How is Real Wealth Created?

Assorted time wasters and wealth destroyers… snapchat and crack – to the right you can see the late Rob Ford (former mayor of Toronto) taking a hit from his crack pipe.

Check your children’s smart phones, tablets, and laptops. Let us know what you find. Foolish, idle, insipid – most of what we see in social media is a waste of time. And what about the internet? Was that just a summer delusion, too? Maybe. Since the internet took off, economic growth rates have been roughly cut in half.

And the median American household income has fallen 20% when you account for real inflation, not the government’s phony inflation figures.

What kind of service is that?

sentinelblog

From Acting Man, by Bill Bonner

An Abrupt Drop

Let’s turn back to our regular beat: the U.S. economy and its capital markets. We’ve been warning that the Fed would never make any substantial increase to interest rates. Not willingly, at least.

groping-in-the-darkGroping in the dark, Yellen-style

Each time Fed chief Janet Yellen opens her mouth, out comes a hint that more rate hikes might be coming. But each time, it turns out that the economy is not as robust as she had believed… and that a rate hike isn’t such a good idea after all.

Mainstream economists regularly dismiss worries about falling employment and output in the manufacturing sector.

“Don’t fret about it,” they say. “We have a robust service economy.”

Well, on Tuesday, the news came out that the service economy is not as robust as we thought. Bloomberg:

An abrupt drop in the Institute for Supply Management’s services…

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