The Myth of Productivity, Again

The launch of ChatGPT in October 2022 ended the pandemic-era bear market in stocks. The AI story has been the predominant narrative for three years now. The indexes on Wall Street are at historic highs, surpassing 2000, 1968, 1929… the last three tech-inspired bubbles.

But ChatGPT did something else. It brought the idea of “productivity gains” back into the economic conversation. Look at this chart:

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Since the launch of ChatGPT, job openings in the U.S. have sunk. More of a return to trend after pandemic-era dislocations warped the hiring data. (Source: @infraa via X)

Many economists will interpret the introduction of AI tools in the workplace as a substitute for workers. And it’s true, almost immediately upon the introduction of Chat GPT, the stock market started to boom and job openings dropped.

It’s unlikely that AI tools, like ChatGPT, Perplexity or Claude, increased productivity overnight. But even the perception that they could, gives hiring managers a pause on posting new job openings. Maybe.

The more likely explanation is that the Federal Reserve began hiking interest rates to combat 9% inflation in 2022. Inflation alone gave employers a reason to be cautious when taking on full-time salaried employees.

Employment data trends were further complicated early in 2022 and 2023 because the Biden era statistics emphasize government-created jobs and part-time work… if even those stats don’t get revised away in the coming months.

Will AI ultimately lead to fewer jobs and shorter workweeks? When asked that question on Fox News’ Claman Countdown yesterday, Nvidia CEO Jensen Huang looked puzzled.

“No,” he responded. “These tools are so powerful and efficient, we’ll be busier than ever.”

In innovation cycles of the past, new efficiencies generally create jobs – yes, different jobs, new skills – but more of them.

~ Addison

P.S. Part of yesterday’s Grey Swan Live! with Mark Jeftovic covered some of this ground. Mark even made the bold claim that the internet could have gone away following the dotcom boom and the economy would have been fine – but that wouldn’t be the case with AI today.

The comment drew immediate discussion on the Live! chat board. Jeftovic also claimed the stock market has become so big, so fast, we won’t see a 2008-style collapse ever again… because if we did, that would be “the end” of our financial system.

Provocative stuff.

The fireworks continued when Mark and Andrew argued that, because of a new regulatory environment established by the Trump administration and now going into law, there is a significant possibility for a parabolic move in crypto by year-end, with an emphasis on several stocks that should benefit, no matter which specific cryptocurrencies take off.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

But ChatGPT did something else. It brought the idea of “productivity gains” back into the economic conversation. Look at this chart:

Turn Your Images On

Since the launch of ChatGPT, job openings in the U.S. have sunk. More of a return to trend after pandemic-era dislocations warped the hiring data. (Source: @infraa via X)

Will AI ultimately lead to fewer jobs and shorter workweeks? When asked that question on Fox News’ Claman Countdown yesterday, Nvidia CEO Jensen Huang looked puzzled.

“No,” he responded. “These tools are so powerful and efficient, we’ll be busier than ever.”

In innovation cycles of the past, new efficiencies generally create jobs – yes, different jobs, new skills – but more of them.

~ Addison

Provocative stuff.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

Back in the Global Financial Crisis (2008), we recall mass layoffs were driving desperation.

Today, unemployment is relatively low, if climbing.

Affordability is much more of an issue. Food, rent, healthcare, and childcare are all rising faster than wages. Households aren’t jobless; they’re stretched. Job “quits” are at crisis-level lows.

In addition to the top 10% of earners, consumer spending is still strong. Not necessarily because of prosperity, but because households are taking extra shifts, hustling gigs, working late into the night, and using credit cards. The trends hold up demand but hollow out savings.

It’s the quiet form of financial repression. In an era of fiscal dominance, savers see easy returns clipped, workers stretch hours just to stay even, and wealth slips upward into assets while daily life grows harder to afford.

Last month, Nasdaq asked the Securities and Exchange Commission (SEC) for approval to let tokenized stocks and ETFs trade on its main exchange.

If approved, these digital shares would sit side-by-side with traditional equities. Meaning, they would fall under the same U.S. securities laws that govern $50 trillion in annual equity trades.

And this rollout could begin as early as 2026, once the Depository Trust Company — the clearinghouse that settles every U.S. stock trade — updates its systems to handle digital tokens.

If it happens, this won’t be a small tweak to the machinery of finance. It’ll represent the first major step toward moving Wall Street onto blockchain infrastructure.

And we don’t have to imagine what it might look like…

Because it’s already happening.

Stablecoins have proceeded rapidly from being a grey zone through which capital would traverse as it moved into or out of the crypto-economy, to becoming an extension, if not a nascent pillar, of the fiat money system itself.

Coinbase Head of Institutional Research David Duong sees the market cap for stables hitting $1/2 trillion by 2028 (which would be somewhere between a 4X and 5X from where we are now).

Demetri Kofinas recently interviewed Charles Calomiris, former Chief Economist at the US Office of the Comptroller of the Currency, and it was eye-opening to hear someone of his stature speak so matter-of-factly about how the structure of the banking system is evolving in realtime.

The NYSE Arca Gold Miners Index is up 123% this year, the best this century.

The last time gold ran this hot — 1979 — savers stood in lines that wrapped around city blocks, waiting hours for Krugerrands and Maple Leafs. Fathers pulled kids out of school to get in line before the shop sold out. Dealers locked their doors mid-afternoon, unable to meet the demand.

It was less of an investment than survival. Inflation made cash a wasting asset, and gold was the last refuge.

We don’t want to see that again.

Gold is best as ballast — steady, weighty, tethering a portfolio to something real. When it turns into the object of a mania, it means we’ve entered the debt crisis of which we’ve long been wary.