The U.S. government and various intelligence agencies are now using a technology that has been used to anticipate floods, terrorist attacks, stock market moves, and political elections (in some cases down to the exact time and location). Now, thousands of businesses and Fortune 500 corporations are paying billions to access it. Investors could make a fortune from what McKinsey Global calls "the next frontier for innovation, competition, and productivity."

Dear Reader,

The CIA has funded and helped to advance a "machine" that some believe has accomplished the impossible – providing rare glimpses into the future.

As crazy as it sounds, the Technology Review said this "machine" finds" hints of what will happen in the future," and also calls it a "predictive engine." Another well-known science journal calls it a "future-predicting… engine."

One researcher involved said it’s possible for him to use this machine to identify "product releases expected from [big tech companies] in the near future, or to identify when a company plans to invest or expand… "

At Stansberry & Associates, we prefer to err on the side of being more skeptical of these sorts of claims. We don’t like the word "predicting," and we’ve witnessed countless new "revolutionary" technologies disappear from the absurdity of their own broken promises.

In that case what we’re calling "the future machine" is a frame of reference…

But if only half of what folks have been saying about this "machine" is true, then this breakthrough could be worth billions of dollars… and return tens to hundreds of thousands of dollars to investors who play this trend intelligently.

So we set out to investigate—we travelled to the DC Beltway to examine a Google and Intelligence community funded firm which is one of the pioneers behind this "future machine." We spoke with over a dozen experts and business leaders. And we examined the technology behind this "future machine" with our own eyes.

In short, we believe this technology may be the closest we’ve ever come to being able to provide legitimate clues about future events.

Let me illustrate how this "machine" works with just one example…

On, January 12, 2010, a "future machine" located in Virginia indicated that the country of Yemen was likely headed for disaster. The following is a written transcription of the data:

Approximately five months later, over 100 people died in the worst floods to hit the Yemeni capital in over a decade. Yemen’s President, halved income tax and ordered the government to control the prices of basic commodities to combat food shortages in the country. By late January 2011, thousands of Yemeni protesters took the streets to demand Saleh’s resignation. The clashes resulted in 45 deaths, a new battle with Al-Qaeda, and over 10,000 protesters rioting in the capital city of Suna.

Hard to believe, I know… that such a specific chain of events could be identified five months into the future.

It’s no wonder Forbes calls the technology behind the "future machine" "a game-changer with big rewards for organizations that embrace it."

As I mentioned, I was highly skeptical when I heard about this development as well… but when I found out the U.S. government and six federal agencies recently invested $200 million into this technology, I knew the "future machine" wasn’t just a hyped up gimmick or toy.

The White House Office of Science and Technology Policy (OSTP) has even gone on record saying this was "one of the most important public investments in technology since the rise of supercomputing and the Internet."

And as I dug deeper, I discovered America’s biggest academic centers – MIT, Brown University, Harvard University, and The National Institute of Standards and Technology (NIST)… they’re all pouring millions into studying and advancing this technology as well.

After all, just think… if we knew with 90% probability that the world would run out of oil in the year 2070 we could allocate a portion of the federal budget to developing substitute technologies that could be ready to be used by that time.

If we could foresee the demise of the U.S. Dollar down to the exact month and year it happens, how valuable would that information be for consumers and investors?

If we could accurately determine when and where our enemies will attack us next, we could save countless lives and better protect our soldiers and civilians from harm’s way.

This is why everyone from the Federal Government to small businesses want to get their hands on this technology. And now it is finally crossing over into the private sector, where the real growth lies for investors.

Amazon.com, IBM, Microsoft, and dozens of other businesses you’d recognize have either already gained access to a "future machine" or are attempting to use one.

Here’s one reason why…

In April 2012, an independent business technology firm called Avanade found that 73% of businesses who have gained access to this technology have already increased their revenue streams or have created entirely new sources of revenue as a direct result.

One firm has used a "future machine" to make accurate forecast of the stock market’s future. Had you started using their predictions to buy U.S. Stocks on January 1, 2009, you would have trounced the S&P average, making an annual return of 56%, which as you know even the best of the best money managers struggle to get close to.

Or consider this story about Target, one of America’s largest retail outlets. Earlier this year one of Target’s employees leaked to the press that the company has been using a "future machine" to determine which of its customers are in their early stages of pregnancy. In fact, earlier this year an angry man walked into a Minneapolis-area Target and told the manager his teenage daughter was getting coupons for baby clothes, nursery furniture, and diapers. The father said his daughter was not pregnant and told the manager to stop sending pregnancy-related coupons to his home.

As a courtesy, the manager called the father a few days later to apologize again. To the manager's surprise, the father eased his tone. After a long talk with his teenage daughter, he found out she was indeed pregnant.

Not only was Target able to determine that this teenage girl was pregnant... but it also forecasted what month the girl was likely to deliver her baby and began sending her coupons in advance.

One columnist for The New York Times says Target’s revenue growth from $44 billion in 2002 to $67 billion in 2010 was largely attributable to the company’s use of this technology to corner the baby-on-board market.

But here’s the thing…

The agencies and businesses now using "future machines" do not want the public to know about it. After all, if you knew that these powerful groups knew what you might be doing, buying, wearing, investing in… or even had plans on raising a family… well, I probably wouldn’t want to publicize it much either.

When Charles Duhigg of The New York Times published this story, Target refused to let him visit the company’s headquarters and went so far as to put him on a list of prohibited visitors.

And when author Ian Ayers similarly claimed that credit card companies now use "future machines" to forecast with 98% accuracy whether its customers will divorce based on their purchases, Visa issued a public statement denying that it monitored such data, saying the claim was "inaccurate and wrong."

There are obviously huge ethical implications involved here, but there’s also a ton of money at stake too, which is why these businesses and agencies are reluctant to broadcast how they’ve been using this forecasting technology to increase their revenue.

Bottom line, companies around the globe are in a huge arms race for what the U.S. government believes is one of the most important developments since the Internet. This technology is already being funded by some of the most important institutions in the world… like the CIA’s In-Q-Tel group, Amazon.com, the Federal Government, and Google, which has personally invested $10 million.

This is why this development is becoming every bit as big as cloud computing, RFID and other sector-crossing, disruptive technologies that have produced exponential returns for early investors.

Hundreds of groups are already involved in some aspect of this technology’s ascent – whether it’s paying to use it or coming up with new applications… And while there are more than a handful of firms who own patented rights to it, you’ll see in the presentation that follows why one in particular has staked the greatest claim and stands to make early adopters and investors the greatest fortune.

Let me explain…

My name is Frank Curzio. I’m the editor of Phase 1 Investor—a sophisticated research advisory that analyzes breakthrough technologies and the up and coming companies backing them.

Like any big breakthrough, the "future machine" is largely funded by big government – the only incubator with the kind of funding capable of breathing life into discoveries of this magnitude.

America’s Central Intelligence Agency (CIA) poured millions of dollars into its development. Several other federal agencies have managed to get in on the core technology including the Federal Government, Homeland Security and the Internal Revenue Service (IRS).

To learn more about the core technology behind this "future machine" I recently hired one of my co-workers to travel to Arlington, Virginia.

Located just southwest of Washington D.C., Arlington County is ranked second in the nation for the percentage of people ages 25-34 earning over $100,000 annually. The median house value is $559,000, which is 105% higher than the national average.

But what few people know about Arlington is that despite its immense wealth, it is also the mecca for U.S. intelligence jobs. From defense contractors and the U.S. department of labor to the U.S. Marshals service, and numerous satellite offices for the Pentagon… a large portion of Arlington’s local population works in the intelligence field. This is why a large part of downtown Arlington, or "Crystal City" as it’s locally known, is situated underground.

Even most of the buildings above ground are unmarked, like the one I sent my researcher to. Here’s a snapshot from the outside:

As you can see it looks like any typical office building. But on the 22nd floor of this unmarked building, a group of analysts led by a PhD scientist and former member of the Swedish Special Forces are using a "future machine" to accurately forecast everything from potential terrorist attacks and criminal acts, to stock market events and political results.

For example, you may have heard of Super Tuesday. It’s the day which sees the most delegates up for grabs in the Republican nominating process. This year it fell on March 6, 2012. There were around 12 candidates in total at the time. It was anyone’s guess who would win the GOP.

But on this day, their "future machine" had already forecasted Mitt Romney to be the clear winner of the race.

A year earlier, in May 2011 on the one-year anniversary of the infamous ‘flash crash,’ this machine even devised an investment strategy that would have returned 10.4% over a three month period, while the market lost 9.9% of its value during the same time span.

Perhaps now you can see why so many businesses, governments and other groups are looking to adapt and integrate this technology.

According to Forbes, the demand for the core technology behind this "future machine" is seemingly "insatiable."

So what exactly is this so called "future machine," who developed it, and how can you become an early investor and potentially make a fortune from it?

Let me explain…

Unlike the microprocessor or telephone, the "future machine" was not invented by a single person or group at a specific point in time. There’s no one standard prototype of this "machine" either.

The technology behind this "machine" represents an evolution of trends and technological advancements… and it’s tied closely to the proliferation of one trend in particular, which a lot of people are simply calling "Big Data."

And when I’m talking about a "future machine," I’m talking about all the software being used to process this "Big Data," much of which is being used to forecast events.
Let me explain...

In 2000 there were no smartphones, tablets, or e-readers. The world didn’t have Facebook, Pinterest, Twitter, Instagram, Flicker, LinkedIn, or any of the other social networking sites that have dominated popular culture. The Internet was primarily used for research. There were about 361 million users at the time.

Today, the Internet has become the world’s largest database for every piece of information imaginable… from news events, cultural trends, historical data, statistics, and even medical research. Around 2 billion people now use it. That’s more than a quarter of the world’s population.

And not only are there drastically more people using the Internet than ever before, but the amount of data being generated from Internet use is growing at an exponential rate.

Every time you go to a store, buy an item, send an email, a text message, perform a search on the web, use your cell phone, open a bank account, go to the movies, or even workout at the gym… you leave behind a trail of data along with hundreds of millions of other folks who are somehow connected to the digital world.

Just to give you an idea of how much data is out there… more than 750 million photos were uploaded to Facebook in a single weekend last year. There are about 250 million Tweets posted on Twitter each day. Google handles more than 1 billion searches per day – and has more than 620 million daily visitors.

According to IDC, one of the top tech research companies, the world's digital output was about 180 Exabyte’s in 2008. For perspective: If you digitally backed up all 126 million items in the Library of Congress, it still wouldn’t equal one Exabyte. In 2010, the world's digital output grew to 1,200 Exabyte’s. That's a 566% increase in four years. And based on the massive data coming online from social media, including pictures, music, and video... IDC predicts total data volume will reach 35,000 Exabyte’s in 2020. That's nearly a 29-fold increase in 10 years!

The "offline" world is also full of useful data. Cameras on traffic lights, highway tollbooths, and security-related systems record pictures and video constantly. Most delivery trucks (including ones owned by transportation giants UPS and FedEx) have GPS systems that transmit data back to the company's tech department.

Every time you use your credit card, your name is popping up in a massive database somewhere... along with how much money you spent, which items you bought, and maybe even a note about the weather at the time of your visit.

So what does all of this data have to do with forecasting the future?

Well, if you think of all this data and all of this data storage space as the hardware of a computer… then you can think of this "future machine" as the microprocessor, or the software.

In other words, there is so much data floating around hyperspace that unless you have an incredibly advanced, algorithmic technology to intelligently crunch, process, and extrapolate based on it… then that information is pretty much worthless.

The "future machine" is an engine… a highly sophisticated software that aggregates this data to measure, analyze, and ultimately forecast events based on a number of different variables and algorithms that are used to determine the probability of those events occurring.

For example, IBM is now using one of these machines to forecast traffic patterns and warn commuters via text about potential traffic jams before they get in their cars.

There’s also a group of engineers in San Francisco, known as Quid, who are using it to detect which trends in a given industry are ripe for innovation. They then direct venture capitalists towards the best opportunities. Microsoft currently pays this group $1 million a year.

Of course, this "future machine" didn’t just appear out of nowhere…

The seed of this technology was first planted in the mind of an English computer scientist and mathematician named Edgar Codd.

Back in the 1970s, Codd invented the computer database as a way of organizing data. But in 1989, a research analyst named Howard Dresner coined the term "business intelligence" as a method for analyzing stored data and using it to improve a business’s decision making process.

This was the first building block of the "future machine." Because now, for the first time, companies saw the value of data not only as a series of numbers and facts but as gateways to understanding patterns, trends, and behaviors that could be used to increase revenue, cut expenses, and forecast events. In 1999 this process became formally known as "predictive analytics."

Since the turn of the century, the idea of using the predictive power of the Internet to forecast events has gained extraordinary credence thanks to the onslaught of the Internet, social networking, and rapid advancements in advanced mathematics, micro processing and cloud computing.

These developments have allowed computer analysts to study, document, and develop mathematical algorithms that can be used to determine how likely an event will take place or what products consumers will buy. In 2008, for example, Google showed that measuring activity for different search queries could accurately predict the spread of flu in the U.S. up to two weeks before the federal Centers for Disease Control. Another recent study has shown Twitter to be 88.67% accurate in predicting the Dow Jones three days in advance.

In the past few years, this technology has advanced to the point where it’s crossing over into the private sector at a rapid pace. Notice how when you visit major online retailers like Amazon, Ebay, and Expedia you are prompted to buy products and services that may already interest you.

Or think about how your GPS system knows exactly how long it will take you to get to your given destination before you start driving. These are just a few examples but it is the core of this technology that has made all of these things possible.

So how much are businesses paying to utilize this technology?

• According to IDC companies will pay $16.9 billion by 2015, up from $3.2 billion in 2010.

• Wikibon, a worldwide community of practitioners and researchers, believes revenues will hit $50 billion by 2017.

• And Michael Chui, a senior fellow at consulting giant McKinsey Global, says it’s just impossible to come up with an estimate of how much the market is worth. "It’s just too big," he writes.

Right now there are literally tens of thousands of businesses around the globe who are making this technology a priority for 2012 and beyond.

Consider Trident Marketing, a sales firm for DirectTV, ADT, and Travel Resorts of America. Since Trident began using their future machine, the company has seen a 1,000% increase in revenue over a four year period.

"This technology is revolutionary and has helped our business grow its sales from $5 million to $53 million in four years," writes Tridents CEO. "We anticipate reaching $100 million in the next three years."

Or consider Syntel, Inc. (SYNT), a data processing company out of White Plains, New York. The company was founded in 1919. But since Syntel started using this prediction technology last year, the company’s stock has shot up as high as 60%.

Then there’s Lifetime Brands, Inc. (LCUT), a housewares company. Since they started using this technology in 2007, Lifetime has seen its shares rise as high as 800%.

The point is this technology has incredible moneymaking potential—for the companies using it, for the smart firms that are licensing it, and for early investors.