Apple is asking its suppliers to shift production out of China (because maybe it isn’t the best idea in the world to put all your eggs in one big authoritarian communist basket).
Apple owes a large part of their success to outsourcing all their production to China and establishing one of the most efficient supply chains in the world. But this also resulted in the company becoming way too over dependent on China (who isn’t exactly BFFs with the U.S., even in the best of times).
According to Nikkei Asian Review, Apple has asked multiple Chinese suppliers — including Foxconn, Pegatron, Wistron (and my step-dad Ron) — to shift 15% to 30% of production to countries in South East Asia.
Obviously Apple’s decision is motivated by trade tensions between the U.S. and China. But reportedly, even if the Trade War is resolved tomorrow, they will still press their suppliers to diversify their production.
This trade war was just the wakeup call Apple needed to pack its bags and go. (You go, girl! And by “girl,” I mean genderless multinational technology corporation.)
Apple has dabbled with some light diversification in the past (everyone does in college), moving the production of some of its cheaper iPhones to India. As it stands, however, 90% of the company’s production remains in China.
IPhone assembler Foxconn said it’s ready to shift production out of China to existing plants elsewhere if necessary. But diversifying Apple’s entire supply chain won’t happen overnight.
This is going to be a long process that takes years. (And we are going to sort out this trade war thing long before then. Right, guys? Guys?)
“There is some flexibility to move Mac and other products, but it won’t be easy,” said Mehdi Hosseini, a supply-chain analyst with Susquehanna International Group told the Wall Street Journal. “You have to have relatively skilled labor. You have to create an inventory hub. It would take time.”
Yesterday, Apple sent a letter to U.S. trade representative Robert Lighthizer, saying tariffs on its products would hurt its ability to “contribute to the U.S. economy.”
As the largest U.S. corporate taxpayer and contributor of billions of dollars to the U.S. economy, Apple’s polite threat holds some polite weight.
There is a major shift happening in the tech world right now. A brand new tech is on pace to transform our civilisation… and could even destroy the Big Four – Google, Facebook, Amazon, and Apple.
Gold Surges to 6-Year High
Like that friend who lives to feed off your misery, Gold is doing fine, folks!
That’s right, the commodity that bored-and-unimaginative editors like to call “the yellow metal” surged to a six-year high overnight.
U.S. gold futures peaked at $1,415.40 an ounce, settling around the $1,397 mark in the morning trading. All told, gold prices have risen by nearly 4% this week — the biggest rise we’ve seen since April, 2016.
And because gold thrives in misery, that means something must be going on. For some insight into what’s driving gold price higher, I spoke to analyst and Money & Crisis editor Graham Summers:
“Under normal circumstances, gold is less attractive than many investments that pay dividends/yields,” says Graham.
“However, Central Banks are now cutting interest rates into NEGATIVE territory as a way to stop the Everything Bubble from deflating.
“When Central Banks cut interest rates into negative territory, those who own bonds for these countries are PAYING the country for the right to lend it money!
“In this scenario, gold, which yields nothing, is WAY more attractive than both the euro and the yen – both of which have negative interest rates. Not to mention bonds that are issued in these currencies…
“As a result of this, gold is beginning to break out against every major currency.”
In short, low yields (likely combined with rising tensions in the Middle East) are driving gold prices higher.
For now, let’s take a gander at some of those fun “tensions in the Middle East”.
The U.S. Almost Bombed Iran Last Night
If we could get to the end of today without a war, I’d be mighty happy, folks.
Nothing ruins a couple of frosty ones on a Friday like kicking off a prolonged conflict in the Middle East.
Late last night, President Trump ordered an airstrike on Iran, only to have second thoughts and call it off at the last minute. (Don’t you hate it went you get all dressed up and into your stealth plane and have nowhere to go?)
The president took to Twitter this morning to confirm the incident took place and explain his line of thinking behind the aborted operation.
“We were cocked & loaded to retaliate last night on 3 different sights when I asked, how many will die. 150 people, sir, was the answer from a General. 10 minutes before the strike I stopped it,” he wrote. “[N]ot proportionate to shooting down an unmanned drone. I am in no hurry.”
Cocked & Loaded is the title of the official porn adaptation of this geopolitical crisis.
The aborted airstrike was launched last night as retaliation to an Iranian attack which downed an unmanned U.S. done over the Strait of Hormuz.
Iran claims the drone was flying over Iranian airspace (in which case, it would have fully been in their rights to shoot it down) while the U.S. military asserts it was in international waters (in which case, don’t shoot at our stuff, guys. It’s really expensive).
Political tensions have been high since President Trump pulled the U.S. out of the Iran Nuclear deal last year and imposed harsh sanctions on Iran.
As it stands, there is no diplomatic channel between the U.S. and Iran. Officials from Iran have said that they won’t even consider coming to the table for negotiations because the U.S. can no longer be trusted (and our food makes them gassy).
The president indicated in a tweet that more sanctions were placed on Iran last night, in lieu of an armed conflict. But the details have yet to be made public.
AI: Job Killer or World Changer?
Depending on who you talk to, it’s either the single most important technology of our lifetime or it’s going to straight up pulverize humanity into a soggy cantaloupe.
Elon Musk, for instance, told the National Governors Association that the idea of AI wiping out jobs is “the scariest problem to me.”
But George Gilder, America’s #1 futurist, says Elon is wrong. (He’s also said Musk a “genius” and “fool” in the same breath, which is probably a fair read of the situation.)
George’s job is to predict how technology will shape and change our future. And he’s good at it, too.
He predicted the iPhone 13 years before its release. And told Ronald Reagan that the microchip was the technology of the future (way back when you told Ronald Reagan those kinds of things).
I had a chance to speak to George recently, and I used that opportunity to ask him why he wasn’t worried about AI taking over the world.
“Through history, technologies have emerged that replaced the worst jobs — allowing human beings to do other, better things,” says George.
“In other words, artificial intelligence and all other technologies will only serve to enhance human productivity.
“It should thus render humans more employable, while at the same time generating the capital to endow new work.
“Consider the internet. The internet disrupted several industries, but ultimately multiplied jobs overwhelmingly.
“Can AI be developed to restock shelves at Walmart? Yes.
“At that point, I can’t predict exactly what each person in Walmart is going to end up doing.
“But I can predict that AI can generate a wealthier society. One where there’ll be more projects for more individuals.
“And the productivity that AI can unlock will make each employee capable of a greater variety of functions.
“This will unleash more creativity and thus more opportunities that are better, safer, and more exciting for human beings.”