We were also able to talk to executives, scientists and engineers at many cutting-edge technology company. Without a doubt, the hottest topics and most-dazzling presentations at CES this year involved televisions. When I say television, though, I’m talking about an entirely new iteration of the old technology.

“Smart televisions” are finally becoming truly user-friendly. Moreover, the various online sources of content are being knit together by Google and hardware manufacturers. This convergence of all content on the wirelessly connected family screen presents an enormous challenge to traditional broadcast and cable networks. Games, educational materials, entertainment, telephony and home electronics management are coming together. When you can interact with Khan Academy lectures on virtually any subject, the term “boob tube” hardly applies. Here’s one article about this important trend.

In the past, I’ve never gotten particularly excited by HD television. Yes, new HD large-screen televisions have been improvements, but I’ve never found them particularly compelling. I think that’s about to change.

New screen technologies, OLED and active matrix, have crossed some tipping point. I was astonished by the clarity of next-generation screens. The Korean manufacturers, in particular, can make screens with clarity that is getting very close to actual vision. This is particularly true in regard to 3-D screen technology.

I told my subscribers several years ago that entertainment as we knew it would change when 3-D screens reached an acceptable level. That point will not come at once, because individuals have different preferences, but for many, it has already arrived, even though the highest-quality screens still require glasses. That will change within a few years. 3-D televisions are in the works now that will allow a room full of people to each receive, without glasses, both left and right eye signals — even if they move around.

The big events of the CES were all about 3-D, especially the live broadcasts by the ESPN 3-D channel. Fortunately, I know some of the key people at Cameron Pace Group, the company that owns the state-of-the-art technology used to shoot and broadcast most top-level 3-D. Cameron Pace is run by James Cameron of Avatar fame as well as Vince Pace, the inventor of the technology and a well-known cinematographer. As a result, Ray and I were able to go behind the scenes inside the semitrailers outside the convention hall that powered the 3-D broadcast.

I’m not going to go into a lot of detail about this company right now, but I will in the future. A lot of 3-D photography is happening right now, even though the forum doesn’t yet exist for the programming. When 3-D screens are more widely deployed, you’re going to be surprised to find that many of the most-successful shows on television today will then be released, for a second revenue stream, in 3-D.

Regards,

Patrick Cox
for The Daily Reckoning

Coming Soon: Smart Television! originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

Today, it is more important than ever to keep the long-run perspective firmly in mind…

Lest you’ve forgotten, world financial markets are in a state of unparalleled disorder. More capital has been drained from markets, thanks to the irresponsibility of politicians and the acquiescence of naive citizens, than at any time in modern history. The damage done by bombers and tanks in world wars has been matched by the unintended consequences of central planning and bureaucracies.

Fortunately, however, the political and philosophical trend lines are all pointing to true long-term reform. The pendulum’s swing cannot be stopped, and the coming decades will be unmatched in terms of technological progress and wealth creation.

This is exactly the time to be investing in the future. Metaphorically, and sometimes actually, there is blood in the streets. You’ve probably heard that Baron Rothschild, the famously successful 18th-century British investor, said, “The time to buy is when there’s blood in the streets.” In fact, some believe the original quote was, “Buy when there’s blood in the street, even if the blood is your own.”

Remember, investors who bought and held a diversified portfolio of disruptive technologies before and during the Great Depression got rich. Those who lost confidence because they weren’t seeing the quarterly gains typical in bull markets missed their golden opportunity to “buy low.”

This, I repeat, is a chance of historic magnitude to buy the companies that are going to change the world and power the recovery — like the one I am going to tell you about today.

One company has accomplished a major milestone: The demonstration that the company can produce purified cell populations…

As I’ve explained in discussions about other stem cell companies, the ability to produce pure cell populations is critical. The FDA is extremely concerned that the introduction of unpurified stem cells might cause inappropriate cell growths, or even cancers. Geron’s nonpurified stem cell lines did, in fact, produce microcysts in early tests.

For liver or any other stem cell therapy, therefore, it is critical that the cells used in a therapy are only the type needed for that therapy.

While I had little doubt that this company would solve this problem, I had no idea what the solution would be.

I spoke to the leading researcher who helped me understand this breakthrough technology. Essentially, this company has discovered how to replicate a feature of early embryonic development that begins the process of cell differentiation. Known as the “primitive streak,” it is the initial division of undifferentiated embryonic cells into “bilateral symmetry.” Some bioethicists, in fact, consider this event the “ensoulment” or beginning of life.

Regardless, the primitive streak has unique characteristics that provoke very specific movement of cells within the embryo. The important thing to know is that this company has created artificial primitive streaks. Therefore, they can provoke purified cells to migrate into purified cell populations.

This company also enrolled the first US-based donor in its program to establish the clinical-grade human parthenogenic stem cells capable of immune-matching most humans.

It has already gone through the rigorous bureaucratic and regulatory process to assure that the cells created by these donor cells are acceptable to the FDA.

Regulatory approvals were obtained from the Institutional Review Board (IRB) and the Stem Cell Research Oversight (SCRO) Committee. Cell lines have already been collected offshore, but the American side is critical to the company’s road map.

Highly purified stem cells are not just effective replacement cells; they are young. People who use these cells for therapies will have organs and tissues with life spans that will extend for as much as a hundred years or more.

This will change the nature of medicine as we know it…

It’s the future of biotech. And I believe this amazing technology could eventually improve… and extend… every life of every person on earth…

Regards,

Patrick Cox,
for The Daily Reckoning

Get Rich Slow originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

Partly, it is because North America saw mobile phones so early. When other regions finally rolled out mobile phones, infrastructures were more modern. The larger reason, however, is that there is so much at stake.

Right now, there are a limited number of players in the lucrative payment network world. Visa, MasterCard and American Express would like to move to your phone. They fear, however, that enabling electronic wallets in phones would allow aggressive young players onto their turf. PayPal, Amazon and Google are, in fact, financial networks, and they would love to do your banking.

So far, progress has been slow, but the emergence of Android is opening up new possibilities. Work is being done by the Mobile Payments Industry Workgroup that would establish standards. What we know for sure is that the established payment networks will do their best to keep out upstarts. We also know they will fail.

Part of the reason for this is political. Part is cultural.

The politics are that Wall Street and the major banks have never enjoyed lower public regard and support. Consumers sense that the bailout profited rich bankers more than consumers. The customer base is not going to support politicians who continue to put the interests of favored banking institutions above those of consumers.

Eventually, market forces always win. Currently, retailers are capable of dealing with only a few credit and debit card companies. This limits competition and keeps prices higher than they would otherwise be. A sophisticated mobile payments infrastructure, which is inevitable now that the Android has broken free, will arise. In fact, it will arise before most people know it’s happened.

The cultural factor I referred to is the difference between the old-school financial institutions and the new electronic services. I have little confidence that Visa or MasterCard is going to do what’s necessary to exploit the convergence. They’re too habituated and institutionalized.

PayPal, Amazon and Google, however, are populated by people who want to transform the financial world. They will find a way to force themselves into an industry that has lost serious credibility and clout due to its participation in the ongoing subprime mortgage fiasco.

Fortunes will be made by financially sophisticated app developers.

Finally, I’d like to get a little speculative and tell you what I think the real long-term consequences of the Linux/Android revolution will be.

It’s not well known, but Peter Thiel, one of the founders of PayPal, was motivated by quite subversive goals. His initial purpose was to create a mechanism for financial transaction outside the reach of governments. He has written:

As an entrepreneur and investor, I have focused my efforts on the Internet. In the late 1990s, the founding vision of PayPal centered on the creation of a new world currency, free from all government control and dilution — the end of monetary sovereignty, as it were.

Obviously, he has not succeeded. Nor do I think we’re going to see such a purely private system in the near future. However, we are moving very rapidly toward developing an electronic infrastructure that would enable brand-new forms of banking. Given our recent experience with the federally controlled financial system, the need is clear.

I won’t detail here how I think this new banking will function. For now, however, I’d just like to warn you that you shouldn’t be too surprised to see completely transformed financial institutions arise from the current rubble. Who knows? Maybe Thiel will be proved right. For extra credit, you can read F.A. Hayek’s Denationalisation of Money: The Argument Refined online here.

Regards,

Patrick Cox
for The Daily Reckoning

Banking on Your Phone originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

Partly, it is because North America saw mobile phones so early. When other regions finally rolled out mobile phones, infrastructures were more modern. The larger reason, however, is that there is so much at stake.

Right now, there are a limited number of players in the lucrative payment network world. Visa, MasterCard and American Express would like to move to your phone. They fear, however, that enabling electronic wallets in phones would allow aggressive young players onto their turf. PayPal, Amazon and Google are, in fact, financial networks, and they would love to do your banking.

So far, progress has been slow, but the emergence of Android is opening up new possibilities. Work is being done by the Mobile Payments Industry Workgroup that would establish standards. What we know for sure is that the established payment networks will do their best to keep out upstarts. We also know they will fail.

Part of the reason for this is political. Part is cultural.

The politics are that Wall Street and the major banks have never enjoyed lower public regard and support. Consumers sense that the bailout profited rich bankers more than consumers. The customer base is not going to support politicians who continue to put the interests of favored banking institutions above those of consumers.

Eventually, market forces always win. Currently, retailers are capable of dealing with only a few credit and debit card companies. This limits competition and keeps prices higher than they would otherwise be. A sophisticated mobile payments infrastructure, which is inevitable now that the Android has broken free, will arise. In fact, it will arise before most people know it’s happened.

The cultural factor I referred to is the difference between the old-school financial institutions and the new electronic services. I have little confidence that Visa or MasterCard is going to do what’s necessary to exploit the convergence. They’re too habituated and institutionalized.

PayPal, Amazon and Google, however, are populated by people who want to transform the financial world. They will find a way to force themselves into an industry that has lost serious credibility and clout due to its participation in the ongoing subprime mortgage fiasco.

Fortunes will be made by financially sophisticated app developers. One of the companies covered in my investment service Breakthrough Technology Alert, is clearly in this category.

Finally, I’d like to get a little speculative and tell you what I think the real long-term consequences of the Linux/Android revolution will be.

It’s not well known, but Peter Thiel, one of the founders of PayPal, was motivated by quite subversive goals. His initial purpose was to create a mechanism for financial transaction outside the reach of governments. He has written about it.

As an entrepreneur and investor, I have focused my efforts on the Internet. In the late 1990s, the founding vision of PayPal centered on the creation of a new world currency, free from all government control and dilution — the end of monetary sovereignty, as it were.

Obviously, he has not succeeded. Nor do I think we’re going to see such a purely private system in the near future. However, we are moving very rapidly toward developing an electronic infrastructure that would enable brand-new forms of banking. Given our recent experience with the federally controlled financial system, the need is clear.

I won’t detail here how I think this new banking will function. For now, however, I’d just like to warn you that you shouldn’t be too surprised to see completely transformed financial institutions arise from the current rubble. Who knows? Maybe Thiel will be proved right. For extra credit, you can read F.A. Hayek’s Denationalisation of Money: The Argument Refined online here.

Regards,

Patrick Cox,
for The Daily Reckoning

Banking on Your Phone originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

Sometimes, breakthrough technologies quietly emerge in mature, well-established industries. One particular transformational technology company, for example, can more than double the economic efficiency of electrical motors and generators.

The global market for electric motors and generators is enormous, dwarfing even the computing market in size…and it has been around for over 100 years. Almost every ampere of electrical current flowing into your home was originally produced using an electrical generator. Moreover, almost every appliance and device that turns electrical energy into mechanical work uses an electrical motor to do it.

Motors and generators accomplish the same electrical/mechanical conversion, though in the opposite direction. In a sense, they are mirror image devices, but they rely on the same basic technologies.

The electrical revolution of the 20th century, motors and generators being the most important component, owes an enormous debt to 19th-century innovators such as Michael Faraday and Nikola Tesla. Faraday, a chemist by education, carefully studied the relationship between electricity and magnetism. In so doing, he discovered the principle of electromagnetic induction in 1831. Electromagnetic induction is the production of electrical current by the motion of an electrically conductive material through a magnetic field.

Faraday went on to formulate what is now called Faraday’s law of induction, a basic law of electromagnetism. The discovery ranks as one of the greatest, if not the greatest, electrical discoveries of all time. Using these new principles, Faraday went on to build some of the earliest electrical generators and motors.

Faraday’s designs, however, were rudimentary and lacking in terms of efficiency and practicality. Later in the 19th century, Nikola Tesla designed improved electrical generators and motors. This included construction of the first induction motor in 1883.

While walking through a park, Tesla’s mind conjured an image of an iron rotor spinning in a rotating magnetic field. The invention ended up serving a double purpose. When supplied with an electric current, this design could be used as a motor, converting electricity to mechanical force. On the other hand, if the rotor itself were spun by an outside force, from coal and falling water to gasoline and wind, the design could be used to produce electrical current.

The rest, as they say, is history. Tesla’s invention was a key driver for the growth of the world economy in the 20th century. Without his innovations, our modern lifestyles would not exist.

No longer did industrial processes have to rely on mechanical and hydraulic methods to transmit power. Electricity could be generated with an induction machine at one location and then sent over long distances on wires to power another induction machine for conversion to mechanical work. Moreover, the electric motor revolutionized our homes and spurred further transformational technologies. Among them are work-saving appliances such as the washing machine, refrigerator and radio. Tesla’s patents are the original intellectual source of every commercial generator and motor on the market today.

Conventional motor and generator designs suffer from several drawbacks, however.

For example, in small mobile applications such as automotive alternators and portable generators, both machines that do not use permanent magnets, conventional designs suffer from low efficiency. A lot of energy is lost in forms of wasted heat and vibration. Moreover, they are bulky and heavy for the amount of electricity they generate.

Machines that do use permanent magnets are generally much more efficient. They are also more compact. The magnets they use, however, come with an entirely new set of problems.

Permanent magnets that generate sufficient magnetic field relative to their size for modern purposes use rare earth elements. As most investors know, rare earths are, as the name suggests, scarce and expensive. They are also subject to political risks. Rare earth magnets also suffer from temperature-related performance limitations. Rare earth magnets are very sensitive to heat and do not perform well at temperatures over 200 degrees Fahrenheit. As a result, they normally require some form of active cooling that limits their application.

It is reported that late in life, Tesla announced that he had solved some of the inherent limitations of the induction machines he originally invented. Unfortunately, he died without leaving a detailed description. Tesla’s unrealized induction machine ideas have become part of the rich body of urban legends regarding secret Tesla technologies. Fortunately, there is more than enough reason to believe that he was correct when he said that the means to radically improve induction machines exists.

In fact, I recently informed the subscribers of Breakthrough Technology Alert about a company that has solved the problems Tesla was working on in his final days. Its road to commercial success has been long and rocky, but it is now, finally, poised to break into the market in a big way.

This company has reinvigorated what was thought to be a stale and stable technology. Its patented technology has the potential to revolutionize an ancient industry.

Sometimes breakthrough technologies emerge in places you would least expect to find them.

Regards,

Patrick Cox,
for The Daily Reckoning

An Electrifying Profit Opportunity originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

Readers of my investment letter, Breakthrough Technology Alert, know that historically, the media, the public and the financial community have resisted big changes. Great ideas have a way of succeeding, but they do it without the help of “the world.” Inventors and scientists routinely spend more time and effort defending their ideas than they spent making their discoveries.

A good example comes from this year’s Nobel Prize for chemistry. The recipient, a scientist at Israel’s Technion Institute in Haifa, used electron microscope technology to discover an entirely new molecular structure now known as quasicrystals. In 1982, while on sabbatical at Johns Hopkins, Dan Shechtman discovered metallic quasicrystals. For nearly three decades, however, he was mocked for saying so. The very notion of metallic, five-sided, nonrepeating crystal structures was ridiculed.

Nobel Laureate Linus Pauling mounted what has been described as a personal “crusade” against Shechtman. “There is no such thing as quasicrystals,” Pauling claimed, “only quasi-scientists.” The scientific team Shechtman was working with gave him the boot for “bringing shame” to his colleagues.

Today, however, scientists all over the world are exploring the potential of nonstick, rust-free, heat-resistant quasicrystals.

Other breakthroughs are even more difficult to recognize. They may involve an unproven superior marketing, distribution or presentation technology. Sometimes, breakthroughs happen when something new is applied to an older and seemingly dated technology. We’ve written here, for example, about new materials that have radically improved flywheels. These energy conservation devices are currently used in high-end race cars and have the potential to save energy and add automobile performance in a more cost-effective manner than batteries.

This is just one example of a new technology revolutionizing an old design and industry. Consider a somewhat less obvious example, Amazon.com.

Healthy retail mail-order businesses existed long before the founding of the Seattle-based company in 1994. Over a hundred years ago, Sears, Roebuck and Co. built a successful business based upon rapidly improving mail delivery service and printing technology. Sears, Roebuck catalogs were common in urban as well as remote rural homes. Customers all over America bought mail-order tools, piano rolls, coca wine and even tape worms for weight loss.

In the ’90s, I was consulting at Netscape, where the truly interactive and open Internet came into existence, along with the encryption technologies that enable secure e-commerce today. In retrospect, Amazon.com’s success seems almost inevitable given the emergence of those tools, but that’s not how people saw it at the time. Enormous skepticism about the practicality of the new technology existed. Mockery was far more evident than belief that the world would change radically due to network technologies.

If the potential and benefits of the Internet and e-commerce had been obvious at the time, we could assume that Sears and other existing mail-order businesses would have taken advantage of the opportunities. With plenty of capital and established supply and distribution networks, it would have been far easier for Sears to build a Web version of their catalog.

The “smart money,” however, considered the Internet a fad with limited practical application. “Trust us,” the experts said, “the real action will always be in the catalog business model.”

Amazon astutely exploited both the shortsightedness of established businesses as well as the emerging electronic communications technology, eclipsing catalog marketers by pushing retail where it had never gone before. Creativity and vision proved more important than the advantages held by pre-existing mail-order businesses. Today, Amazon is the world’s largest online retailer and the premier online shopping destination. Recently, they have even begun to compete with television networks and movie rental businesses via online streaming.

Amazon.com, however, ranks well behind the world’s largest retailer, Wal-Mart. The success of Wal-Mart Stores Inc. is worth discussing here for a number of reasons. One is that Wal-Mart’s stock has increased in value more than 160,000% since its public offering in 1970. It is widely reported that $1,000 of that IPO equity would be worth more than $1.5 million now. Another reason is that it is not obvious that Wal-Mart is even a breakthrough transformational company.

From the outside, Wal-Mart appears just like any other big-box brick-and-mortar retailer. It is not. Inside the wrapper is the founding vision of the Eagle Scout and entrepreneur from Kingfisher, Okla., Samuel Moore Walton. Very early, he realized the power of emerging information technologies. Rather than wasting time telling others about this potential, he implemented it himself.

Walton leveraged emerging IT to boost the efficiency of his logistical supply chain. Other retail companies wasted resources by warehousing goods and then delivering them to stores as need was perceived. Walton did something entirely new. He bought goods only when they were needed imminently and had them shipped exactly where they were needed. He could do this because he had computerized his entire enterprise.

Goods on shelves are not simply idle. They cost money. They tie up capital and shelf space, consuming and wasting resources. Walton realized that he could sell goods for less not just by negotiating better wholesale prices. With new inventory and data mining tools, Walton was able to determine precise location-based needs. He could determine even where within the store a product sells best.

He lowered his real price of the acquisition of goods by reducing storage, financing and transportation costs via IT. Because of those better prices, he sold more. The sales volume he generated then allowed him to negotiate better wholesale costs. Because of superior in-store computerized communications, he could spread information throughout his corporation and deal with problems in record time.

In each of the examples cited above, pioneers of industry were ridiculed and mocked for their ideas…ideas that would become revolutionary breakthroughs in their respective fields. As investors, we can learn a lot from their successes.

Change, after all, is nurtured at the fringe. Embrace it.

Regards,

Patrick Cox,
for The Daily Reckoning

Break On Through originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

While the leukemia research is important, I don’t think that many understand where it fits in the bigger picture of cancer therapy development. I believe, in fact, that there are a half-dozen more- promising therapies.

The anti-cancer treatment that caught the media’s attention is actually a gene therapy from the University of Pennsylvania. Scientists genetically modified three patients’ own cancer-fighting T-cells and gave them back.

For some time, we have been able to modify T-cells to specifically attack cancers. The breakthrough is that this new technology creates T-cells that are very successful at replicating.

While this is exciting, it is not an optimal therapy, for one simple reason: It is a procedure, not a drug.

Because the use of gene therapies using patients’ individual genes is extremely expensive, it is not the best “mass market” solution for treating cancers. To keep costs and delays down, we need off-the-shelf products.

Regenerative medicine is the exception to that rule, because it is the only way to turn the cellular clock of aging back to zero.

Fortunately, there are therapies in development that will be as effective as the U of Penn technology at killing cancers. They will not, however, require genetic engineering for each patient.

Off-the-Shelf Genetic Engineering

One company is developing a technology for attacking cancers that will employ off-the-shelf genetically engineered stem cells.

I spoke with them recently about this lead therapy, which is based on the use of genetically engineered stem cells. Originally, the company will use the government-approved embryonic cell line. Eventually, it is expected that induced pluripotent stem cell lines will be used, due to objections to embryonic cells.

The cells that they will use, by the way, are not capable of developing into embryos. In fact, they are potentiated endothelial cells that have been further modified through genetic engineering. The first drug candidate is a truly brilliant and, to me, surprising application of regenerative medicine.

Endothelial stem cells are the cells that repair the cardiovascular system. They are rare in adults, but are naturally attracted to the new blood supplies created by cancers via angiogenesis. These cells, if transfused into a patient with cancer, will hone in on and stick to cancer cells.

In time, they would be cleared from the body by the immune system because they are transplants. In reality, however, they won’t live long enough to be removed.

Using Stem Cells as Remote-Controlled Cancer Killers

These endothelial cells will have genes turned on using genetic engineering that create very specific enzymes. Once they have attached to the cancer cells, a prodrug will be administered to the body.

A prodrug is not an active drug itself. It is a substance that can be converted into one in the presence of certain enzymes. Since those enzymes exist only in the new endothelial cells that have congregated around the cancers, they convert the prodrug into a lethal cancer-killing drug at the site of the cancer. Once the payload is delivered, another genetically engineered switch is activated via a harmless drug that causes the endothelial cells to undergo apoptosis, cell suicide. They are then removed from the system.

I think the most interesting thing about this therapy is that it is systemic. That is, because the genetically engineered cells are attracted to cancers wherever they are in the body, even metastasized cancers can be targeted.

They are currently doing preclinical studies with transgenic mice. These are mice with human cancers.

This same technology can also be employed for use in diagnostics. Because markers can be attached to these cancer-seeking endothelial cells, it will be possible to use them to locate cancers before they become dangerous. Because different cancers have different markers, it becomes theoretically possible to identify the exact nature of a cancer and tailor therapies for maximum effectiveness.

It bears repeating that the cost of these diagnostics and therapies will be far less expensive and time-consuming than the U of Penn technology.

In times such as these, it’s easy to get discouraged. Don’t be. In five or ten years, maybe less, people will look back and marvel at the people who had the foresight to buy transformational companies like this one when the entire market seemed ready to jump off a building.

Yours for transformational profits,

Patrick Cox
for The Daily Reckoning

Blockbuster Anti-Cancer Technology originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

I’ve been saying for a while that scientific progress is moving so fast that most people are unable to deal with the kinds of breakthroughs that are happening.

I’m even astonished.

I didn’t think we’d see some of the developments that have come to pass in the past months for many, many years.

Transformational breakthroughs have taken place across the scientific spectrum. But the most remarkable and important are in medical biotechs.

Many of the breakthroughs I’m talking about will have a direct and dramatic impact on your healthy life span, or your “health span,” as well as your portfolio. One breakthrough that stands out is a nutraceutical that contains anatabine citrate, a naturally occurring food substance found in solanaceous plants. It directly addresses auto[innate]immune disorders associated with chronic low-level inflammation.

“Game changer” may be an overused cliché, but this is really, truly that.

But before we get to what it is, here is why it is so important…

The name of the neural circuit that regulates the immune response to injury and invasion is the “inflammatory reflex.” Inflammation is a complex mechanism that involves the destruction of damaged cells. It heals salvageable cells and aids in the growth of entirely new cells.

When we are young, the primary role of this important biological response is to heal injury or infection. But inflammation also increases the rate of aging and leads to various pathologies.

Chronic inflammation increases as you age. Eventually, it creates a problem serious enough to trigger a cascade effect. Uncontrolled inflammation causes the simultaneous healing and destruction of cells.

This can lead to: cancers, heart attacks, lupus, IBS, macular degeneration, stroke, obesity, ED, allergies, psoriasis, Crohn’s disease, endometriosis, rheumatoid arthritis, hair loss, diseases of the organs such as the thyroid and liver as well as…

Well, you name it.

Today, scientists have advanced the science much further. Many are now using the term “inflammaging,” coined by Claudio Franceschi, professor of immunology at the University of Bologna.

It appears that our immune systems react to the normal effects of aging as if they were injuries. This initiates inflammation, an immune response. This inflammation causes cellular stress. It is, by definition, an auto- immune disorder. Some scientists call it auto[innate]immunity subclinical syndrome.

It is a vicious circle, a chronic cycle that spins faster and faster until the organism itself eventually fails. Aging, we now know, is not linear. Like so many other things, it is a process that accelerates over time.

However, if there were a way to stop chronic low-level inflammation we could put the breaks on the auto-immune inflammation cycle. If we could stop chronic low-level inflammation. Our bodies could heal naturally.

We would even see cells damaged by past inflammation-related diseases heal normally. We’re not talking about regenerative medicine.

Regenerative medicine promises to replace aged cells and tissue with young telomere-restored cells and tissue. An alternative route is the activation of the telomerase gene, which we know can restore telomeres to youthful lengths.

In the meantime, however, we need to slow the process of telomere loss. For some time, scientists have known that inflammation is the primary accelerator of telomere loss. This is why so few of us reach our theoretical maximum life spans – which could be 120 years or more.

We would be much, much more likely to reach that theoretical upper limit if we aged as we did when we were young. A drug that actually controlled inflammaging would restore the aging process to a more linear progression.

For this reason, many scientists are looking for the means to reduce or stop inflammaging. Not infrequently, this hypothetical drug has been referred to as the “holy grail” of drug discovery.

The market for such a compound would be so big it is nearly unimaginable. Lipitor, technically atorvastatin, does lower indicators of inflammation. The most well-known, because doctors can test for it easily, is C-reactive protein (CRP). CRP levels rise with inflammation and their reduction demonstrates lowered inflammation. As a result, Lipitor is known to reduce the danger of cardiovascular and other diseases for many people.

Measured by sales, Lipitor is the most successful drug in history. Last year, Pfizer sold over $5 billion of Lipitor. This is despite a broad range of adverse effects and competing anti-inflammatory statins. At its peak in 2006, Pfizer was earning almost $13 billion annually from Lipitor.

But the breakthrough nutraceutical I mentioned above is far more effective than Lipitor or the other statins while being safer and cheaper. That, my friends, is the holy grail of modern medicine so many scientists are seeking.

More unbelievable still, they’re saying it isn’t even a drug in the legal sense. The holy grail is an extremely safe nutraceutical – a food that all of us consume in small quantities regularly.

Regards,

Patrick Cox,
for The Daily Reckoning

The “Holy Grail” of Medicine originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

Verne was an extraordinary author and his fertile imagination has inspired generations of scientists and engineers. In one of his works, Verne imagined a voyage to the moon enabled by a gigantic space gun. The fictional cannon, called Columbiad, fired a projectile holding three travelers to the moon. Today, a kind of space gun is moving toward true viability and possible commercial application. But first, a little background…

Due in part to the ballooning US deficit, America’s replacement for the shuttle program, Constellation, has been canceled. Once the last space shuttle mission is completed this summer, Americans will be riding on Russian rockets to get to the International Space Station.

However, America will return to space exploration. The reason is simply that space, as my old friend Robert Heinlein pointed out, is the high ground militarily. Americans may be willing to share the high ground. They won’t cede it.

Using conventional technology, the costs involved in extending space exploration to the moon and Mars are prohibitive. Alternatives to conventional rocket launch must be found if costs are to be significantly reduced to allow real exploration and commercialization.

This is great news for commercial space enterprises and their investors. During the Space Race of the 1960s, the United States investigated every possible method to gain an advantage. One was a collaboration between the US and Canadian defense departments. Unlike more conventional (and expensive) rocket-based technology that would become the standard method of access to orbit, this project was based on the use of large guns.

In fact, the gun itself was based on a recycled 16-inch naval gun. Called HARP, the acronym for High Altitude Research Project, the project achieved several speed and altitude records. The final versions of the projectile/vehicle, called Martlet, blasted 180-kilogram payloads out of the barrel at speeds nearing 4 kilometers per second. These reached altitudes of 180 kilometers, after being subjected to a brief and brutal acceleration exceeding 14,000 Gs.

Unfortunately, bureaucratic infighting between the different US service branches, as well as anti-Vietnam War fallout, ended the US/Canadian collaboration. Funding was terminated by 1967.

In the 1980s, the US government revisited the space gun concept, launching the Super High Altitude Research Project (SHARP). Headed by Dr. John Hunter from 1989-1995 and conducted at the Lawrence Livermore National Laboratory, SHARP used technology far advanced over the old HARP project. Instead of cordite explosive detonation, SHARP used gas gun technology. SHARP set records for kinetic energy above Mach 9. It also successfully launched hypersonic scramjet test vehicles for the Air Force between Mach 5 and Mach 9.

Since then, Dr. Hunter has started a new company, Quicklaunch Inc. Its goal is to commercialize the technology he helped develop at Lawrence Livermore.

Hunter and his partners have produced a design for a true space gun. Essentially, it is a long hollow tube 1,000 meters in length. At one end of the tube, hydrogen gas is pumped into chambers at high pressure and then heated. When the launch initiates, the gas is expelled behind the launch vehicle and accelerated at close to 5,000 Gs. Pictures and video are available at his website.

The gun platform would be sea based and mostly submerged. No real estate would therefore be needed to accommodate the launcher. Since the gun would be buoyed by seawater, its launch angle and direction could be easily varied to put payloads into different orbital inclinations and altitudes.

Why use hydrogen as the propellant? All other things being equal, the lighter the molecular weight of a gas, the higher the speed at which sound can propagate through it is. The maximum rate of expansion for a gas is generally equal to the speed that sound waves can move through it. For this reason, since hydrogen is the lightest element, it is the optimal gas. At 11 kilometers per second, it has the highest speed of expansion.

It is an interesting coincidence that the Earth’s escape velocity is also 11 kilometers per second. Because of inefficiencies, the vehicle would exit the gun at about 6 kilometers per second. When the Quicklaunch vehicle would attain sufficient altitude, beyond most of the Earth’s atmosphere, a rocket motor would ignite. This would supply the remaining velocity required to enter orbit. It would also allow directional maneuvering to a docking point.

Does the space gun require esoteric, undeveloped technology to work? We queried Dr. Hunter regarding the technical feasibility of such a launch device, and he told us that it is extremely attainable. Ballistics has been, for the most part, old hat since Isaac Newton. The Quicklaunch space gun isn’t even that extraordinary in terms of the temperatures, pressures and rates of acceleration it develops.

To compare, the final version of the Quicklaunch space gun will develop an internal pressure of 15,000 pounds per square inch and the hydrogen gas in the chamber will reach a temperature of over 2,600 F. The launch vehicle will experience 5,000 Gs of acceleration. While this may sound extreme, you can pop into your local Wal-Mart and for a few hundred dollars purchase a reliable .30-caliber rifle that develops well over 50,000 PSI with propellants that approach temperatures twice those the space gun develops. Working gas guns like those developed at Lawrence Livermore and Sandia labs already do this. This is very “doable” and, in many ways, old-school engineering.

Of course, people cannot be accelerated at this rate. We black out at around 7–9 Gs; 5,000 Gs would quickly kill a human. Quicklaunch’s business plan is for nonhuman payloads. Nevertheless, we were concerned that high rates of acceleration would create serious engineering issues for any payloads it would deliver.

Dr. Hunter explained that conventional artillery shoots projectiles at over three times the acceleration Quicklaunch’s design requires. Yet we have “smart artillery” with such things as delicate electronic components. For years, in fact, we have had GPS-guided artillery shells and rocket-assisted projectiles.

The big question, however, remains: Does a market exist for Quicklaunch’s platform? After all, orbital gun launch has never been done before. Dr. Hunter says that the main business he envisions for Quicklaunch, when it successfully completes a space gun, will be provisioning an orbiting fuel depot.

Any future manned space missions will be propellant intensive. In conventional rockets, 95% of the weight at launch is propellant. Current launch prices range from $5,000-$10,000 per pound, which is incredibly expensive. Hunter estimates that the company will eventually be able to put fuel in orbit for future missions at only 5% of the current cost, $250-500 per pound.

It takes approximately 100,000 pounds of fuel in low Earth orbit for a moon mission. For a Mars mission, it comes out to a million pounds of fuel per person. The business case is pretty clear. At 1/20th the current rates, cost savings of gun-launched fuel would become a huge enabler for space exploration and commercialization.

There is also a market for satellite resupply at geosynchronous orbit. Some of these satellites use neon and other inert gases for their thrusters. Dr. Hunter opines that there is a business potential for a depot for these substances at geosynchronous orbit, but the more obvious market is for a fuel depot in low Earth orbit. That one is the game changer. It would be the staging ground for Mars.

From a military defense standpoint, another advantage of the space gun is responsive launch. If there is a critical need to surveil some point on the globe from space, the space gun could put an observation platform in space on demand within minutes or hours.

Quicklaunch owns this technology. There is significant IP and expertise involved in the space gun technology, and Hunter and Quicklaunch have a monopoly there. Obviously, the timeline to profitability is filled with unknowns. We aren’t ready yet to invest in this sort of enterprise, but we will be someday.

Regards,

Patrick Cox,
for The Daily Reckoning

Space Guns originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

A certain anti-aging enzyme has captured the attention of the scientific community. Telomerase is the name of this “immortalizing enzyme.” There is no publicly traded company doing real telomerase gene-activation research now. Moreover, there is no guarantee that those who are working in this area will accomplish their goals of stopping or reversing the cellular aging process.

This is, however, an area that investors in transformational technologies should be monitoring closely. So consider this a heads-up.

In the last 100 years, improvements in medical technology have had an enormous impact on life expectancies. In America, life expectancy has gone from 47 years in 1900 to 78 years today. Although life expectancy has improved, the maximum human lifespan of 125 years has not. Few of us make it that far, of course.

Big things, though, are happening in regenerative medicine and anti-aging technologies. Clinical evidence is mounting that one of the most important mechanisms of human aging, telomere shortening, can be arrested or even reversed with drugs that induce telomerase production.

Telomerase is the enzyme that regenerates telomeres. Telomeres form the end pieces of our DNA strands in chromosomes. Without telomerase, telomeres shorten every time a cell divides. As we age, cumulative divisions increase, and the length of the telomere caps decreases. Eventually, the strands get too short to permit cells to divide and regenerate accurately. Cells become senescent – old. Eventually, when enough of our cells become senescent, we die.

Therefore, if we could somehow lengthen the telomeres in human cells, we could theoretically greatly increase human lifespan.

The potential of telomerase-activating compounds, therefore, extends far beyond lifespan extension. Studies show that short telomeres are a risk factor for diabetes, Alzheimer’s, atherosclerosis and cancer. When the cells lining our blood vessels break off because of turbulence in the bloodstream, other cells have to divide to replace them. The replacement cells, of course, have shorter telomeres. Studies have found that the parts of the circulatory system that have the most plaque buildup also tend to have the shortest telomeres.

Alzheimer’s has also been shown to have a connection to telomere length. Although causality has yet to be determined, the brain cells of Alzheimer sufferers are shorter than those who do not have the disease.

Until recently, most scientists believed it was impossible to halt or reverse the molecular aging that takes place inside of our cells. That began to change with the publication of a paper detailing a study done by Geron Corp., Sierra Sciences, T.A. Sciences and the Spanish National Cancer Research Center.

The paper describes the activity of TA-65, the first compound discovered that activates telomerase in the human body. T.A. Sciences, based on licensing from Geron, markets TA-65. Geron is the original discoverer of the compound. TA-65 is derived from the roots of Astragalus membranaceus, a plant used in traditional Chinese medicine.

But TA-65 is a relatively weak telomerase-activating agent. The question, therefore, is, “What would a strong telomerase inducer do?” Specifically, many scientists wanted to know if telomerase could merely slow the aging process, or whether it might actually turn back the clock.

The journal Nature recently published an article showing that telomerase reverses the aging process in mice genetically engineered to lack the enzyme. The study was carried out by scientists at the Belfer Institute for Applied Cancer Science and various departments of Harvard Medical School.

Let me explain the purpose of the study by quoting the source. This is a little technical, but it is worth reading carefully:

An aging world population has fueled interest in regenerative remedies that may stem declining organ function and maintain fitness. Unanswered is whether elimination of intrinsic instigators driving age-associated degeneration can reverse, as opposed to simply arrest, various afflictions of the aged.

To find out if these dramatic effects are reversible, Dr. Ronald DePinho’s team engineered mice with the telomerase inactivated in such a way that it could be turned back on by feeding them the chemical 4-OHT. The researchers allowed the mice to grow to old age without the enzyme, and then reactivated it for a month.

Nature News reports the following: “What really caught us by surprise was the dramatic reversal of the effects we saw in these animals,” says DePinho. He describes the outcome as “a near ‘Ponce de Leon’ effect” – a reference to the Spanish explorer Juan Ponce de Leon, who went in search of the mythical Fountain of Youth. Shriveled testes grew back to normal and the animals regained their fertility. Other organs, such as the spleen, liver and intestines, recuperated from their degenerated state.

The one-month pulse of telomerase also reversed effects of ageing in the brain. Mice with restored telomerase activity had noticeably larger brains than animals still lacking the enzyme, and neural progenitor cells, which produce new neurons and supporting brain cells, started working again.

“It gives us a sense that there’s a point of return for age-associated disorders,” says DePinho. “Drugs that ramp up telomerase activity are worth pursuing as a potential treatment for rare disorders characterized by premature ageing,” he says, “and perhaps even for more common age-related conditions.”

Over the past decade, Sierra Sciences has been working on finding more potent telomerase-activating compounds. Laboratory tests reveal that several of these molecules have 100 times the potency of TA-65. These, however, are man-made molecules and would require many tens of millions of dollars to obtain regulatory approval.

Currently, the company is looking at naturally occurring substances because they would be easier to bring to market than a man-made drug. Sierra Sciences has discovered various natural compounds that increase telomerase production, but it is not yet clear if they will increase telomere lengths.

Telomerase research is still in the early stages, but the financial implications of success at extending life spans through regenerative medicine would be unfathomable.

Time is the one product for which there is unlimited demand.

Regards,

Patrick Cox,
for The Daily Reckoning

The Immortalizing Enzyme originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.