What We’re Reading (Week Ending 06 November 2022) - 06 Nov 2022
Reading helps us learn about the world and it is a really important aspect of investing. The legendary Charlie Munger even goes so far as to say that “I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading.” We (the co-founders of Compounder Fund) read widely across a range of topics, including investing, business, technology, and the world in general. We want to regularly share the best articles we’ve come across recently. Here they are (for the week ending 06 November 2022):
1. Nuclear energy: past, present and future – Julia DeWahl
Nuclear energy’s reputation has been dealt several major blows by the nuclear disasters of Three Mile Island (1979), Chernobyl (1986), and Fukushima (2011). Overblown response and media coverage to each of these events led to a vast misunderstanding of what happened at these events, and how damaging they actually were.
The accident at Three Mile Island in 1979, for example, killed a total of zero (0) people. The incident released negligible amounts of radioactivity — the estimated dose of radioactivity experienced in the local area is equivalent to ⅙ of the amount you’d get with a chest x-ray, and far below the level of background radiation typically experienced in a year.
However, the dramatic evacuation response, permanent shutdown of the reactor, and lack of clarification or attempts to accurately report what actually happened means many Americans still believe Three Mile Island to be a true “disaster” and reason to ban nuclear power plants. It didn’t help that Jane Fonda’s film China Syndrome, depicting a horrific nuclear meltdown, had debuted 12 days earlier.
Two other accidents, Chernobyl in 1986 and Fukushima in 2011, are similarly misunderstood, and Fukushima in particular, blown quite out of proportion. Chernobyl was operating without today’s safety standards. The plant didn’t have a containment dome, which would have helped to prevent the escape of radioactivity. Even more shocking is what caused the accident: the operating team was running an “experiment” that involved switching off automatic safety mechanisms and simulating an emergency. They did this without training or planning. The initial steam explosion killed 3, while 28 firefighters died from acute radiation syndrome (ARS). 15 died from thyroid cancer in the first 25 years after the accident.
The nuclear plant Fukushima Daichi suffered a meltdown from the flooding induced by the tsunami, however only 0 or 1 people died from the accident, with far more damage and loss of life caused by the overblown evacuation response to the accident. The earthquake that caused the tsunami that led to the Fukushima meltdown was the largest in its recorded history, leading to over 15,000 deaths and a massive toll on the built environment of Japan, including many industrial areas.
Despite these accidents, when compared to other industries, nuclear energy is very safe…
…Nuclear waste’s biggest problem is the prevailing belief that it is dangerous. Unlike other energy industries, nuclear takes full responsibility for its waste, also known as spent fuel, keeping it contained and secure so it doesn’t impact the environment. Nuclear fuel, as well as its waste, is also tiny in volume. All of the nuclear waste in the US could fit on a football field, stacked less than 10 yards high.
In addition, spent fuel can be recycled and used again as fuel in reactors. Regulation that stemmed from anti-nuclear weapons activism currently prevents the recycling of nuclear fuel in the United States, however the Department of Energy is supporting new reactor demonstrations that use recycled fuel, a positive sign that we may see things change here.
Finally, spent fuel has a perfect safety record — it has never killed or injured anyone and is safely contained on site at power plants. Air pollution from burning fossil fuels, for example, kills a million people prematurely each year worldwide.⁴ Solar panels produce 300x more toxic waste per unit of energy than nuclear, without any requirement to safely store this waste. Solar panels are therefore starting to end up in landfills, risking leaching toxic chemicals into groundwater…
…Nuclear is far safer than fossil fuels, particularly coal, and on par with renewables in terms of deaths per GW of power produced. Coal emits particulate matter that shortens lives, and deaths from fossil fuel accidents, e.g. natural gas pipeline explosions, far outnumber those of nuclear (as well as wind and solar, both also very safe). There have been no deaths in the US from commercial nuclear power, and relatively few abroad, especially when compared to other energy sources.
Nuclear energy can be produced in a very small footprint; a typical plant requires only about a square mile. In contrast, to produce the same amount of energy, wind requires 260–360x the amount of land, and solar requires 45–75x the amount of land.⁶ With such a small footprint, nuclear energy leaves a lot more land open for other purposes, including conservation.
2. TIP488: Current Market Conditions w/ Richard Duncan– Trey Lockerbie and Richard Duncan
Trey Lockerbie (00:25:23):
Yeah. That yield curve control in Japan, it seems like inevitable, and a lot of other parts of the world. In your most recent book, we were talking about it in our last episode in March, it was episode 424 for those who want to go back and check that out, you wrote that if the Fed were a corporation, it would be the most profitable corporation in the world, even leading Apple by $30 billion, give or take. And we discussed how the Fed actually makes money. The Fed basically creates money, buys bonds or mortgage backed securities and earns the interest with relatively low overhead. It’s around $8 billion or so, mostly paying probably economists. And in September, the Fed’s net income has, for the first time ever, turned negative. So can you describe exactly what’s going on here and the change with the Fed?
Richard Duncan (00:26:14):
Okay. Well, this takes some explanation. Let me begin by saying that when we spoke in February, the data for last year was not yet available. So when I said the Fed, if it had been a corporation, it would be the most profitable in the world, that was for 2020 data. That year, in 2020, the Fed’s profits were $87 billion. And the Fed is required to hand over all of its profits to the government. So that year, the Fed’s profits reduced the US budget deficit by $87 billion. Last year, the data now is available for 2021, the profits were much higher than they were the year before. Last year, the Fed’s profits were $107 billion that it handed over to the US Treasury Department, reducing the budget deficit last year by $107 billion.
(00:27:01):
So how this works, as you mentioned, the Fed creates money essentially at no cost to itself, and it buys bonds in order to pump money into the financial markets. Since those bonds pay interest to the Fed, the Fed has a lot of interest income. And since it created the money that it used to buy those bonds for free, it has very little interest expense thus far. And so with a lot of interest income and little interest expense, that’s where all the profits come from. Now, what has changed is when the Fed creates money, it does this by, it buys a bond, for example, from a bank, and it pays for that bond by making a deposit into that bank’s account at the Federal Reserve. All the banks have a bank account at the Fed. And so when the Fed buys a bond from J.P. Morgan, for example, it’s simply deposits money into J.P. Morgan’s bank account, money that it has created. It is not money that existed before. And that expands the amount of money in J.P. Morgan’s bank account at the Fed. In other words, it expands J.P. Morgan’s bank reserves.
(00:28:10):
Now, what’s happening is bank reserves, because the Fed has created so much money through quantitative easing, starting in 2008, the Fed has created something like… Well, at the end of 2007, the Fed’s total assets were, let’s say, $1 trillion, a little less than a trillion dollars. At the peak, a few months ago, they had increased to $9 trillion. So between 2008 and now, the Fed’s assets had increased by $8 trillion, meaning the Fed had created eight trillion new dollars, and money that it pumped into the financial system, into the banking system, causing bank reserves to expand. Now, there is massive excess supply of bank reserves. People become very confused about what bank reserves are, and it is really a bit difficult to get your mind around it. But on the other hand, it’s not as complicated as you think.
(00:29:03):
Bank reserves, they’re just money. The money gets transferred around the banking system now electronically. And it becomes very confusing when you think about these digits moving around the banking system and from the banks to loans, and the banks might buy bonds or might make investments in stocks. It all becomes very confusing. But if you think of these bank reserves as just dollar bills and follow where the dollar bills are going, or think of them even, to make it more dramatic, think of this as pennies. Just imagine these mountains of pennies that the Fed is creating and just watch where the pennies move. It’s the same. Bank reserves are the same as dollars, or pennies, or anything you want to look at it. When the Fed creates bank reserves, those bank reserves are not going to go away until the Fed destroys them with quantitative tightening.
(00:29:56):
So for example, the Fed may buy a billion dollars of bonds from J.P. Morgan and deposit a billion dollars into J.P. Morgan’s bank reserves. Now, J.P. Morgan can do anything with those bank reserves that it wants. Those reserves are money. So it could lend that billion dollars to Trey Lockerbie. But Trey Lockerbie is not going to keep the billion dollars worth of pennies in his backyard. That would be ridiculous. He’s going to deposit them in his bank, Goldman Sachs, for instance, perhaps. And then so the bank reserves move to Goldman Sachs. They don’t disappear. They’re not going to disappear no matter how much the banks lend or no matter what they do with those bank reserves. They could buy a building with it. They could buy pork bellies. The banks, just because the reserves move around, they don’t disappear, and they’re never going to disappear until the Fed destroys them through quantitative tightening, which the Fed is now doing.
(00:30:48):
Now, so in the past, making a long story even longer, in the past, the way the Fed controlled interest rates, the federal funds rate, there didn’t used to be massive excess reserves. Banks were required to hold a certain portion of their deposits at the Fed, in their bank accounts at the Fed, as reserves to make sure that if suddenly their customers came knocking on the door asking for their deposits back then the banks would have enough reserves to pay the customers their deposit back so there wouldn’t be bank runs. Back in the 19th century sometime the legally required reserve ratio was as high as 20%. The banks were required to keep reserves of 20% at one point. Over time, this required reserve ratio fell and dropped and dropped and dropped. But so you get the idea. These bank reserves were legally mandated, and the banks didn’t keep excess reserves if they didn’t have to. And so reserves were always scarce, and the Fed was able to manage the federal funds rate by making relatively small adjustments in reserve balances.
(00:31:55):
So for example, if it wanted interest rates to go down, then it would buy some bonds from the banking system. And when it buys bonds, it would inject new reserves into the banking system. So that would increase the amount of bank reserves, and that would make bank reserves more plentiful. And so the cost of borrowing reserves would drop. And conversely, if it wanted interest rates to move higher, the Fed would sell some of the bonds that it already owed to a bank, and the bank would have to pay the Fed by transferring its bank reserves to the Fed. And that would make the reserves in the system more scarce, and that would make the federal funds rate move up.
(00:32:33):
So by banking relatively small changes in its open market purchases and sales, in other words, by just selling a relatively small amount of bonds or buying a relatively small amount of bonds, it could change the supply and demand dynamic in the market for federal funds, affecting the federal funds rate. And that’s how the Fed moved up and down the federal funds rate, by small adjustments in making bank reserves more plentiful or more scarce. But after 2008, that doesn’t work anymore because the overall level of bank reserves in the system are not scarce anymore. They’re super abundant. The Fed has effectively created eight trillion extra dollars that are floating around in the financial system. So now the banks have massive excess reserves, any way you look at it. And the only way to get rid of the excess reserves would be for the Fed to entirely reverse all of the money creation that it’s done over the last 14 years, and that’s not going to happen.
(00:33:31):
So the Fed has had to create a new way to control the federal funds rate, and now the way they control the federal funds rate is entirely different than the way they controlled it in the past. Now they control it by paying interest on bank reserves. So before the Fed started hiking interest rates in March, the federal funds rate was about 25 basis points. And so the Fed paid the banks 25 basis points on their bank reserves so that the banks wouldn’t lend money at less than 25 basis points. Why would the banks lend money to anybody else at less than 25 basis points when they can earn 25 basis points interest from the Fed? Well, now every time the federal funds rate moves up, the Fed makes it move up by paying a higher interest rate on bank reserves. So now that the federal funds rate is at a range between three and three and a quarter percent, the Fed’s currently paying 3.1% on all the bank reserves held by the banks, and, therefore, that’s why the banks won’t lend any money at less than 3.1%.
(00:34:33):
That’s how the Fed is moving up the interest rates. If the Fed didn’t pay interest on these bank reserves, then there’s so many reserves, the banks, there’s excess supply of reserves, so that would put downward pressure on interest rates and the Fed would be unable to push interest rates higher. It would be unable to tighten monetary policy to fight inflation. But by this new policy that they introduced in 2008 of paying interest on bank reserves for the first time ever… Before 2008, it was not legal for them to do this. This is how they make the interest rates go up now. So if they increase the federal fund rate by a further 75 basis points in November, then they’ll start paying something like 3.8% on bank reserves and so on and so forth.
(00:35:18):
So suddenly, the whole dynamic has changed. Before, until very recently when the federal fund rate was very close to zero, the Fed didn’t have to pay any interest on bank reserves or on the money that it created, and so all of its interest income was pure profit. But now it still has the same amount of interest income, but the problem is it’s now paying a lot of interest on bank reserves. And so paying 3% interest on all of these bank reserves suddenly means that the Fed has a very high level of interest expense. And apparently, as you mentioned in September, if their net profit turned negative in September, it is because their interest expense, 3% on bank reserves, is greater than their interest income on all of the bonds that they own. And so it’s possible now that it seems likely that for this full year they’ll probably still have a profit, but for next year they will probably make a loss.
(00:36:12):
But of course, you’ve got to keep in mind that the Fed doesn’t have a lot of capital, and it doesn’t have a lot of capital because it gives all of its profits to the government every year. As I think I mentioned earlier, since the Fed was created, it has given the government $1.8 trillion. And just since 2008, most of that has come since 2008 when they started quantitative easing. The Fed has given the government $1 trillion since 2008. If it were a normal bank, all of that would have been in their capital account. But now they don’t have very much capital because they have to give all their profits to the government. So they’re going to make a loss. If they have a loss, they’ll have negative capital. But I don’t think that’s a particularly pertinent issue.
Trey Lockerbie (00:36:53):
It’s not, because I guess my question around that, to your point, was who is the lender to the Fed, right? As far as they run a deficit now, how are they covering that deficit?
Richard Duncan (00:37:05):
So the Fed, of course, can create as much money as it needs, and in the future it will revert to a position where it once again has more interest income than interest expense, assuming that one day interest rates go back down. I think for much of the money the Fed has extended through its quantitative easing programs is guaranteed by the government. So the government debt, instead of being lowered by government profits as it has been practically every year since 1913, the government debt going forward for the next couple of years will probably be higher as a result of the Fed’s losses.
Trey Lockerbie (00:37:45):
Is IOER, the interest on excess reserves, basically the technical term for what you were describing there?
Richard Duncan (00:37:52):
So things become even more complicated because, yes, it is, but in addition to bank reserves, bank reserves are on the Fed’s… They’re liabilities. But suddenly there’s a new big item on the Fed’s liability side that didn’t exist very long ago, and that is reverse repurchase agreements. And rather than that, so banks have bank accounts at the Fed, and that’s where they keep their bank reserves. Suddenly, over the last couple of decades, money market mutual funds have become a big new thing, relatively speaking, over the last couple of decades. And these money market mutual funds also need some place to make a profit. They’ve got, I think, last I looked, nearly $5 trillion of assets. And so this forced the Fed to allow them essentially to all have bank accounts at the Fed also in the form of reverse repurchase agreements. It’s essentially the same thing as bank reserves, except reverse repurchase agreements are where the money market mutual funds can park their money, and they will also be paid 3% interest right now since that’s where the federal funds rate is. And that will prevent them from lending to anyone at less than 3%.
(00:39:04):
So the Fed now has to pay interest on not only bank reserves but on what are effectively the reserves of the money market mutual funds. It has to pay interest on both of these. Bank reserves are around $3 trillion, and money market mutual funds have about $2.2 trillion at the Fed. So, that’s something like $5.2 trillion that the Fed is now paying interest on, and that is why their interest expenses shot up, and that’s why their profits have dropped from over 100 billion last year to probably a negative number next year. Now, this is a real issue that I think there is a solution to. There is no reason for the Fed to be paying interest on bank reserves because the banks didn’t do anything to earn those reserves. They didn’t make loans, they didn’t speculate in pork bellies, they didn’t nothing whatsoever to earn those reserves.
(00:39:56):
The Fed’s action created those reserves by creating money and depositing that money into the bank’s reserve accounts. That money is a pure function of the Fed policy, nothing whatsoever to do with what the banks have done. And so all of the profits the banks are earning on this 3% interest payment from the Fed, it’s pure windfall profits which they do not deserve. And therefore, there’s a way to resolve this, right? Over time, I mentioned in the 19th century, the legal required reserve ratio was 20% at some points in some banks, in some cities. But over time in the US, the Fed continued to reduce the required reserve ratio year after year after year after year. And the more it reduced the required reserve ratio that made the money multiplier expand. This may be a bit technical, but through the process of fractional reserve banking, the money multiplier is one divided by the required reserve ratio. And what that means is if the required reserve ratio is 10%, one divided by 10% is 10 times, and that’s the money multiplier.
(00:41:05):
What that means is for every new deposit that enters the banking system, they can effectively create 10 times that much money through lending and relending and relending that deposit. But over time, the Fed reduced the required reserve ratio again and again and again until it was really in the low single digits. And then in 2020, they reduced it to zero. So there’s no longer any required reserve ratio whatsoever for the United States, meaning that the money multiplier is infinity. The only constraint on how much the banks can create now in money is their reality that if they lend too much, the people they lend to won’t be able to afford to pay the interest on the money that they’ve borrowed.
(00:41:45):
So the solution to this problem of the Fed having to pay such high interest rates is the Fed should just simply reimpose a required reserve ratio on the banks that is high enough to absorb all of their reserves until there are no more excess reserves left. So right now, the required reserves are calculated by the amount of reserves the banks have as a percentage of the banks’ deposits. The required reserve ratio is how much reserves the banks have as a percent of their bank deposits. In the past, they were required to keep a reserve against their deposits. Right now, their amount of reserves relative to their amount of deposits is about 16%. Right now, the required reserve ratio is 0%, and the Fed is having to pay 3% interest on all of these reserves.
(00:42:33):
So what the government should do is increase the required reserve ratio from 0% to 16%, absorbing all of these excess reserves so that we would once again be back in the situation where we were before 2008, where reserves were scarce and the Fed was able to control the federal fund rate by making relatively small changes in its bond purchases and bond sales, so we could revert to the old system of having a required reserve ratio. Then, since the banks would be required to keep 16% of all of their deposits as reserves, then it wouldn’t be necessary for the Fed to pay interest on the reserves anymore because the banks would be required to keep these reserves. There would be no need to pay them for them. And in that case, the Fed would become immensely profitable again.
(00:43:21):
So this is what the government should do is reimpose very significantly higher required reserve ratio to absorb all of these excess reserves. That would immediately restore the Fed’s profitability, and it would ensure that all of the Fed’s profits go to the government, which is, in other words, go to the US taxpayers rather than ending up as windfall profits to the banks who’ve done nothing whatsoever to earn them.
3. What to Do When You Know What Stocks Will Do Next – Jason Zweig
Imagine you could know tomorrow’s news today. Would that make you a better investor?
On Oct. 13, the Labor Department announced the consumer-price index rose 8.2% in September from the same month a year earlier, dashing hopes that inflation would drop.
What if you had known, on Oct. 12, exactly what would be in the next morning’s inflation report? You’d have bet stocks would tank, with a skittish market certain to panic on the news. You’d never have guessed what happened next.
After nosediving 2% when the market opened that morning, stocks turned around almost instantly, shooting up to close nearly 3% higher, one of the biggest intraday swings on record. In fact, U.S. stocks have risen roughly 9% since their low on the morning of Oct. 13.
Maybe people decided the bad news wasn’t bad enough to make the Federal Reserve raise interest rates even more than the 0.75 percentage point already considered inevitable at its November meeting. Maybe they felt the bad news was less bad than their worst fears.
Who knows? What we can know is that even possessing tomorrow’s news today wouldn’t assure you of being able to make a profitable trade. That’s why it’s so important to stick to a long-term plan rather than chasing the latest illusion of certainty.
One of Wall Street’s favorite sayings is that investors hate uncertainty. What they should hate, instead, is certainty.
4. Modern Meditations: Ann Miura-Ko – Mario Gabriele and Ann Miura-Ko
2. Which current or historical figure has most impacted your thinking?
That’s easy: David Swensen. He led Yale’s endowment for 36 years and was a mentor of mine. Not only did he influence my professional life, but he impacted how I think about things.
First of all, he was such an original thinker. When he arrived at Yale, as this young guy from Wall Street, no one saw endowments as anything more than a pool of money. David invented portfolio management and invested in illiquid and risky asset classes like venture capital which are higher beta but led to transformational returns over many decades. Those insights and many others changed how institutions oversee their money. Many of today’s endowments and foundations operate according to the Swensen philosophy.
Beyond his incredible professional accomplishments, I was even more influenced by the person he was.
David was a remarkable mentor to people from different backgrounds. He cared about diversity long before it was popular to care. David was always mentoring women and minorities because he believed it was the right thing to do and because he derived great joy from it. This started in his office with the people who worked with him and extended to the managers of funds he entrusted the endowment to.
Finally, David demonstrated it was possible to be professionally successful and a dedicated parent. A friend told one such story at his memorial. David coached his son’s Little League team for years and with incredible gusto. One day there was a Wall Street Journal article on David and the Yale endowment. A parent showed this article to a young seven-year-old teammate. The kid burst into tears and said, “Does this mean Coach Dave got another job?”…
…8. What contemporary practice will our descendants judge us for most?
We’ve forgotten how to criticize our institutions from a place of love. So much of the discourse today is defined by disgust or hatred. We see something broken and want to annihilate it instead of trying to fix it. Not only do I think that’s a shame, but it also doesn’t feel effective. Would you ever listen to feedback from someone that hated you?
I read a biography of Abraham Lincoln recently. Lincoln thought it was important for schools to teach a love for America’s institutions. I think that’s missing today. We must impart that love to our children – to re-learn admiration for imperfect things and even people. Then, we can engage with them from a place of discovery and optimism.
9. What risk are we radically underestimating as a species?
Cyber warfare. It’s not well understood, and possible solutions are incredibly under-resourced.
I saw this threat develop during my Ph.D. Between 2003 and 2010, bad actors went from vandalizing websites to nation-state-level warfare. I still don’t think America has adapted more than a decade later. From a budgetary and infrastructural standpoint, we don’t have what we need, which puts us in incredible danger. It’s an area of risk the general public doesn’t consider because it is so invisible.
The primary challenge in this space is talent. We simply aren’t training enough people.
5. No Grand Strategy: The Complete Financial History of Berkshire Hathaway – Frederik Gieschen
Consider its unlikely origins. Buffett, brilliant as he was, got himself into the driver’s seat out of spite. Cigar butt investments, as Berkshire was, are there to be picked up, smoked, and discarded. Buffett intended to exit the stock through a tender offer before Seabury Stanton, Berkshire’s CEO, tried to short-change him by 12 ½ cents. In that moment, the otherwise calculating and rational Buffett made an emotional decision.
Instead of moving on to the next stock, he stuck around. He committed. I find it utterly relatable that he took it personally, that he got triggered into taking control of a basket case of a company. He was going to show people how to build a great business. It’s a testament to his abilities and what Adam described as “patient opportunism” that Berkshire turned out the way it did.
“Building Berkshire was an exercise in patience combined with opportunism and a reminder that opportunity cost matters. There was no grand strategy.”
It also reflected the initial conditions in which Buffett and Munger operated, including having the “good fortune to observe what worked and what didn’t” at the previous generation of conglomerates. “These lessons were then applied to their canvas at Berkshire to create a masterpiece.”
“Warren Buffett and Charlie Munger were born at the right time to fill their sails, and that of their conglomerate, with incredible tailwinds. They were lucky to begin solidifying Berkshire’s economic position when market inefficiencies were much more prevalent.”
There was no grand plan and small mistakes turned out to be the stepping stones on the way to great success.
“Mistakes in capital allocation, such as the losses experienced in Florida and Texas in Berkshire’s Insurance Group, do happen. The key is making sure bad investments don’t put the larger enterprise at risk, learning lessons from those mistakes, and communicating candidly with shareholders about them.”
However, Berkshire under Buffett was never truly in peril. Buffett carefully created structures that ensured survival. There’s a lesson in that, too.
“[Buffett] wrote that Berkshire probably could have increased the 23.8% compounded annual return it had achieved by borrowing more money, but he was uncomfortable with even a 1% chance of failure. Even at 99:1 odds, he and Munger would not have been comfortable with the risks.”
“Charlie and I have never been in a big hurry: We enjoy the process far more than the proceeds—though we have learned to live with those also.”
6. Weekly Special – An Overview of RNA Technologies – BioCompounding
RNA technologies made headlines in 2021 when the first mRNA-based COVID-19 vaccine was approved in December 2020.
However, RNA therapy is not a new technology. RNA modalities have been under development for several decades and by Jan 2020, the U.S Food and Drug Administration (FDA) had approved a total of eleven RNA drugs, and that has increased to sixteen approved RNA therapeutics by March 2022. In addition, there are approximately another 29 RNA therapies in clinical trials as of March 2022.
The first use case of RNA as therapeutics was demonstrated in the late 1970s, Zamecnik & Stephenson demonstrated the potential of RNA antisense oligonucleotide (ASO) therapy. The duo showed that the synthesized ASOs were able to inhibit Rous sarcoma virus replication, by inhibiting viral protein translation. This was followed by the use of mRNAs for protein expression, RNAi for translation inhibition, and further developments in other formats…
…Most RNA therapies can be sorted into one of three broad categories (See image below for visuals):
1) those that target nucleic acids (either DNA or RNA), which can be further divided into two distinct types of therapies: a. Single-stranded antisense oligonucleotides (ASOs) and; b. Double-stranded molecules that operate through a cellular pathway known as RNA interference (RNAi)
2) those that target proteins (aptamers), and
3) those that encode proteins (mRNA).
Also, hybrid approaches that combine several RNA-based mechanisms into a single package are emerging…
…Some of the key challenges that had to be addressed to make RNAs therapeutically viable as a treatment modality are as follows:
1) nucleic acids are negatively charged and do not passively cross the hydrophobic lipid barrier of the cell.
2) exogenous RNAs are degraded rapidly by RNases once they are injected into the host.
3) some exogenous RNAs cause an immune response that hampers the translation of the target protein or causes the development of a toxic cell environment
4) The short half-life of RNA.
Luckily, scientists over the past couple of decades have substantially overcome these barriers with the use of many unique delivery methods, such as nanoparticles that protect the RNA and enable cell-specific delivery of the therapeutic agent.
On the half life front, scientist initially improved the stability and half-life through a RNA modification called pseudouridine, whish replaces uridine. It is demonstrated that pseudouridine can enhance RNA stability also decrease anti-RNA immune response. As further improvements in half-life are required scientists are innovating to further improve the half-life of RNA therapeutics specifically mRNA therapeutics, read more here.
7. Hyperinflation in the Roman Empire and its Influence on the Collapse of Rome – Mark
Lasting for more than 100 years and classified as the world’s longest-lasting empire, the Roman Empire was a political, economic, and technological powerhouse. According to legend, the famous Empire was founded in 753 BC by the two twin sons, Romulus and Remus, of Mars (the god of war). The Roman Empire persisted for well over a thousand years, although it had its ups and downs.
The Pax Romana (which translates to “Roman Peace”) was a period spanning two centuries, starting from 27 B.C.E all the way to 180 C.E. The Pax Romana was essentially the Roman version of the American “Era of Good Feelings.” The two-hundred-year epoch in Roman history was a period of relative peace, minimal war, technological progression, and economic prosperity, under the governance of famous Roman emperors like Augustus (63 B.C.E. — 14 C.E.), and the stoic Marcus Aurelius (121 C.E. — 180 C.E.)
However, despite the Pax Romana era of prosperity and peace in the Roman empire, the following centuries leading up to the collapse of the Roman Empire would be plagued with disaster. One aspect we will be exploring and analyzing in this article is the role of hyperinflation in Rome and how it exacerbated the collapse of the Roman Empire.
Rome’s economic struggles began with problems of its regional currency, the Roman Denarius. The silver Denarius was implemented and produced as the national currency of Rome starting as early as 211 B.C.E., minted all the way until the middle of the third century C.E. until it was replaced by the Antoninianus, a temporary currency instated by Roman Emperor Caracalla (188 C.E. — 217 C.E.) to help curb the hyperinflation of the silver Denarius.
Around the size of a nickel, the Roman Denarius was approximately worth a day’s wages for a craftsman in Rome. The coins were initially minted with 4.5 grams of pure silver (this is considered high purity.) Initially, the value of the Denarius was not based on consumers’ confidence in the Roman government or some gold reserves located who knows where. The currency was backed by itself — meaning that the value of the Denarius was based on the value of the silver used to mint that coin.
Because of a finite supply of silver and precious metals entering the Empire, Roman economic activity was limited to the number of denarii in circulation. Because there was a small circulation of denarii in the beginning decades of its conception, the Denarius could not successfully be used as a medium of exchange or currency, because there just wasn’t enough of the currency to go around. This problem was an especially hard pill for the Roman Emperors to swallow, as they could not finance their “pet projects” (wars, newly constructed amphitheaters, circuses, etc.) with the small circulation of denarii in the Empire.
Disclaimer: None of the information or analysis presented is intended to form the basis for any offer or recommendation. We currently do not have a vested interest in any companies mentioned. Holdings are subject to change at any time.
