7:13 PM
By Wayne Cole
SYDNEY (Reuters) - Asian shares
slipped to seven-week lows on Thursday after a dismaying rise in U.S. inflation
bludgeoned Wall Street and sent bond yields surging on worries the Federal
Reserve might have to move early on tightening.
“Higher inflation is a definite
negative for equities, given the likely rates response,” said Deutsche Bank
macro strategist Alan Ruskin.
“The more nominal GDP gains are
dominated by higher inflation, especially wage inflation, the more the possible
squeeze on profit margins. It plays to a more choppy, less bullish equity
bias.”
MSCI’s broadest index of
Asia-Pacific shares outside Japan lost 0.6%, though trade was thinned by holidays
in a number of countries.
Japan’s Nikkei fell 1.8%, and
touched its lowest since early January, while Chinese blue chips lost 0.7%.
Asian markets were already on the
backfoot this week amid inflation worries and a tech sell-off on Wall Street,
and nerves were further jangled on Wednesday when Taiwan stocks tumbled on
fears the island could face a partial lockdown amid an outbreak of the virus.
---- Wall Street was blindsided when data
showed U.S. consumer prices jumped by the most in nearly 12 years in April as
booming demand amid a reopening economy met supply constraints at home and
abroad.
The jump was largely due to outsized
increases in airfares, used cars and lodging costs, which were all driven by
the pandemic and likely transitory.
Fed officials were quick to play
down the impact of one month’s numbers, with vice chair Richard Clarida saying
stimulus would still be needed for “some time”.
---- “It likely would take a very strong May
jobs report, with sizable upward revisions to March and especially April, to
get the Fed to start a discussion about tapering at its June meeting,” said
JPMorgan economist Michael S. Hanson.
“We continue to expect the Fed to
begin scaling back its pace of asset purchases early next year.”
---- In the crypto currency space, Bitcoin
steadied after sliding more than 10% when Elon Musk tweeted that Tesla Inc has
suspended the use of bitcoin to purchase its vehicles.
The rise in yields and the dollar
pressured gold, which was left at $1,819 an ounce and off a multiple-top around
$1,845. [GOL/]
Oil prices backed away from
two-month highs, hit after U.S. crude exports plunged and the International
Energy Agency (IEA) said demand was already outstripping supply. [O/R]
Brent was off 46 cents at $68.86 a
barrel, while U.S. crude lost 47 cents to $65.61.
https://www.reuters.com/article/us-global-markets/asia-shares-spooked-by-u-s-inflation-scare-hope-for-fed-calm-idUSKBN2CU01D
U.S. Consumer Prices Jump Most
Since 2009, Outpacing Estimates By Reade
Pickert 12 May 2021, 13:32 BST Updated on 12 May 2021, 14:00
BST
U.S. consumer prices climbed in April by the most since
2009, topping forecasts and intensifying the already-heated debate about how
long inflationary pressures will last.
The consumer price index increased 0.8% from the prior
month, reflecting gains in nearly every major category and a sign burgeoning
demand is giving companies latitude to pass on higher costs.
Excluding the volatile food and energy components, the
so-called core CPI rose 0.9% from March, according to Labor Department data
Wednesday. The surge in the core measure was the largest since 1982.
The median forecasts in a Bloomberg survey of economists
called for a 0.2% rise in the CPI and a 0.3% gain in the core measure.
Treasuries fell following the data, pushing up the 10-year yield to 1.647%,
while the dollar climbed and S&P 500 futures extended losses.
Heating Up U.S. core and headline inflation both jumped more than
forecast in April
The annual CPI figure surged to 4.2%, the most since 2008
though a figure distorted by the comparison to the pandemic-depressed index in
April 2020. This phenomenon -- known as the base effect -- will skew the May
figure as well, likely muddling the ongoing inflation debate.
While Federal Reserve officials and economists acknowledge
the temporary boost, it’s unclear whether a more durable pickup in inflationary
pressures is underway against a backdrop of soaring commodities costs,
trillions of dollars in government economic stimulus and incipient signs of
higher labor costs.
The core CPI measure, which was also biased higher by the
base effect, rose 3% from 12 months ago. That was the largest since 1996. For
the last year the annual core inflation metric had held below 2%.
Wednesday’s report offers insight into bubbling price
pressures across parts of the economy. Wages have shown signs of picking up,
and supply chain challenges have elongated delivery times and driven materials
prices higher.
More
https://www.bloomberg.com/news/articles/2021-05-12/consumer-prices-in-u-s-increase-by-most-since-2009?srnd=premium-europe
Federal Taxes, Spending and
Deficit All Set Records Through April By Terence P. Jeffrey | May 12, 2021
(CNSNews.com) - Federal taxes, spending and the federal
deficit all set records through the first seven months of fiscal 2021 (October
through April), according
to the Monthly Treasury Statement
Federal tax revenues hit a
record $2,143,134,000,000 for the period while federal spending climbed to
$4,074,970,000,000, resulting in a federal deficit of $1,931,836,000,000.
This
is the first time that federal spending has exceeded $4 trillion in the first
seven months of a fiscal year.
More
https://www.cnsnews.com/article/washington/terence-p-jeffrey/federal-taxes-spending-and-deficit-all-set-records-through-0
Beware heightened risks of
‘fragility shocks’ in a market too dependent on the Fed, BofA warns Published: May
11, 2021 at 2:43 p.m. ET
Fragility risks in the market are at the highest ever, as
investors keep looking to the Federal Reserve to extend a massive stock-market
rally that repeatedly has risen to fresh records this year, according
to analysts at Bank of America Corp.
“Markets remain overly dependent on the Fed and are
inherently fragile,” the bank’s equity-linked analysts said in a BofA Global
Research note Tuesday. Two of the four biggest “fragility shocks” since 1928
were seen in the S&P 500 index in just the last three and a half years,
they said in the equity derivatives report.
The stock market is vulnerable after staging a huge recovery
from last year’s trough in the Covid-19-induced selloff — a downturn that
prompted the Fed to swoop in with rescue programs designed to support markets
and an imperiled economy. The S&P 500 has soared nearly 90% from the Covid
low for the second-fastest rally for U.S. equities since 1928, the BofA Global
Research report shows.
Investors have worried that signs of rising inflation in the economic rebound could
result in the Fed tapering its asset purchases or raising its benchmark
interest rate sooner than anticipated. One concern is that a less accommodative
Fed could hurt the valuations of high growth stocks .
The market’s reaction to a weaker-than-anticipated jobs
report on Friday underscored its reliance on the Fed, as the “bad news” was treated as “good news,” according to the
analysts, who pointed to the jump that day in the technology-heavy Nasdaq
Composite index. In other words, stock-market investors took the disappointing jobs report as reason for the central bank to
remain dovish.
“The Fed has their pedal to the metal trying to restore the
pre-Covid labour market,” the analysts wrote. “While the Fed can’t afford to
appear uncertain, their dogmatic confidence that inflation won’t become
problematic is equally suspect.”
----“Markets will likely need to walk a Goldilocks
tightrope over the summer,” the Bank of America analysts said. That means
investors will need to navigate increasingly “tricky territory” where they’re
avoiding both the upside risks of inflation and overheating as well as the downside
risk that “herd immunity remains elusive” as the pandemic persists, according
to their note.
Risks on both sides of the tightrope could be catalysts for
market shocks.
“Fragility will strike again, as valuations and positioning
look stretched,” the analysts warned. “Trading liquidity continues to be poor.”
https://www.marketwatch.com/story/beware-heightened-risks-of-fragility-shocks-in-a-market-too-dependent-on-the-fed-bofa-warns-11620758626?mod=home-page
Finally,
that semi-conductor chip shortage is sticking around for some time. Worse,
prices are rising as demand outstrips supply. But don’t worry, it’s only a
“temporary” shortage, I suppose.
The global chip shortage could
last until 2023 Published Wed, May 12 2021 3:30 AM EDT
Semiconductors will be in short supply for some time to
come yet, according to analysts that monitor the industry.
Today, chips are in everything from PlayStation 5s and toothbrushes
to washing machines and alarm clocks. But there’s not enough to go around —
it’s a multifaceted issue that shows
no signs of abating , leading some to call the current crisis “chipageddon .”
Glenn O’Donnell, a vice president research director at
advisory firm Forrester, believes the shortage could last until 2023.
“Because demand will remain high and supply will remain
constrained, we expect this shortage to last through 2022 and into 2023,” he
wrote in a blog .
O’Donnell expects demand for PCs, which contain some of the
most advanced chips, to “soften a bit” in the coming year but “not a lot.”
Meanwhile, he expects data centers, which are full of
computer servers, to buy more chips in the next year after what he describes as
a “dismal 2020.”
“Couple that with the unstoppable desire to instrument
everything, along with continued growth in cloud computing and cryptocurrency
mining, and we see nothing but boom times ahead for chip demand,” said
O’Donell.
Meanwhile, Patrick Armstrong, CIO of Plurimi Investment
Managers, told CNBC’s “Street Signs Europe” last week, that he thinks the chip
shortage will last 18 months. “It’s not just autos. It’s phones. It’s the
internet of everything. There’s so many goods now that have many more chips
than they ever did in the past,” he said. “They’re all internet enabled.”
The car industry has been affected by the global chip
shortage more than any other sector.
The world’s largest chip
manufacturer, TSMC (Taiwan Semiconductor Manufacturing Company), said earlier
this month that it thinks it will be able to catch up with automotive demand by
June. Armstrong, however, believes that’s ambitious.
“If you listen to Ford, BMW,
Volkswagen, they all highlighted that there’s bottlenecks in capacity and they
can’t get the chips they need to manufacture the new cars,” he said.
Elsewhere, Gartner said on Wednesday
that the shortage will persist throughout 2021, adding that the shortage
impacts all chip types and that chip prices are rising.
Gartner analyst Alan Priestley told
CNBC Thursday that the situation may improve for some sectors in the next six
months, but that there may be a “knock-on effect” into 2022.
More
https://www.cnbc.com/2021/05/12/the-global-chip-shortage-could-last-until-2023-.html
The Lei Aurea (Golden Law) of 1888 had only two
articles:
Article 1: From this date, slavery is declared
abolished in Brazil.
Article 2: All dispositions to the contrary are
revoked.
The new cabinet appointed by Princess Isabel passed
the new bill in seven days, carrying it through on a wave of popular support.
https://library.brown.edu/create/fivecenturiesofchange/chapters/chapter-4/abolition/
Global Inflation Watch. Given our Magic Money Tree central banksters and our
spendthrift politicians, inflation now needs an entire section of its own.
Some U.S.
car shoppers are paying $5,000 over a vehicle’s retail price, research finds Mat
12, 2021
Many U.S. consumers are willing to
pay $5,000 more than the sticker price of a new vehicle, as a global
semiconductor chip shortage has led to a supply crunch at a time when demand
for cars is soaring, a poll by research firm Cox Automotive found.
The chip shortage has forced car
manufacturers to idle factories and cut production, which has created a
scarcity for new vehicles in the market, sending prices of both new and used
vehicles surging.
“More than 40% of car shoppers are
willing to pay above manufacturer suggested retail price right now, and those
willing to pay over MSRP are willing to accept a 12% premium,” Cox Automotive
said on Wednesday.
While vehicle inventory is tight,
access to auto loans has become more available for shoppers, further boosting
demand, the research firm said.
https://www.theglobeandmail.com/business/international-business/us-business/article-some-us-car-shoppers-are-paying-5000-over-a-vehicles-retail-price/
US job openings soar to record
8.1M as companies struggle to hire workers By Will Feuer May 11, 2021 |
1:37pm
US job openings soared to a record 8.1 million in March
while companies struggled to recruit new workers as the economy continued to
heat up, the feds said Tuesday.
Total openings rose almost 600,000 compared to February,
according to the Labor Department’s Job Openings and Labor Turnover Survey, or
JOLTS. The 8.1 million openings is the highest level reported since the data
series began in December 2000, the feds said.
Hiring increased to just 6 million in March from 5.8
million the month before, reflecting the largest gap between vacancies and
hires on record.
The spike in the number of openings in March comes after
the feds said last week that the US added
just 266,000 jobs in April , far below the 1 million new jobs economists
expected.
Companies across industries have confirmed that they’re
struggling to recruit new workers, constraining economic growth just as
businesses finally re-emerge from the pandemic.
The latest data on openings gives
more weight to the argument that there’s an ongoing labor shortage, according
to Jamie Cox, managing partner for Harris Financial Group.
“Basically, JOLTS demonstrates a
surge in labor demand brought about by the reopening of the economy, which is
the reverse of the same period a year ago,” Cox said. “It is important for
people to remember that while the economy is re-opening, that re-opening is
incomplete, bumpy, and comes after a year where being away from a frontline
service job make returning to it less appealing, given other alternatives.”
Economists
have identified a variety of factors keeping unemployed workers from taking new
jobs. One of the key factors, according to Curt Long, chief economist at the
National Association of Federally-Insured Credit Unions, is pandemic-boosted
unemployment benefits . He added that childcare concerns could
also be keeping many at home and out of the job market.
More
https://nypost.com/2021/05/11/us-job-openings-soar-as-companies-struggle-to-hire-workers/
U.S. Lumber
Importers Are Driving Buying Mania for European Wood Marcy Nicholson
Facing skyrocketing lumber prices
The frenzy comes on the heels of record American
forest-products imports from Europe in 2020, when North American demand
Unrelenting building demand means U.S. sawmills have been
unable to catch up, causing suppliers to look to Europe for a reprieve as it is
one of the few parts of the globe with a surplus due to a beetle infestation
that killed large swaths of trees that must now be harvested. Voracious U.S.
demand means beetle-killed wood in Europe could sell faster than expected,
though international shipping and U.S. trucking constraints limit supply chain
capabilities.
“The other markets are getting pulled up by the U.S.,” said
Geoff Berwick, vice president of business development at Atlantic Forest
Products.
Berwick has been importing lumber from Europe since 1999
and his job has never been easier, he said. Customers tell him: “Get me covered
and let me know what it’s going to cost.” Normally, prices are negotiated.
The buying power of lumber importers in the U.S. is
strengthened by home builders’ willingness to pay up, as project costs rise by
the hour on some days. The cost of lumber for the average U.S. house has
increased by nearly $36,000 over the last year, according to the National
Association of Home Builders.
The U.S. continues to buy the biggest share of its foreign
forest products from Canada, but imports from the European Union reached an
all-time high in 2020, nearly tripling 2019’s amount. The biggest jump from
European countries came from Sweden, which rose a dizzying 1,300%. Imports from
Europe remained strong in the first three months of 2021, up 37% from the same
period a year ago, USDA Foreign Agricultural Service data show.
More
https://www.bloomberg.com/news/articles/2021-05-12/u-s-lumber-importers-are-driving-buying-mania-for-european-wood?srnd=premium-canada
The
infrastructure war between China and the United States is fuelling the
commodities rally Eric Reguly May 12, 2021
There are all sorts of wars, a shorthand term beloved by
politicians, economists and journalists. There is the trade war, the diplomatic
war, the new Cold War, the war against the pandemic.
Yet another one is on the horizon –
the infrastructure war – and it goes a long way to explain why commodity prices
are soaring, with some of them, including copper
The infrastructure war is as much
geopolitical as economic. It pits America against China, each of which is
trying to lock up the resources required to rebuild their infrastructure and ramp
up the transition to a clean economy cobalt
The problem for America and the rest
of the Western world is that China probably has a decade-long lead in securing
the supplies of these metals.
China, for instance, dominates
cobalt production in the Democratic Republic of Congo, source of three-quarters
of the world’s supply. It dominates nickel production in Indonesia, one of the
world’s biggest producers of that metal. It dominates the production of
bauxite, the main source of aluminum, in Guinea, which holds the world’s
biggest reserves of aluminum ores, and is an enormous player in the rich copper
belts of Chile and Peru.
The Chinese mining companies send
all those metals back to China, essentially removing them from the world
market. Everyone else has to compete for increasingly scarce supplies, driving
the price up.
Rising demand is hard to meet. Saudi
Arabia can dial oil production up and down on short notice. By definition,
mines operate at 100 per cent of capacity, or close to it. Boosting capacity
can take years, sometimes a decade or longer. The resource has to be found,
environmental studies have to be written and building permits secured. The mine
has to be built, sometimes the smelter too.
The scramble for commodities that are in short supply has
sent prices soaring. Last week, the Bloomberg Commodity Spot Index reached its
highest level in a decade after climbing 70 per cent since its pandemic low in
March, 2020. On Monday, copper went to a record US$10,747 a tonne, more than
double its pandemic low. On the same day, iron ore, the main steelmaking ingredient,
also went to a record high, reaching almost US$230 a tonne.
More
https://www.theglobeandmail.com/business/commentary/article-the-infrastructure-war-between-china-and-the-united-states-is-fuelling/
Continued inflation inevitably leads to catastrophe.
Ludwig von Mises
Covid-19 Corner This
section will continue until it becomes unneeded.
Virus Strain Behind Deadly India
Outbreak Detected in 44 Nations By Bhuma
Shrivastava 12 May 2021, 05:50 BST The more-infectious coronavirus driving a catastrophic
Covid-19 epidemic in India was detected in 44 countries, according to the World
Health Organization , which urged more studies to understand its severity
and propensity to cause reinfections.
The strain, identified in October, spawned three versions
-- B.1.617.1, B.1.617.2 and B.1.617.3 -- amid an unprecedented spike in
Covid-19 cases that made the South Asian country the site of world’s worst
coronavirus crisis.
Though there may be important differences among the three, the
available evidence is too limited to characterize them individually, the WHO
said in a report Tuesday. Any impacts on effectiveness
of vaccines or therapeutics remain uncertain, it said.
Early analysis suggests B.1.617.1 and B.1.617.2 have a
substantially higher growth rate than other circulating variants in India,
suggesting potential increased transmissibility. The strains rapidly appeared
in multiple countries, the WHO said.
The B.1.617 lineage is the fourth variant
of concern designated by the United Nations agency -- a label that marks it
as one of the most worrisome strains frustrating the global fight against the
pandemic.
The B.1.617 variants -- sometimes referred to as a “double
mutant ” because of two mutations in the strain’s spike protein -- stoked a
dramatic wave of Covid-19 cases in India that overwhelmed hospitals and crematoriums .
After reported daily infections dipped to fewer than 20,000 cases in early
March, the epidemic curve climbed almost exponentially to exceed 300,000 for
almost three weeks.
https://www.bloomberg.com/news/articles/2021-05-12/virus-strain-behind-deadly-india-outbreak-detected-in-44-nations?srnd=premium-europe
India hits another grim record as
WHO says it accounted for half of last week’s reported cases Published Wed, May 12 2021 2:46 AM EDT
India’s daily Covid-19 death toll
hit another record high on Wednesday, as the World Health Organization said the
country accounted for half the total reported cases in the world last week.
Health ministry data showed that at
least 4,205 people died over a 24-hour period — the largest single-day increase
in fatalities reported by the South Asian country since the pandemic began.
However, reports have suggested that the death toll in India is being
undercounted.
Total reported cases in India topped
23 million and more than 254,000 people have died.
The
World Health Organization said that India accounted for half of all cases
reported globally last week as well as 30% of global deaths.
India has reported more than 300,000 daily cases for 21
consecutive days. On Tuesday, however, the
health ministry said its data showed a net decline in the total active
cases over a 24-hour period for the first time in 61 days.
The second wave began around February and accelerated
through March and April after large crowds were allowed to gather, mostly
without masks, for religious festivals and election rallies in various parts of
the country.
India’s health-care system is under tremendous pressure due
to the spike in cases despite an inflow of international aid, including oxygen
concentrators, cylinders, and generation plants as well as anti-viral drug
Remdesivir.
---- In its latest weekly epidemiological update on the
pandemic, the U.N. health agency said it was observing “worrying trends” in
India’s neighboring countries, where cases are also rising.
For example, in Nepal, almost 50%
of all individuals tested for Covid-19 are reportedly infected as the
landlocked country struggles with a second wave. It is said to have run out of
vaccines as India suspended its exports in light of the situation at home.
More
https://www.cnbc.com/2021/05/12/india-covid-crisis-who-says-it-accounts-for-50percent-of-reported-cases-last-week.html
India’s Covid Catastrophe Shows
World the Danger of Complacency Governments around the world keep repeating the same mistakes.
In a country of 1.4 billion, the consequences are on a whole new scale.
12 May 2021, 05:01 BST
The snaking queue outside Maasaheb Meenatai Thackeray
Hospital terrified Mariselvan Thevar. More than 200 people were in line, sagging
in the heat as they coughed and wheezed. Some had come hoping to find a dose of
coronavirus vaccine, which remains a scarce
commodity in India
A 21-year-old engineering student with a tall, lean frame
and a patchy beard, Thevar thought he had little choice but to join the growing
crowd outside the hospital, a small public facility in suburban Mumbai. His
father, Kannan, had been ill for days. At 49, Kannan was far younger than the
people who, for most of the pandemic, have experienced the worst outcomes from
Covid‑19. Yet Thevar grew increasingly anxious as they waited to be seen; his
father was running a high fever, and even slight exertions left him breathless.
With just two overwhelmed doctors working, the hospital was allowing
only a trickle of patients to enter its doors. After 10 hours in the baking
sun, Thevar and his father were turned away. “The doctors were insisting
patients go home, citing a shortage of beds, on the assurance that they will
call them,” Thevar said. “They never call back.”
As the virus burns through India, this sense of futility and
fear has become commonplace. The country is reporting nearly 400,000 confirmed
infections and 4,000 deaths every day, tallies that are certain to be drastic
undercounts top
400,000 by mid-June
The crisis in India is horrific on its own terms, generating
misery and loss at an enormous scale. It also has worrisome
implications for the rest of the globe
More
https://www.bloomberg.com/news/features/2021-05-12/coronavirus-in-india-variant-and-deaths-spur-new-lockdowns-as-crisis-grows?srnd=coronavirus
Taiwan warns on rising COVID-19
risk, share market tumbles May
12, 2021 4:33 AM By Yimou Lee , Ben
Blanchard
TAIPEI
(Reuters) - Taiwan may raise its COVID-19 alert level in the “coming days”,
Health Minister Chen Shih-chung said on Wednesday, warning of an extremely
serious situation that sent the island’s stock market tanking.
On Tuesday, Taiwan announced plans
to restrict public gatherings as a result of a cluster of six new cases with no
clear infection source, an unusual outbreak for the island that had kept a
tight lid on community outbreaks.
Describing the situation as “very
serious”, Chen told parliament the level could be lifted a notch to three,
limiting gatherings to five people indoors and 10 outdoors, as well as closing
of non-essential businesses.
“If there is the slightest failure
in containment, then we will soon enter level three,” Chen said.
President Tsai Ing-wen called on
people not to panic, and said there were plenty of medical supplies.
“At this moment the challenge is
still severe. Please be alert and follow the guidelines. I believe we will be
able to overcome this challenge together,” she said at the headquarters of the
ruling Democratic Progressive Party.
Taiwan has done a great job in
curbing the virus and people should guard the country so its booming economy
can continue, Tsai added.
---- “If (the COVID-19
alert status) is raised to level three, a lot of businesses won’t be able to
operate, and at level four classes and offices will be closed,” said Yeason
Jung, an analyst at Capital Futures in Taiwan. “There are short-term panic
selling pressures emerging.”
----
The spectre of restrictions affecting semiconductor production was enough to
spook investors already nervous about selling pressure on tech shares, said
Khoon Goh, head of Asia research at ANZ Bank.
More
https://www.reuters.com/article/health-coronavirus-taiwan/update-3-taiwan-warns-on-rising-covid-19-risk-stocks-tank-idUSL1N2MZ05T
Next, some vaccine links
kindly sent along from a LIR reader in Canada. The links come from a most
informative update from Stanford Hospital in California.
World
Health Organization - Landscape of COVID-19 candidate vaccines . https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
NY
Times Coronavirus Vaccine Tracker . https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
Stanford
Website . https://racetoacure.stanford.edu/clinical-trials/132
Regulatory
Focus COVID-19 vaccine tracker . https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker
Some other useful Covid links.
Johns Hopkins Coronavirus
resource centre
https://coronavirus.jhu.edu/map.html
Rt Covid-19
https://rt.live/
Centers for Disease Control
Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
The Spectator
https://data.spectator.co.uk/city/national
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported.
Graphene key for novel hardware
security Date: May 10, 2021
Source: Penn State
Summary: As more private data is stored and shared
digitally, researchers are exploring new ways to protect data against attacks
from bad actors. Current silicon technology exploits microscopic differences
between computing components to create secure keys, but artificial intelligence
(AI) techniques can be used to predict these keys and gain access to data. Now,
researchers have designed a way to make the encrypted keys harder to crack.
Led by Saptarshi Das, assistant
professor of engineering science and mechanics, the researchers used graphene
-- a layer of carbon one atom thick -- to develop a novel low-power, scalable,
reconfigurable hardware security device with significant resilience to AI
attacks. They published their findings in Nature Electronics today (May
10).
"There has been more and more
breaching of private data recently," Das said. "We developed a new
hardware security device that could eventually be implemented to protect these
data across industries and sectors."
The device, called a physically
unclonable function (PUF), is the first demonstration of a graphene-based PUF,
according to the researchers. The physical and electrical properties of
graphene, as well as the fabrication process, make the novel PUF more
energy-efficient, scalable, and secure against AI attacks that pose a threat to
silicon PUFs.
The team first fabricated nearly
2,000 identical graphene transistors, which switch current on and off in a
circuit. Despite their structural similarity, the transistors' electrical
conductivity varied due to the inherent randomness arising from the production
process. While such variation is typically a drawback for electronic devices,
it's a desirable quality for a PUF not shared by silicon-based devices.
After the graphene transistors were
implemented into PUFs, the researchers modeled their characteristics to create
a simulation of 64 million graphene-based PUFs. To test the PUFs' security, Das
and his team used machine learning, a method that allows AI to study a system
and find new patterns. The researchers trained the AI with the graphene PUF
simulation data, testing to see if the AI could use this training to make
predictions about the encrypted data and reveal system insecurities.
"Neural networks are very good
at developing a model from a huge amount of data, even if humans are unable
to," Das said. "We found that AI could not develop a model, and it
was not possible for the encryption process to be learned."
This resistance to machine learning
attacks makes the PUF more secure because potential hackers could not use
breached data to reverse engineer a device for future exploitation, Das said.
Even if the key could be predicted, the graphene PUF could generate a new key
through a reconfiguration process requiring no additional hardware or
replacement of components.
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https://www.sciencedaily.com/releases/2021/05/210510171950.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+sciencedaily%2Fmatter_energy%2Fgraphene+%28Graphene+News+--+ScienceDaily%29
Inflation is always and everywhere a
monetary phenomenon in the sense that it is and can be produced only by a more
rapid increase in the quantity of money than in output.
Milton Friedman.
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