
”They used to heed the words he said, but that was yesterday. Gold will turn to gray and youth will fade away…”
— Jerry Garcia & David Grisman
With so much discussion of AI lately, we thought we’d give ChatGPT a go.
Following a lead we got from Alexandra Semenova at the Financial Times, we asked the bot what “the old economy” is. Here’s the bot’s response:
The old economy has come back into play today due to a combination of economic, societal, and investor-driven factors that have shifted the focus back towards established, reliable, and sustainable industries.
The term “old economy” is often used to refer to traditional or established industries that have been around for a long time and tend to operate in a more stable manner compared to newer, more dynamic sectors. These industries typically have a large physical presence and produce tangible goods or services, such as manufacturing, energy, transportation, and retail.
In the context of finance, the old economy is often associated with companies that have a history of steady growth, stable cash flows, and predictable earnings. These companies tend to have a strong brand presence, established customer base, and a long-standing reputation in their respective industries.
Well, the robot is not wrong, per se.
While it’s written like a high school term paper, you have to be a little impressed. It only took a few milliseconds to produce an effectively passing grade.
Disclaimer: the bot does by its own admission “occasionally generate incorrect information.”
Okay.
The suits at JPMorgan are not okay with ChatGPTs dastardly sputterances. They’ve banned the AI from their networks.
“AI is just another frontier waiting for fraud and deception,” the curmudgeon in us writes.
The real question is: what does the robot think about the “economic, societal and investor-driven factors” that are signaling grande and pervasive change in the markets. Where did the bot pull that idea from?
Call it a paradigm shift or changing times.
The AI only pulls from existing data on the Internet.
We’ve spent the last week scrupulously tracking value versus growth stock price actions and other facets of a “stock-picker’s” market. We conducted our first Live Webinar on Tuesday and released the Essential Investor Model Portfolio to our paid readers as a bastion against volatility and uncertainty.
ChatGPT seems to be confirming our forecast. But we’re not convinced. As Scott Adams would say in his award-winning cartoon Dilbert, “garbage in, garbage out” or “GIGO” for short if you’re a tech geek.
The trouble with bots is obvious. There’s no human with a brain stem connected.
“We could question whether expansionary monetary and fiscal policies are always positive for the economy and for real stock prices,” writes Marc Faber in his monthly Gloom Boom Doom (GBD) report, “but I don’t want to get into a discussion here of fiscal policies because that would involve a lengthy debate not only about the quality, but also the quantity, of government spending. I prefer to stick to the simplest indicators of liquidity, which the asset markets provide themselves.”
If we are to follow the money, or the lack thereof, we’ll find that our robot’s essaie is not far from hitting the mark.
“With the end of zero interest rate policy, we see the pendulum swinging back to the old economy as prolonged underinvestment has led to supply issues in the old economy,” Savita Subramanian, BofA’s head of U.S. equity and quantitative strategy said in a note earlier this week. “Bear markets have historically resulted in leadership change,” he continues, “which suggests old economy sectors are likely the winners of this cycle.”
With these components of the market depleted of capital over the past ten years as Big Tech was powered by free money, the “pendulum is expected to swing back” in their direction, Subramanian noted further.

Bank of America recently raised Materials to overweight and remains overweight Energy. (Source: BofA Global Research)
Monetary policies are not tight enough to combat inflation permanently, but they are tight enough to prevent asset prices from continuing their long-term ascent.
In other words, we are at the beginning of an upward wave in inflation and interest rates that could last for a long time.
If that’s true, how would the chatbot know?
Mnnn,
Addison Wiggin
The Wiggin Sessions

Addison Wiggin
Addison Wiggin is an American writer, publisher, and filmmaker. He was the founder of Agora Financial and publisher for 18 years. An acclaimed New York Times best-selling author, his books include: Financial Reckoning Day, Empire of Debt, The Demise of the Dollar, and The Little Book of the Shrinking Dollar. Addison is also the writer and executive producer of the documentary I.O.U.S.A., an exposé on the national debt, shortlisted for an Academy Award in 2008. He lives in Baltimore, Maryland with his family. Addison started his latest project, The Wiggin Sessions, powered by Consilience Financial, in March 2020. He films from a homegrown studio in his basement.