BALTIMORE, Maryland – The press reported mixed financial news yesterday.

House sales, oil, unemployment figures… up, down… the news left investors puzzled.

Stocks went mostly nowhere.

Erasing 200 Years of Growth

But amid the confusing noise was the sound of an alarm:

“Fall in U.S. productivity sparks fears of populist backlash as wages stagnate,” says a lumbering headline in the Financial Times.

Most financial news stories are remarkably free from any informational content. Not this one. The headline alone practically bursts at the seams with it.

First: (and here we pause, briefly, to thank the jackasses running the U.S. economy)… For the first time in more than three decades, productivity is falling. The Conference Board estimates the rate of productivity growth in the U.S. in 2016 at MINUS 0.2%.

This means that real wealth is walking backward… Our economy is getting poorer… and less productive.

What a remarkable achievement – reducing the value of human labor, in the world’s most advanced economy, after at least 200 years of vigorous growth!

Progress Comes to an End

We’ve explained in these Diary entries… The feds and Wall Street colluded to replace precious real savings with unlimited phony savings (credit-backed money). But when something is available in unlimited quantities, people squander it.

Instead, they squander it on share buybacks… speculation… zombie giveaways… crony contracts…

Real savings, capital formation, and investment – the kind that you need to boost productivity – go down.

Stanley Druckenmiller:

While the debt in the 1990s financed the construction of the Internet, most of the debt today has been used for financial engineering, not productive investments. Last year, buybacks and M&A were $2 trillion. All R&D and office equipment spending was $1.8 trillion. And the reckless behavior has grown in a non-linear fashion after eight years of free money.

Our heart skips a beat. At the end of the day, all we have is time. Twenty-four hours in a day. Seven days in a week. Time is not credit. You can’t stretch it. You can’t “stimulate” it… or create more of it. That’s all there is.

You could double the PhDs at the Fed. You could double the number of patents or the stock buybacks and high tech IPOs… still, the earth would spin at the exact same rate, and the sun would still come up earlier than you would probably like tomorrow.

Time is beyond the control of the Deep State, Congress, or the NSA.

The only hope of material progress is to get more output out of each unit of time. There’s no other way.

And if you can’t do that, you are dead in the water. If you get less output per unit of time… you are doomed to poverty.

That’s why this is the most important financial story you are likely to see this month… maybe this year… and maybe in your lifetime.

Material progress has come to an end… and if this trend continues, we will eventually be crawling around on all fours and howling at the moon.

Chasing the Moon

Not only that, our system of government is doomed, too. And our money…

We’ll take this up next week, but our advanced democracies depend on making promises now… and making good on them later.

This can only be done with additional output! No productivity increases (or worse, falling productivity), and the jig is up.

Why the calamitous drop in productivity? What does it mean for the future? The FT doesn’t seem to care. Instead, it draws our attention to the “populist backlash” that worked the paper’s Elitist-in-Chief, Martin Wolf, into such a lather earlier in the week.

All around the world, voters are losing faith in the elite. Austria was the latest country to give evidence of it, with the “populist” candidate, Norbert Hofer, barely defeated by the mainstream man.

And in the U.S., the latest polls show Hillary and Donald running neck and neck. Wolf considers this kind of “populism” a disease.

But it is not populism that infected productivity and endangered Western Civilization. It is the cancerous programs of the Deep State’s insiders.

“Wages stagnate,” continues the headline. That is the news we reported yesterday… the study of the Levy Institute, showing that for 9 out of 10 Americans, we have suffered FOUR LOST DECADES since the ‘70s. That is, their time is worth no more today than it was when the first astronauts landed on the moon.

In 1969, the U.S. could send men to the moon and bring them back. Now with productivity falling, the moon moves farther away.




Investing Insight

By Nick Giambruno, Editor, Crisis Investing

Crisis investing is basically buying elite companies in beaten-up countries or industries. When there’s a crisis, most people only see danger. But it’s actually an opportunity. A crisis often allows you to buy a dollar’s worth of assets for a dime… or less.

Many of the world’s greatest investors have made their fortunes this way… but anyone can do it. You don’t need be rich or well-connected. You don’t even need to travel to do it.

In fact, if you have a regular brokerage account – and the courage to buy when others are fearful – you’re all set.

The courage part is key. You can’t be a successful crisis investor if you’re not willing to go against the crowd.

I’m a contrarian by nature. I zig when others zag.

So naturally, I buy assets most people hate… Ideally, I want to buy at the moment of maximum pessimism.

Now, it’s impossible to identify exact bottoms… but there are ways to tell if a market is near a bottom…

The mass media can be a big help here. I steer clear of anything the financial media is in love with. On the other hand, scary headlines are often a clue that crisis bargains are available.

If a country or industry is getting nothing but bad press, it’s worth a look. It’s even better when a crisis makes the front page of world newspapers. That means most investors have given up. You can make a fortune buying these hated markets.

I like markets that are at the lowest level in a decade or more. You can find incredible opportunities there…

You see, in a crisis, all stocks plunge. This gives you the chance to buy sound, profitable, and well-run businesses for next to nothing.

Specifically, I look for markets that are at least 66% cheaper than their historic average.

Editor’s Note: Nick Giambruno and Doug Casey recently released an urgent video broadcast that reveals the full story behind the biggest threat to your investments right now. It’s a surprising message that may offend you – but if you hold one single share of stock, you need to see it now.

Doug Casey’s private strategy to turn crisis events into triple and quadruple profits is also revealed. But you have to see it soon because the broadcast goes offline on Saturday night… Click here for more.

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More praise for Bill’s “canny son” and his comments in Wednesday’s Diary issue – “Time to raise the white flag at Gualfin?

I’m with Bill’s son on the shenanigans of the originarios. Like the house in "Amityville Horror" said, “Get out!" Bill.

You had your fun, now go find something else and stop screwing with the inheritance of your progeny.

— Patrick D.

Your son is so right – it’s the same with welfare in this country – once they get it, it becomes a right; no longer a privilege.

Good luck with the situation. 

—Ezio M.

Bill I must agree with your son about all the private welfare you give those people down there in Argentina. You owe them nothing. Nor should you give them anything for their own and your sake.

As for the originarios idiocy… the story is very simple. You committed no crime. These originarios fools had no crime perpetuated against them. At one point somewhere in history a real crime might have taken place. I say might because the European coming to the Americas is complicated as you know. Your land might actually have been bought for some perceived value at that time! Not sure you could ever know, nor would it matter.

Even if there was a crime, the victim and perpetrator are long dead. To hold you responsible would be like a 400 year old murder where the murderer’s family must pay the victim’s family generation after generation forever. What sense does that make?

Don’t listen to your fool readers that back the originarios idiocy. Keep your land if you want. Sell it if you want. But do not give it to those malcontents down there for free.

— Sterling S.

Hola Bill. Listen to your children.

I have learned over the years to listen to mine. Sometimes it takes a while to hear what they are saying.

— Margie F.

Old Irish saying Bill… "Give a gift, make an enemy."

Your son is correct.

— Kathryn C.

Loved the comments by your children – they’re right, of course.

And you can strike the "almost" from your almost no chance of turning a profit.

— Tom F.


You’ve got some smart kids.

— Tony D.

In Case You Missed It…

Doug Casey and his team just warned America about the single largest threat to your investments right now.

If you hold any stocks, bonds, or bank accounts denominated in U.S. dollars, this message is for you.

Here’s the video – but you should watch it right now because it will go offline this Saturday night.