There’s a new Cold War between the U.S. and China… And it’s being fought over this breakthrough tech… In the mailbag: “Politicians are nothing more than parasites”…
We’re talking in every home in the country… every business… every military installation… every R&D lab… and every politician’s and lobbyist’s office in Washington, D.C.
Now, imagine those devices are eavesdropping round the clock on every phone call… and all internet traffic… that passes through them.
And imagine that on the other end of these listening devices is a Chinese government spy.
It’s all part of the new tech cold war between the U.S. and China we’ve been telling you about.
And as you’ll learn in today’s dispatch, it spells profits for investors in the right companies…
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But President Trump’s real beef with Beijing isn’t the trade deficit… or the price of Chinese steel… or the soybean market.
It’s China’s bid to surpass the U.S. as the world’s most formidable technology superpower.
China and America are battling it out for tech supremacy on multiple fronts – from artificial intelligence, to robotics, to cryptography, to cyber weapons, to augmented reality, to self-driving cars and drones.
But one of the most important battlegrounds is the buildout of the new generation of wireless communications networks, 5G.
This will bring download speeds up to 100 times faster than the current 4G network.
And as we showed you here, it’s also a critical part of the infrastructure for a range of new technologies. That includes self-driving cars, holographic communication, and augmented reality eyeglasses.
But there’s a snag…
And it starts with Chinese telecom giant Huawei (pronounced “wah-way”).
U.S. and other Western intelligence agencies have warned that Chinese spooks will be able to eavesdrop on all phone and internet traffic in Western democracies if Huawei builds out 5G.
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He called Huawei-built 5G networks in the West an “unacceptable risk” to national security.
He ordered U.S. firms to freeze cooperation with Huawei. And he told America’s allies to steer clear of Huawei when it comes to their 5G networks.
It’s easy to see why.
Here’s how our tech expert at Legacy Research, Jeff Brown, explained it…
Huawei was installing spyware on its internet routers. This was watching traffic in Western democracies.
Without getting too far into the weeds, Huawei networking equipment was routing all internet traffic from Western nations to China.
So let’s say that traffic was intended to go from the U.S. to Israel. Well, rather than going directly to Israel, it would go from the U.S., to China, and then to Israel. This allowed the Chinese to capture and analyze all that traffic.
This isn’t all that surprising.
Huawei was founded by Ren Zhengfei, a former member of the Chinese military, the People’s Liberation Army (PLA).
And according to the CIA, Huawei got funding from the PLA… as well as Chinese intelligence agencies.
Given this track record… and its close ties with the Chinese intelligence agencies… it’s no wonder Trump wants to stop Huawei from dominating 5G.
As we showed you here, nations that lead the way in deploying 5G networks will have a competitive economic advantage over their rivals. As Jeff put it…
In the U.S. alone, roughly 3 million jobs and $500 billion in GDP growth will be created from this massive trend. And globally, it’ll be responsible for $12 trillion worth of new goods and services by 2035. That’s about 60% of America’s total GDP in 2017.
Technology companies in the countries where these networks are first built out will be the first to develop the hardware and software enabling these 5G wireless services. Then, as those companies sell their technology, services, and 5G expertise around the world, the economic benefit will continue to amass to those leading countries.
It’s hard to see Trump letting up and allowing Huawei to become the world’s dominant 5G player.
Huawei is top dog right now. It’s secured $100 billion worth of 5G contracts. That’s more than five times its closest rival.
But with Huawei now blacklisted in the West, those contracts have been effectively torn up.
Besides Huawei, there are only two other companies in the world capable of building 5G networks – Ericsson (ERIC) and Nokia (NOK).
Both trade in the U.S. And Jeff believes they’ll benefit as Huawei sheds contracts in the West.
If you’re a paid-up subscriber to our Near Future Report advisory, you can read Jeff’s full write-up on how to play the 5G trend here.
5G isn’t the only money-making trend on Jeff’s radar.
At 8 p.m. ET, Jeff’s hosting a free tech investing summit.
He’ll reveal four of his biggest predictions in the world of technology. And he’ll talk about the companies that could make investors at least 10 times their money.
He’s even sharing the name of one of them, on air. So reserve your spot right here.
On Tuesday, we told you gold is going digital in the form of gold-backed cryptocurrencies. And we showed you how it will trigger a huge gold mania.
But one of your fellow readers isn’t convinced…
My concern with crypto gold regards where it may be headed. Very few users would actually exchange their crypto for physical gold. So it’s just a matter of time before the Money Changers get involved and start creating digital PM tokens not backed by physical gold, as with the current paper market. Then they’ll be able to manipulate the price just as they do now.
– Ben B.
Meantime, one reader takes us back to Legacy Research cofounder Bill Bonner’s theory about win-win versus win-lose deals…
I think I finally get it, the win-win thing. Like free socialized medicine for everyone, that’s win-win.
It’s a win for the sick people, who will get help, and for the healthy, who worry about their sick friends and relatives. It’s also a win for the corporations, which no longer have to factor health care costs against their bottom line and know that their pool of potential workers are more likely to be healthy from the get-go.
It’s a win for society, as governments, due to their size, are much better suited to negotiate better pricing and to keep costs under control.
– David D.
Finally, we shift back to Tuesday’s mailbag, where reader Ralph C. said…
It would be really nice if we could change all politicians every two terms. They have no business being in office all of their working life. The majority has not worked a day in their life!
And Ralph’s not the only reader who feels that way…
Ralph C. has it right. Politicians are nothing more than parasites, and it doesn’t matter which end of the political spectrum they represent.
Not one of them does anything that a sensible person would pay them anything for. That includes even the ones that started out wanting to improve the world, or the lot of women, or the climate, etc.
They are all inevitably seduced by the power and benefits their positions expose them to and turn on the common man.
– Al R.
Are politicians always destined to become parasites, seduced by power like Al R. says? Are you worried about government manipulation and interference in technology? Write us at feedback@legacyresearch.com.
Regards,
Chris Lowe
June 6, 2019
Dublin, Ireland
IN CASE YOU MISSED IT…
Our go-to tech expert, Jeff Brown, has agreed to pull back the curtain on four early-stage technologies that could change the world…
On Wednesday, June 12 at 8 p.m. ET, Jeff will reveal all the details during his first-ever “Early-Stage Tech Summit.”
He’ll also reveal the four small-cap tech companies that have the potential to 10x your money over time. You can attend, for free, by reserving your spot here.