Why Trust AI?

As far as I’m concerned, the good of AI far outweighs the bad… for now. [The Rude Awakening] June 28, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Why Trust AI? - I missed a mailbag question, which I’ve rectified in this piece. - If AI is so unreliable, why do I use it? - Well, it’s in how I use it… and how you can, too! [Send Me Your Mailing Address!]( [James Altucher]( The biggest gold bull market in history has just begun. That’s why New York Times best-selling author Jim Rickards has arranged to send his must-read book on gold to any U.S. citizen with a valid mailing address today. [Click here now to see how to claim your copy of The New Case For Gold](. [Click Here To Learn More]( [Sean Ring] SEAN RING Dear Reader, Happy Hump Day from a hot, sticky Asti! Jeff C., you sent in a question ages ago. Unfortunately, I pasted it into the wrong folder and lost it until a few days ago. Today, I answer it. It’s a great question, worthy of an entire Rude. In today’s article, you said ChatGPT helped you in your work. After several examples in the news of completely erroneous results from (biased?) AI, why would you trust it? -Jeff C., Decatur, GA Is AI Biased? I’d say ChatGPT is. I wrote a piece on it for the [Morning Reckoning]( in March. Here’s a hilarious example of its bias: [pub] Credit: [Daily Reckoning]( Seriously? But the following example is even more egregious. When AI Entirely Backfired. If you’re wondering where Jeff is getting the “erroneous results” from, here’s perhaps the most famous case. From [The Guardian]( This story begins on 27 August 2019, when Roberto Mata was a passenger on an Avianca flight 670 from El Salvador to New York, and a metal food and drink trolley allegedly injured his knee. As is the American way, Mata duly sued Avianca, and the airline responded by asking that the case be dismissed because “the statute of limitations had expired.” Mata’s lawyers argued on 25 April that the lawsuit should be continued and appended a list of over half a dozen previous court cases that apparently set precedents supporting their argument. Avianca’s lawyers and Judge P Kevin Castel then dutifully embarked on an examination of these “precedents,” only to find that none of the decisions or the legal quotations cited and summarised in the brief existed. Why? Because ChatGPT had made them up. Whereupon, as the New York Times report puts it, “the lawyer who created the brief, Steven A Schwartz of the firm Levidow, Levidow & Oberman, threw himself on the mercy of the court… saying in an affidavit that he had used the artificial intelligence program to do his legal research – ‘a source that has revealed itself to be unreliable’.” This Schwartz, by the way, was no rookie straight out of law school. He has practiced law in the snakepit that is New York for three decades. But he had, apparently, never used ChatGPT before, and, “therefore, was unaware of the possibility that its content could be false.” He had even asked the program to verify that the cases were real, and it had said “yes.” Aw, shucks. Incredible. And 100% true. You may think I’m crazy for using it by now! But before we proceed, let’s ensure we understand what we’re discussing. [[CHART] Could Inflation Hit 20%+ In 2023?]( Take a close look at this scary chart pictured here… What you see is the money supply in America… And as you can see, the number of dollars in circulation has exploded in the last few years. In fact, more than 80% of all dollars to ever exist have been printed since just 2020 alone! Which is why some say inflation could soon explode even higher than it is now, to 20% or more. And if you’re at or near retirement age you must take action now to protect yourself… otherwise you risk losing everything. [Simply click here now to see how to survive America’s deadly inflation crisis](. [Click Here To Learn More]( Defining the Terms. What is “generative artificial intelligence?” Generative artificial intelligence is a class of AI models that generate new content from scratch. This content comes in many forms, including text, images, music, and other creative outputs. The basis of these models is to learn patterns in data and use those patterns to produce new, unique data similar to the training data. For example, a generative AI trained in paintings could create a new picture that, while unique, embodies the styles and techniques learned from the training data. One type of generative AI is Generative Adversarial Networks (GANs), which consist of two neural networks (a generator and a discriminator) contesting with each other in a game-theoretic framework. Another is an autoregressive model like the GPT series, which generates outputs of one part (one word at a time for text) based on what it has already generated. (This is the one that got that lawyer in trouble.) Do I Trust It? In a word, “No.” Then why do I use it? Because it creates a taxonomy I can follow to give a fairly complete treatment of a subject in a short amount of words (like a Rude piece). I do this to ensure I don’t miss any significant part of the subject, though there’s no guarantee I won’t. So How Do I Use It? Though untrustworthy, I still think learning how to use AI properly is a superpower. Let me take you through my mornings to illustrate my point. First, I wake, shower, and walk Micah to school. Fairly standard. After I drop Micah off, I walk around the block to my buddy Fabrizio’s Civico Cinque café. They serve the best coffee in all of Asti. [SJN] Vittorino, Sara, and Fabrizio Source: Civico 5, via [Facebook]( I’ll sit there for about an hour, researching for the day’s Rude. I read The Journal, Zero Hedge, the Rude Mailbag, and my Twitter feed and hope to get an idea quickly. If it’s a bigger idea than usual, I’ve got to make sure I cover at least most of the bases. That’s where ChatGPT comes in. I haven’t written about money laundering yet, so let’s use that as an example. I asked Chat GPT, “How would you structure a 1,250-word article on money laundering?” This is what it returned: Title: Unveiling the Veil: Understanding the Complexities of Money Laundering Introduction (approx. 150 words) I.. Understanding Money Laundering (approx. 250 words) II. The Stages of Money Laundering (approx. 350 words) III. Methods and Techniques (approx. 400 words) Combating Money Laundering (approx. 300 words) Conclusion (approx. 100 words) Note: The word counts provided are approximate guidelines, and the actual word count may vary based on the specific content and writing style used. Though I didn’t print it here, it also gave me four to five points under each heading to cover. Of course, I can also ask further questions to define each point. What I don’t ask ChatGPT for are facts. I learned this the hard way with my pieces on [Russia’s Resources](. But luckily, unlike our unfortunate lawyer above, I knew the numbers ChatGPT was spewing out were bullshit. So I had to return to the United States Geological Survey’s numbers to ensure I was printing the correct numbers. It was a great lesson. From ChatGPT, get the map, not the details. Wrap Up You can still use models if you know what’s wrong with them. We know ChatGPT makes up stuff if it doesn’t know the answer. So never approach it blindly. Use it for subjects you already know or, though we didn’t cover it, automation. If you’ve got time and notice you’re doing things you don’t want to do repeatedly, I recommend you watch some great YouTube videos to learn. Here are some I enjoyed and learned from: [How To Use ChatGPT To Learn ANY Skill Quickly (Tutorial)]( [How to learn to code FAST using ChatGPT (it's a game changer seriously)]( [I Asked ChatGPT To Make Me As Much Money As Possible]( Enjoy going down that rabbit hole! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( In Case You Missed It… China in the Driver’s Seat [Sean Ring] SEAN RING Good morning from Il Piemonte! Let me keep this intro short. Whenever Byron King offers a piece to the Rude, I nearly take his arm off. His latest and greatest deals with rare earths, smartphones, electric vehicles, China, and how America is getting back into the innovation race. I thought you should read it because this jibes with all the resources I’ve been writing about. But Byron’s the real expert on this stuff. So without further ado, here’s Byron. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( [Byron King] BYRON KING In Toronto last week, I attended a conference on critical materials, things like rare earths, and other substances essential to make the modern world work. The event was sponsored by the [Critical Minerals Institute]( a go-to site for information about the metals and materials necessary to make the modern world work. The event focused on formerly exotic metals and substances now indispensable to the auto industry, such as highly refined metals and processed materials that go into electric vehicles (EVs). In fact, conference attendees included reps from Ford Motor Company and General Motors. With this new focus on EVs and associated exotic materials, one major issue confronting the auto industry is how much of what they require comes from China. In other words, China is in the proverbial driver’s seat for numerous of the world’s critical materials. In this note, let’s look at how auto companies reinvent cars and how China controls many vital components. Further along, I’ll mention some investment ideas. Before We Look at EVs, Though, What’s in Your Smartphone? First, let’s set the stage by discussing your smartphone to help illustrate the issue. You may recall from chemistry class long ago that there are 92 elements in the periodic table. Now, here’s the question: how many of those elements are in your smartphone, meaning your iPhone, Samsung, or whatever else you carry? Don’t read down just yet to find the answer. Close your eyes and give your best idea. C’mon, no cheating… How many elements out of 92? Think about it. Hmm… You carry around a metal and plastic case with glass in front and a bunch of electronics inside. So there’s iron, aluminum, silicon, carbon, copper… What else? What’s your best guess? Out of 92 elements, your device holds what, maybe 25 or 35? Or how about 45? Okay, try 63, according to a chemistry professor acquaintance at MIT who went to the trouble of figuring it all out. Now, What’s in Your Car? With that smartphone illustration in mind, let’s consider a modern car, especially an EV. How many elements are inside an EV? By comparison, what was in one of Henry Ford’s original Model Ts, a century ago? [SJN] [Ford Model T, Courtesy of Ford Motor Co.]( Sure, the original Ford cars contained iron (as steel), plus copper in the wiring, silicon in the windscreen, carbon in the paint, tires, lubricants, etc. And add various alloying metals, like nickel in the steel, or zinc and tin in components like brass or bronze. And lead in the lead-acid battery. You get the idea, right? Old cars were a basic assemblage of commonly used metals and materials. There was nothing too fancy, and indeed most of the metals would have been familiar to people in ancient Rome. Now, fast-forward to a modern EV, and inside, you’ll find substances of which Henry Ford never dreamed. There’s lithium, of course, in the lithium batteries. And that’s not the whole story because a lithium battery contains graphite (a form of carbon), plus nickel, cobalt, molybdenum, lanthanum (in some versions), and numerous other elements. Lots of copper, too. Indeed, even a relatively simple lithium battery is a complex assemblage of materials. [SJN] [Courtesy: Battery Power Tips]( And what about electric traction motors? Well, EV motors require a host of rare earths, especially neodymium and praseodymium, in the strong permanent magnets. And copper. [pub] [From eMobility Engineering]( Traction motors get complex in a hurry because metal alloys inside must be designed to provide high strength and magnetic performance for the lowest weight. Just remember that these magnet motors represent stunning levels of metallurgical engineering. Then we get into all manner of electronics inside an EV. These require a host of exotic elements that range from yttrium and germanium in the processing chips to tin, indium, and gallium in electronic-grade solder that holds everything together. Or how about something as basic as car lighting, from head and tail lights to interior and dashboard illumination? Immediately, this gets us into novel, light-emitting diode (LED) tech, and involves other elements with phosphorescent properties, including arsenic, gallium, indium, cerium, europium, gadolinium, lanthanum, terbium, and yttrium. Here’s an illustration highlighting some of the basics of current lighting technology. Yes, just the basics. Seriously. [SJN] [Courtesy of Zeiss]( Okay, by now, you get the idea. A modern EV is filled with cutting-edge materials and super-complicated systems. It’s “not your father’s Oldsmobile,” to borrow a marketing phrase from GM. And it’s a long way from the days of Henry Ford. And if your iPhone or Samsung has 63 elements in it, it’s fair to say that a modern EV is also right up there; likely even more when it’s all said and done. [WATCH: America’s #1 Income Investor]( Let me introduce you to one of my close financial contacts... He might be the most successful investor in America right now. In fact, [his unique income philosophy has allowed him to generate years’ worth of returns – in as little as 2 days](. I have never seen anything quite like it. That’s why I’m urging you to [watch this video]( he made ASAP. He’s agreed to show you how anyone could make rapid ‘income trades’ for themselves. [Watch this video to learn about a trade that could make up to 166% in 10 days](. [Click Here To Learn More]( China Dominates Metals Processing Globally, automakers everywhere have a handle on their basic materials. Whether in the U.S. and Canada, Europe, or Japan, automakers control their destiny regarding steel, aluminum, copper, windscreen glass, tires, and almost all other essential components. But then we get into the critical materials of an EV, especially things like lithium and graphite, and certainly rare earths. For these items right now, the supply chains mostly pass through China. For example, lithium is mined in Australia, Argentina, Africa, and other places. But China has built out its lithium processing industry for over 20 years and today dominates the unavoidable end-stage level of Li-anode production. It’s fair to say that over 90% of current Li-anodes are made in China, no matter who assembles the battery or where. That will change over time, but for now, it’s a China story. Or consider graphite, also essential to lithium-ion batteries. Again, well over two-thirds of global production comes out of China. And again, it’s a long story of China planning ahead, beginning in the 1990s. With a series of Five-Year Plans, China focused industrial development on graphite, anticipating a global shift towards batteries and electrification. And then we get to rare earth elements (REE), in which China again dominates global output. It began in the 1980s, with Chinese efforts to develop resources and capabilities, ranging from mining camps to world-class universities that train tens of thousands of metallurgical engineers annually. China built an entire REE ecosystem, from minerals and mines to end-use magnets. And today, depending on how you calculate things, China controls between 80 and 90% of global REE output and about 95% of REEs critical to EV motors and lighting systems. The long and short is that China has a 30-year head start on the rest of the world in terms of built-out industrial capacity. It’s three decades ahead in everything from mines to mills, processing, refining, smelting, and end-products. Plus, China has entire armies of trained engineers in every field you can name. So, can the West catch up? Or, put another way, will the West — and the auto industry in particular — find a way out of this quandary in supply chains? Well, we’re starting to see the beginning of new thinking, and even more important, we have new investments in people and plants. Who Is Doing What? In Toronto, I saw several companies making great strides in helping the West, and its auto industry, get out from under their dependence on Chinese supply chains. In the original Lifetime Retirement Letter piece, I reveal the exact companies and their strategies. [Sign up here if you’re curious.]( With these companies, the idea is not to try and imitate what happens in China, and certainly not merely copy what happens there. Instead, the idea is to leapfrog over what China has accomplished by using new chemistry and engineering techniques. And this is more than doable; in fact, it’s being done right now, here in the U.S. and Canada, on a small scale. For example, many REE processes in China require large volumes of acids and solvents, and utilize decades-old machinery, processing, and labor components. While here in the U.S., the approaches both use far less of these inputs and more automation. And it’s accurate to say that the U.S.-based facilities meet the highest environmental standards based on a long list of air, water, solid waste, and related regulations. The point is, if we try to imitate China, it’s a never-ending game of catch-up. But if we can out-innovate China, we can move ahead rapidly and make money along the way. There’s much more to say about my visit to Toronto and the conference, but I’ll wrap it up here. I came away from Toronto both sanguine about the challenges, yet also with a hopeful sense. For all the discussion of EVs in our collective future, right now, China controls key parts of the supply chain for an array of metals and substances. Western industry, particularly automakers, are concerned about the China angle and want to gain control over their future supplies and channels of shipment. Here in the West, a growing body of companies is focused on processing critical materials, downstream from mining and milling. And innovative companies are coming up with great, new ideas and technology. Keep in mind that the companies mentioned here are not official recommendations for Lifetime Income Report. If you buy shares, watch the charts and accumulate on opportune days. Never chase momentum, and be prepared to wait, likely into 2024, as the business plans evolve. Along the way, I will keep an eye on the companies and update you as news occurs. Meanwhile, just realize how much and how fast things are changing out in the big world. That’s why I work so hard to find out what’s going on, to keep you up to date. That’s all for now… Thank you for subscribing and reading. Best wishes, [Sean Ring] Byron W. King [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. 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