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Barcoo cross-posted this to the Engineer's forum. I don't really intend to continue this fight here, but if you are interested in Engineer's opinion, start a new thread in the Engineer's Forum:
http://boards.fool.com/Messages.asp?bid=115202

Short answer - these guys should know better. They are being misleading when they say this engine is more than 500% efficient.

The measurement of engine efficency is how efficently an engine turns power input into power output. When considering engine efficiency, you have to consider ALL the power inputs, and only consider applied power as the output. For instance, your car's power inputs are the battery, the gasoline, and sometimes gravity (the car will move without gas if it is going downhill). The output is only work that moves the car forward. Even though you may appreciate the heater during the winter, heat loss from a car engine in not power output, but power lost in the conversion process.

This is a bit different than the way these guys are defining efficency. They are using some measure of electricity in vs. electricity out. This is a lot like saying your car is an amazingly efficient device because it only needs the little spark of electricity when you turn the ignition switch. When you say that, you are ignoring the larger energy source, the gasoline in the gas tank.

So, what energy source are these guys ignoring? Probably the stored energy in the magnets. As their engine runs, it will use up the energy in the magnets, which will eventually run out. You can recharge magnets, but it requires a higher input of electrical energy - magnets get hotter as you recharge them, and that heat is waste from the conversion process. At best, these guys are producing a magnetic "battery" which requires an electric starter and will eventually run out - not a bad thing in itself, if the parts can be reused or recycled better than standard batteries. At worst, they are manipulating the investing public's ignorance for financial gain.

Here's a site where some sceptics discuss the claims:
http://www.abc.net.au/science/k2/stn/q&a/notes/010329-1.htm

Remember, Thermodynamics isn't a choice, it's the law.
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