Robotics and Health Care: A New Growth Market

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The Daily Reckoning | Tuesday, February 21, 2012 Forget RoboCop...introducing RoboCare, If only Keynes had gone to Carnival! Plus, Bill Bonner on the debauch of Mardi Gras...and the penance of Lent... ------------------------------------------------------ Secret Photos China Doesn’t Want You To See A new groundbreaking project is threatening China’s global rare earth monopoly. This little-known company’s operations are unlike any other in the world. And could be incredibly lucrative for early movers. Check out this epic story by clicking here.   A Carnival of Errors Economic Recovery Without the Pain of De-Leveraging   Bill Bonner Reckoning today from Buenos Aires, Argentina... If only Keynes had gone to Carnival! Buenos Aires is hot and humid. We wilt. We slow down. We find it hard to breathe. It’s like Maryland in the summer time. But the humid weather doesn’t stop the partying. We arrived at 2AM. A drum band was performing...amid shrieks of laughter...about a block away. It’s Carnival time in South America, a rush of late night revelry before the party stops for Lent. Yesterday was a holiday; so is today. The origin of the word ‘carnival’ means ‘take out the meat.’ Christians are supposed to give up meat for the 40 days preceding the crucifixion and resurrection of Christ, from Ash Wednesday to Easter Sunday. Fat Tuesday, or Mardi Gras, gives them a last chance to let loose...to eat and drink heartily...before the Lenten fast begins. Pleasure is a greater temptation than pain, for most people. And the feast of Carnival was always much more agreeable than the abstinence and prayer of Lent that came after it. So it won’t surprise you, Dear Reader, that people have tended to enjoy the debauch of Mardi Gras and forget the penance altogether. Everybody wants the resurrection; nobody wants the crucifixion. Everybody wants recovery; nobody wants de-leveraging. Everybody wants to be born, but nobody wants to die. John Maynard Keynes should have noticed. His idea was that the feds would run surpluses in the fat years and deficits in the lean years. But it ran onto the jagged shoals of human nature...the same animal spirits that animated the crowds outside our window last night. It doesn’t take much self-discipline to run a deficit or to celebrate Carnival. Running a surplus...or fasting...is another matter. Carnival is easy. Lent is hard. So, when the crisis of ’07-’09 came, the feds had no money saved to counteract it. All they could do was to borrow...and make it worse. More on this below, after today’s column...   External Advertisement If You Or Anyone You Know Is Thinking About Silver... Then this report is a must-read. It exposes a massive scheme involving powerful banks... questionable trades... secret informants... perhaps even the federal government itself. It’s all converging right now into the biggest short squeeze in history. It could be big enough to push silver past $200. Report here (free as a special service). The Daily Reckoning Presents Robotics and Health Care: A New Growth Market   Ray Blanco There are truly exciting developments afoot in the field of robotics. Uncomfortably humanlike Japanese toys aside, we are starting to see more and more applications for robot technology gaining steam in the market. According to the Japan Robotics Association, the consumer robotics market is projected to reach 24 billion this year, and balloon to 66 billion by 2025. I personally think that the long term estimate is a bit pessimistic. Bill Gates is on record for predicting that robots will be as common as computers are today. If he is even half right, investors that get in on promising techs today will be fantastically compensated for their vision and patience in the long run. Getting in on the next wave of robotics now will be like getting in on Intel, AMD, Apple, and Microsoft in the 1980s. Of course, the Great Recession has dealt a few temporary blows. A mainstay of the robotics industry has been assembly line machines for the automobile manufacturers. But the robotics industry is diversifying, and the automotive industry itself gives a good example of what can happen. While automobile sales plummeted during the Great Depression, crucial improvements in automotive technology like the fully automatic fluid transmissions and hydraulic brakes were being made that would revolutionize motoring once it was all over. Once that storm passed profits and sales went up, along with share prices. Robots are already being used for dangerous jobs that humans would rather not do. The US Commerce Department decided to fund a project with Fibrwrap Construction Inc. to develop robots that will be able to repair aging water transmission pipelines from the inside. The advantage of this method is that the infrastructure won’t have to be torn out of the ground to be repaired. But the robotics market is rapidly spreading beyond these types of dangerous applications... Robotics is being aided by a simple economic fact: while cost of production for goods has generally declined over time, prices for services generally don’t fall quite as much. Consider that your computer costs a fraction for the performance you receive compared to two decades ago, but the technician that repairs it has generally remained quite expensive to hire. Food prices, to give another example, have fallen steeply in real terms over the last century. This is not only due to better agricultural techniques, but also because of increased automation. From John Deere and Alice-Chalmers, from the balers to combines, mechanized agricultural equipment has drastically reduced what we have to pay to consume our daily bread. Robotics will be no different, and we are on the cusp of big changes. In our day and age, the healthcare service industry has proven highly resistant to price declines partly because of labor costs. Improved robotic automation is one of the fastest ways to increase productivity and reduce labor costs. With the leading edge of the Boomer generation entering retirement, there will be huge financial incentives for improved robots. There will be tremendous demand for anyone that can build an affordable robot that can help with housekeeping and basic care. Families that want to keep older members out of assisted care facilities and closer to home will look to robots for help. I spoke with Martin Spencer, President of GeckoSystems International Corp. regarding his vision for robot assisted health care. Having spent over a decade working on his dream of a personal care robot, his company has developed unique technology that is starting to demonstrate its usefulness in marketable models. According to Spencer, the hardest problems related to robotics in this role are software and AI related, not hardware related. Their flagship robot, called CareBot, has advanced modular artificial intelligence and a proprietary compounded sensor system that allows it to reliably move about the typical home landscape. Unlike other robot designs that seek to reduce sensor inputs to cut down on processing overhead, GeckoSystems’ CareBot is sensor loving. This property is necessary if a viable multipurpose self-directed robot is to become successful. The main reason is because multiple inputs help to give the robot a better reading on its environment. For example, when you are driving a car, you not only receive inputs through your vision, but also through the sensing of acceleration or deceleration, engine vibration, a honk from a nearby car, or the bump of a collision. Being able to use multiple sensor feeds is particularly important in a robot that needs to move about the home on its own. The CareBot also has an AI module that is designed for human/robot interactions. This module, called GeckoChat, can respond to voice requests, create voice reminders, and even engage in word games with a human being. The beauty of GeckoSystems’ AI platform is that it can run on common PC hardware and operating systems like Windows XP and Linux, keeping down costs. Spencer estimates that the CareBot can pay for itself in a matter of months, due to the high cost of assisted care. Along with my colleague Patrick Cox, I am closely investigating advancements such as CareBot, along with other opportunities in this space. These life-changing technologies will become commercialized sooner than you may think. Regards, Ray Blanco, for The Daily Reckoning P.S. If you want to ensure you’re kept up-to-date with the latest breakthroughs in this space — and many others besides — you can sign up for a risk-free trial of our Technology Profits Confidential. Here’s all the info you need.   Only 62 People Know Exactly Why These Four Companies Could Change the World Now you’re #63 “on the inside” — and you’re on the verge of raking in lasting wealth. This could go down in history as the story of our era. Click here for all the details.   And now back to Bill with the rest of today’s reckoning...   Bill Bonner “It was so much more tranquil in Nicaragua,” Elizabeth remarked. “All we heard was the crashing surf at night. It was peaceful. There’s nothing very restful about a steel drum band.” We left Baltimore about 10 days ago. We’ve stopped in Miami...Managua...San Jose and Panama City. Now, we’re on the Rio Plata...in the Palermo Soho section of Buenos Aires. “Did you see the Dollar Sniffers at the airport?” asked a friend. “The what?” “The dogs. The police have trained dogs to be able to detect dollars in your luggage.” “Why would they do that?” We’ve heard about the ‘risk off’ trades in Europe and America. Fearful investors forsake their Portuguese bonds and Chinese stocks for the relative safety of US dollars. But here, the safety of the dollar is a more tangible and more immediate concern. “People are getting nervous again. The inflation rate is increasing. Nobody knows for sure. The government lies. And they threaten to put you in jail if you publish an alternative number. “So people watch the prices for pizza and hamburgers. There’s a pizza chain that sells the cheapest pizzas in Argentina, called ‘Uggi’. It’s so cheap you have to pay extra if you want a cardboard box. They put their prices right on the front of the store. So you can see immediately how much prices are going up. I think they’re going up at about a 25% rate. More than 3 times faster than the government claims. “We used to watch the price of a Big Mac combo, too. But the government put pressure on McDonald’s to hold down the price...in exchange for some tax benefit or something. “The Argentine economy is really very robust. It has to be. People have to find ways around all these stupid laws. They pass a law to prevent you from importing something because they want to ‘protect’ some local industry that the politicians have an interest in. Or they pass a law to prevent you from exporting something because they want to force you to sell it to local people at a low price. “Those dollar-sniffing dogs, for example, are another way they try to keep people from protecting themselves from the government’s inflation. They don’t want people to convert their pesos into dollars...and then take them out of the country. “They also make it hard for you to spend money. You have to show where you got the money. Otherwise, the seller is likely to denounce you to the police. So people are careful. They don’t want to buy. They don’t want to spend. What a way to run an economy! “I’ve got a friend who sells Harley Davidsons. He has customers who want to buy them, but he can’t get them. Because the government is trying to favor some other industry. And then they stopped you from importing tires...so you couldn’t get tires for your car. That’s why you see so many trucks with bald tires. It’s dangerous. But it’s just what you get when you start monkeying with an economy. “That’s why I like living down here. It’s like an economic freak show. You get to see experiments...and the kind of grotesque results they produce. It also shows why Hayek was right. The free market is the only way you can get any honest information about what people really want...what they’re willing to pay for...what’s scarce and what’s abundant. Freely-set prices have an ‘information content’ that guides the whole system and ends up making everyone better off. “When the government interferes, prices lose their information content. They give misinformation instead. And you end up with the kind of mess you have here in Argentina. Which isn’t that different from what you’ve got in Greece. “It also looks like it is the way the US is going, too. “You know, 100 years ago, this was as rich as the US...or almost. This city was a rival to New York. Hundreds of thousands of immigrants came in...found jobs...built railroads...opera houses...restaurants...monuments. It looked like Argentina would become one of the world’s leading industrial as well as agricultural powers. “Instead, the country took a direction that nobody really wanted. I mean, nobody wanted Argentina to be a second-rate economy with a barely-functioning market economy. But that’s what we’ve got. Because, as you would put it, the zombies got control of the government. Most of the voters were here in the city. And the Peron government realized that most of them could be bought...with giveaway programs and government jobs. The people voted for Carnival, you might say. They didn’t vote for Lent. “And once the system was corrupted — paying off the zombies by imposing more and more restrictions and taxes on the productive economy — there was no way to fix it. There were more zombies than producers. They won every election. They still do. “The urban masses control the elections. And the urban masses want to be zombies — with public health, pensions, jobs, subsidized gas and electricity, and so forth. Here they even subsidize the price of a steak, by making it hard for ranchers to sell their beef on the open world market. “And from what I read in the paper, I think America is doing essentially the same thing... “Also, in fairness I should say that Argentina is still a relatively agreeable place to live. The food’s good. The people are generally very friendly. The weather is usually good too. And it’s fun to watch people doing such wacky things... “But it’s a lot more fun to watch...obviously...if you have a bank account in Miami.” Regards, Bill Bonner, for The Daily Reckoning ---------------------------------------- Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com Borrowing Your Way Out of Debt and Other Normal Abnormalities The Role of Youth Unemployment in Staving Off Default A Greek Debt Crisis Recap Greece Gets Next Round of Bailouts Euro Is Yanked From the Slippery Slope! Greece Negotiations Drag On The Daily Reckoning: Now in its 11th year, The Daily Reckoning is the flagship e-letter of Baltimore-based financial research firm and publishing group Agora Financial, a subsidiary of Agora Inc. 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