’s all about backing the best teams directly from London and bringing the Google Ventures way of doing things in Europe. But $100 million seems small compared to Google Ventures’ funds in the U.S.

“Look at the history of the U.S. It started out as much smaller funds,” MG Siegler said. “We will be opportunistic. There is a lot of activity in the very early stage side of things, maybe we will do something there, maybe it’s too busy.”

As we already knew, Tom Hulme, Avid Larizadeh, Peter Read, and Eze Vidra were the four general partners operating out of London. Former TechCrunch writer MG Siegler was supposed to join the rest of the team for a short period of time “to serve as a liaison between the U.S. and European operations,” a spokesperson told us at the time. It seems like Siegler’s move might be a little bit longer than expected — he doesn’t have any fixed timeline to come back to the U.S.

“I think it’s sort of an open-ended question, it’s up to me, it’s up to the team here. It depends on what we are doing here,” Siegler said.

While Siegler had been working for Google Ventures in the U.S., the other European general partners have been active on their own in the European tech ecosystem and are bringing this experience to Google Ventures. “None of us would have been here if Google Ventures didn’t think that we bring something special to the table,” Eze Vidra said. “We didn’t want to create a minor league team,” Siegler said.inkedIn

When it comes to geographical focus, the team is based in London but will be looking for startups all over Europe. “We are not focusing in any one country in particular. Innovation is truly global,” Eze Vidra said.

And finally, partners said multiple times that they were looking forward to working with co-investors. “80 percent of the Google Ventures deals in the U.S. are with co-investors, and we want to do the same thing here,” Read said.

In other words, Google Ventures doesn’t want to fight with the existing players of the European tech ecosystem. Instead, it wants to partner with them, add value to both startups and co-investors, and of course generate significant return on investment.

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Source Url : http://techcrunch.com/2014/10/20/google-ventures-unleashes-its-investment-strategy-for-europe/

Five reasons to buy gold now

Wondering if it’s a good idea to invest in gold this festive season? Don’t let the falling prices stop you

 

The last few years have been harrowing for gold investors, with international prices of the metal declining from $1,921 per troy ounce to about $1,240 now. But hold on, don’t write off gold yet. Global supplies of the yellow metal are likely to shrink as new reserves become increasingly difficult to find. And given that the Asian appetite for gold is set to grow, gold demand may only go up. Here are five reasons why you should buy gold now:

Limited reserves

In the years ahead, it is likely to get increasingly difficult for producers to find easy-to-mine deposits of gold. At 2,968.5 tonnes (Thomson Reuters GFMS data), many investors believe that 2013 may be the peak year for gold production.

Natural Resource Holdings, a firm which develops natural resource assets, says that in terms of reserves and resources, only 3.72 billion ounces of gold is available to producers. Of this, about 1.82 billion ounces (or 56,674 tonnes) may be recoverable. So even if only 1,100-1,200 tonnes of gold is mined every year, the identified resources will be exhausted in 50 years’ time. However, even if miners only prospect where reserves have been identified, they may not continue to get as much gold for every tonne of ore. The undeveloped mines are also said to have lower grade gold ore (0.89g/tonne) than the current producing mines (1.18 g/tonne).

In the last decade, gold mine production has increased at an annualised rate of only 2 per cent. There have been no new discoveries of gold deposits in the last four years thereafter; there were six in 2010 and one in 2011. Also, as miners dig deeper, they end up with only lower grade ore. The average grade of ore at producing mines has dropped from 5 g/tonne in the 1990s to about 1.8 g/tonne now, according to data from InteirraRMG, a company that provides global mining information.

Unviable

If gold prices decline any further, it will make production unviable. The average cost of producing an ounce of gold is said to be about $1,100. But some manage it at about $950-$1,000/ounce due to favourable geographical conditions at the pit and with the use of better technology and less labour. Now, with the current market price of gold at about $1,200/ounce, many miners, especially the junior and mid-tier ones, have shelved their plans to explore new deposits. This can reduce supply in the future. Experts say miners could have hedged their positions by selling gold futures when gold was selling above $1,500/ounce in 2011, but not many did. The few who did hedge sold only 30-40 per cent of their production.  

Rising demand

 Even today, more than 50 per cent of gold is consumed for jewellery. In the last decade, an average of about 2,000 tonnes of gold has been consumed every year as jewellery. In India and China, where gold is an essential part of festivals and weddings, people love to adorn themselves in gold and save it for their children. Their appetite for gold may only grow as their disposable incomes go up in future. Gold consumption demand hit an all-time high of 2,209.5 tonnes in 2013, with India and China alone consuming more than 1,200 tonnes as jewellery.

However, it is investment demand that is driving the demand for gold. Demand for gold bars and coins has risen from about 350 tonnes in 2004 to 1,654 tonnes last year.

This sharp increase follows opening up of the private gold investment market in China. As the People’s Bank of China lifted curbs on gold investment in 2004 and banks began to sell gold bars and market gold accumulation plans, the demand for gold bullion in the country increased phenomenally, with household savings getting channelled into gold. In 2013, the country consumed about 397 tonnes of gold (of the total consumption of 1,065.7 tonnes) in the form of bars and coins.

What’s interesting is that China’s central bank has also been silently amassing gold.

Since a large portion of China’s reserves are parked in US treasury securities, the country has reportedly bought gold in the last few years to de-risk its portfolio. Of China’s forex reserves of $3.82 trillion toward end-2013, $1.3 trillion was in US securities. If China’s central bank continues to diversify its reserves, it will provide ample support to gold prices.

Other central banks too are following a similar strategy to reduce the proportion of their forex reserves in dollar and euro-denominated securities and are turning to gold. Central banks that were net sellers of gold in the market till 2009, have been net buyers in the market from 2010.

Numbers compiled by WGC show that in 2013, the central banks bought 369 tonnes of gold as the metal slid to its multi-year lows in the year — even as investors (or is it speculators?) dumped gold in the West.  Central banks of Russia, Kazakhstan, Azerbaijan and Korea have been among the major buyers.

Traders can reverse positions

 It is no secret that the drop in gold prices was driven by speculators and their naked shorts. The short positions in Comex gold futures this year crossed 100,000 on September 23 and by October 7 increased to 107,628, according to CFTC (Commodity Futures Trading Commission) data. This is sharply higher over the previous eight-week average of 63,700. The last time short positions were more than 100,000 was in December 2013. Prices hit a low $1,182 then. But speculators, as we know, take short-term bets. When sentiments change, they immediately jump to the opposite camp. With the Federal Reserve turning more dovish recently — voicing concerns about global economic growth and the strengthening dollar — the pessimism on gold should wane. With prices having bounced from $1,183, the previous low being $1,182 in December 2013, it is already proof that fundamentals are supporting prices.

 Retail investors, in fact, have started to buy. In September, the US mint’s gold coin sales rose to 58,000 ounces from 25,000 ounces in August.

Gold exchange-traded funds such as the US SPDR Gold Trust, however, continue to see outflows. In SPDR Gold Trust too, it is only the big fish that are playing and not retail people. Physical redemption is allowed only in bunches of 100,000 shares (or 10,000 ounces of gold). So, it is not common people, but large investors with speculative interest who trade in this ETF.

ETFs at NAV price

 Gold ETFs in India, which were trading at a premium of 7-8 per cent to NAV last December due to supply shortages, have seen the premium fizz evaporate. This is thanks to the Government allowing more agencies to import gold, resulting in improved supply. Goldman Sachs' gold ETF — GoldBeES — the largest gold-backed exchange-traded fund in India, trades at ₹2,539 now and the NAV is ₹2,530.

One factor that may perhaps impact gold prices negatively is the strength in the dollar. But it is not necessary for gold to always correct when the dollar strengthens.

An analysis of the movement of gold prices and the US dollar index over the last 30 years shows that dollar and gold prices have moved in the same direction in many years. In 2005, the US dollar index moved from 83.5 to 91.17 while gold moved from $423 to $517. This was similar to the behaviour witnessed in 1982 (108-125 vs. $387 to $423) and in the second half of 1980.

If you are not a short-term trader, you have nothing to worry now; you can just go ahead and buy gold. Prices can’t stay close to or below the cost of production for a long time.

You can consider parking 10-15 per cent of your portfolio in gold as a diversifier. In fact, it could be the right time for investors to start an SIP in gold ETFs. With the rupee likely to stay flat or weaken a bit more, investors may get to make some currency-related gains too.

Source url : http://www.thehindubusinessline.com/features/investment-world/five-reasons-to-buy-gold-now/article6516884.ece

Meet ’5G,’ the next-gen technology that will bring you mobile data on steroids

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Many wireless carriers are still rolling out their 4G LTE networks. But federal regulators are already turning their eye toward next-gen technologies that will allow incredibly fast mobile data. We're talking rates that are 1,000 times faster than what the average American gets at home today from a fixed broadband connection.

Welcome to the era of 5G.

At some point, most wireless technologies are thwarted by obstacles or distance. That's because wireless spectrum -- the airwaves that carry mobile voice and data -- are subject to the same laws of physics that govern everything else. But the Federal Communications Commission thinks there might be promise in a high-energy spectrum that the industry has taken to calling "millimeter waves," due to their high frequency. And on Friday, the FCC said it would begin asking the public just what it can do to promote this technology.

We already know of a few possibilities. Wireless transmissions today generally require a line-of-sight connection between the source and the receiver. But with advanced spectrum in the 24 gigahertz range — far higher than where most wireless devices operate (in the sub-3 GHz range) — engineers believe they can "ricochet" signals around obstacles.

"Our next-generation networks are going to have to do some heavy lifting," said FCC Commissioner Jessica Rosenworcel. "So how do we meet those demands? We look up. Way, way up. To infinity and beyond."

Future mobile technologies could exceed the 24 GHz threshold and take advantage of even higher-intensity airwaves in the 60 GHz or even 90 GHz bands. These moves could allow for mobile broadband ranging from 1 gigabit per second (which is equivalent to the best that today's fiber-optic networks have to offer) to a mind-boggling 10 gigabits per second, according to FCC Commissioner Ajit Pai.

It won't be long before Americans start connecting more than just smartphones and tablets to the Internet. Soon they'll be linking appliances, cars, drones and all manner of other mobile devices, meaning that consumer and business demand for these airwaves is going to spike.

And that means telecom companies will need more freedom to deploy cell sites, particularly towers that can create smaller cells to help manage congestion. Separately Friday, the FCC approved measures that would make it easier for wireless companies to build these towers.

While there's no universally agreed-upon definition for 5G, FCC Chairman Tom Wheeler said it was imperative to begin deciding now which spectrum bands can be used and how they'll be licensed to wireless companies.

"I don't care what they call it — millimeter wave, 5G, kumquats — I don't care," Wheeler said. "What we do when we open the [notice of inquiry] is to help us answer those kinds of questions."

Source Url:http://www.washingtonpost.com/blogs/the-switch/wp/2014/10/17/meet-5g-the-next-gen-technology-that-will-bring-you-mobile-data-on-steroids/

Gold: A 3-Point Investment Strategy

After falling from highs near $2,000 just a few years ago, Gold has been languishing around the $1,200-mark for over a year, besides a few run-ups at $1,300 and $1,400.

Yet the monetary conditions — inflation, printing and stimulus — that spurred gold’s historic climb are still with us. What gives? It’s like gold has caught a bug and just can’t get well.

It’s not a mystery what ails it, however. Let’s look at three reasons why gold is trading in the $1,200 range, and how these are the clue to our gold investment strategy.

The first is the value of the dollar.

Just as gold protects wealth when times are tough, the dollar fuels growth in periods of stability. The momentum of each medium tend to be counteracting, since investors have to choose between one or the other. It’s no surprise that during gold’s drop from $1,875 to $1,210, the dollar index climbed 70% during the same time.

In short, investors will go where their bread is buttered, and while interest rates are low and fiscal stimulus is pumping throughout the economy, it’s dollar-driven equities. Why hunker down wealth in gold holdings when stocks are soaring high?

Even if surging share prices could be grossly inflated. Herein lies edge of the precipice of the next gold price breakout. Are these dollar-driven equities performing as well as their stock prices show? Or are they inflated by a dollar that is merely faring the best in the race to the bottom between global currencies?

My colleague, and fellow resource guru, Matt Insley recently summed up what has influenced the dollar index’s steep climb: “The U.S. dollar index is heavily influenced by the euro — at over 57% weighting of the currency basket used to calculate the dollar index. The index itself hinges on the fate of the euro and the euro is in trouble.” Forget China! The dollar’s biggest influence (and conversely, gold’s) is the European Union’s economy and monetary policy.

The second factor that determines the gold price is physical gold demand. As we just showed, demand for gold is inversely correlated to dollar demand, which is driven by both U.S. and foreign monetary policies. But who’s buying the gold? India, for one, but more importantly, China, the world’s largest holder of U.S. government debt.

With more than $1.317 trillion in their reserves, it’s safe to say the Chinese have a vested interest in a strong dollar, but China’s gold buying habits reveal a bearish sentiment toward the dollar.

As I’ve detailed before, the sleeping dragon has recently amassed as much as 7,000 tons of gold, and China is not the only country in the East staking their faith in gold. During a period of declining gold prices, India officially imported $2.04 billion worth in August 2014, nearly three times more than the $739 million imported in August 2013.

Remember gold is not consumed in the same sense as oil, gas, or corn. Once the precious metal has been extracted from the mine and sent into the open market it will always be there. Only a very small portion of the gold that has been mined vanishes in shipwrecks or natural disasters. The rest is still floating around, causing demand to be more of a determinant of the price of gold than supply.

The third element that drives the price of gold is fear. Real or imagined, fear influences the decision making of most investors. Gold is particularly sensitive to political and financial fear.

The markets are at heightened risk now that ISIS controls 60% of Syria’s oil production and threatens Iraq’s. And let’s not forget the actions of our good friend Putin. With the annexation of Crimea and parts of Eastern Ukraine, whatever trust the west once had in Russia is gone, and it’s added lots of risk to Europe’s energy supply chain.

Finally, fear that the market can’t keep rising, even though the Fed keeps signaling that interest rates will remain low in the short-term, is driving some investors from stocks to gold. They may be premature, but all this fear is baked into the price of gold like a leaven. All in all, I’m still not committed to the bearish outlook on gold.

Source Url : http://www.investing.com/analysis/gold:-a-3-point-investment-strategy-228886

How Technology Is Creating New Sources Of Power

Power has always been easier to recognize than to define.  To many, it is simply the ability to get what you want, either through coercion or persuasion.   Although that may be accurate, it isn’t very helpful, so strategists have long sought to come up with more operative definitions.

In geopolitics, Ray S. Cline defined power as resources, such as population, territory and economic assets, multiplied by strategy and will.  In business, Michael Porter described advantage as domination of the value chain in order to project power throughout an industry.

However you define it, power is important because it allows you to get things done.  Whether you are a politician or an executive, you must seek power to achieve objectives.  Yet power never stays constant, but has always been highly dependent on context and, in today’s world of rapidly shifting contexts, emerging sources of power are often the most potent.

The Power of Information

In his book, War Made New, Max Boot argues that technology shifts often bring down great powers.  The Mongols missed the shift to gunpowder.  The first industrial revolution overtook the Chinese, Turks and Indians, while the French and British failed to keep pace with the second one.  The rise of information technology signaled the end of Soviet dominance.

Today, information itself and the capability to process it has become a new source of power.  As Claude Shannon, the father of information theory, made clear, information is the absence of ambiguity and therefore has always had important strategic significance.  Yet never before has there been the potential to use information as a weapon.

That’s why big data matters.  Companies like Google and Facebook have hundreds of thousands of servers crunching exabytes of data.  The NSA has doubled its budget since 2001.  All of this investment has a purpose, to turn information itself into a hard asset, capable of multiplying the impact of other capabilities.

In the past, the phrase “information is power” was used as a metaphor.  It meant that intelligence could create leverage.  Yet today, it has taken on a much more literal meaning.  Information, in vast quantities, can be a weapon or a shield.

The Increasing Significance Of Soft Power

Another consequence of modern technology is that the planet has become far more connected.  Today, we not only travel to distant lands, but communicate across the world effortlessly and at nearly zero cost.  News outlets like CNN, BBC and Al Jazeera as well as social media like Facebook and Twitter have created a global marketplace for ideas.

Globalization and the information age have elevated the importance of soft power, which Joseph Nye has defined as the ability to get what you want without force or coercion.  As contact between cultures increases, there is more to both attract and repel and, as the speed of communication increases, so can shifts in soft power.

We saw soft power at work in the recent events in Ukraine.  While it was a trade deal that sparked the crisis, what drove the protests was the attraction of European society.  Ukrainians wanted to be a “normal” country with an active civil society and the rule of law.  The Maidan, Kiev’s central square, became Euromaidan and the protesters risked their lives to defend it.

The Russian backed insurgency that followed was designed to spread across Eastern Ukraine, but was limited to the relatively small region of Donbass, because few Ukrainians found Russian society attractive.  Russia’s subsequent use of hard power to achieve its objectives, diminished its soft power further.

The jury is still out how events will unfold, but what’s already clear is that Russia’s overwhelming advantage in hard power has been severely limited by its enormous deficit of soft power.  Further, the economic sanctions levelled against it will diminish its capacity to generate and project hard power for years to come.

With the rise of social media, soft power has also taken on a new significance in the corporate world.  Scandals such as Dell Hell and Apple’s Foxconn issues created a fury and forced major corporations to change their policies.   Even innovative young startups like Uber are finding that public sentiment can trump innovation and operational efficiency.

The Power Of Demographics

New demographic trends due to advances in healthcare and birth control technologies have also created shifts. In developed countries, increases in life expectancy, combined with lower birth rates, are creating huge shifts in worker to retiree ratios.  At the same time, a RAND study finds that demographic trends created by high fertility in less developed nations contribute to extremism.

Again, the Ukrainian crisis is instructive.  In the Orange Revolution protests ten years ago, Eastern Ukraine was united behind Viktor Yanukovych, who was then a Russian backed candidate for President.  Now however, there is a decided split between the older generation that yearns for its lost Soviet power and the younger generation with no memory of it.

Enterprises also have to wrestle with demographics.  Legacy firms with heritage brands need to keep their existing customers happy, but catering to a built-in client base can also leave a business vulnerable to disruptive innovation. Startup firms can exploit the less established tastes of younger consumers and ride the market up as it inevitably grows.

When Facebook started, it was only available to those with college e-mails.  As the service spread, it opened up to more campuses, then to high schools and then to everybody.  The strategy was a roaring success, but the company soon found that as its user base aged, it lost credibility with younger demographics.

Facebook clearly recognized the problem and acquisitions like Instagram and WhatsApp have helped shore up its appeal and protect its business from demographic erosion.

Power Is Easier To Get, But Harder To Use Or Keep

One thing that’s clear is that power isn’t what it used to be.  The Roman Empire lasted over a thousand years. Others lasted centuries.  The US has been a superpower for roughly seventy years and its power is already being challenged by a rising China and a multipolar world. The Soviet empire, of course, is already becoming a distant memory.

As Moisés Naím put it in his book, The End of Power, “Power is easier to get, but harder to use or keep.”  Technology, while not the sole cause, has clearly played a significant role, because the information economy makes it possible to achieve scale without mass.  Ownership of resources is not as important as access to them.

Therefore, any advantage gained through the acquisition of assets and capabilities is bound to be fleeting.  The power to attract has become more important than the power to compel or coerce.  Today, strategy has less to do with increasing efficiencies and acquiring resources and more to do with widening and deepening networks of connections.

We have to come to terms with the fact that the will to power no longer implies climbing to the top of the heap, but edging towards the center of the circle. That’s made power far less stable, but no less desirable.

Source Url: http://www.forbes.com/sites/gregsatell/2014/10/19/how-technology-is-creating-new-sources-of-power/