VIENNA – Real money must reflect the realities of the real economy.

If it becomes detached from economic reality, like a clock that no longer tells the right time, it becomes a hazard to everyone.

Appointments are missed. Trains crash. You show up at the airport and find the plane left two hours ago!

Air France is on strike. Our flight – with Austrian Airlines – left an hour late as a result.

“This is a mess,” we said to nobody in particular, as we waited for a plane this morning.

“Welcome to France,” said a voice behind us.

Murdered by Barbarians

Puzzling out the secrets of money and interest rates was interrupted by the news… and nostalgia.

The gruesome details: An 86-year-old French priest was forced to kneel in his church. Then his throat was cut.

“Murdered by Barbarians,” screamed a headline in the French newspaper Le Figaro.

“We must be pitiless,” said former president Nicolas Sarkozy. “It’s war.”

He may have picked up a few lines from Saint Bernard, rehearsed nearly 1,000 years ago.

In the Burgundian town of Vézelay, on March 31, 1146, St. Bernard of Clairvaux delivered his famous oration on responding to the Muslim threat:

Will you allow the infidels to contemplate in peace the ravages they have committed on Christian people? […] Fly then to arms; let a holy rage animate you in the fight, and let the Christian world resound with these words of the prophet: “Cursed be he who does not stain his sword with blood!”

In France – as in the U.S. – saintly politicians compete to see who can most convincingly promise to “get tough.”

Of course, getting tough is just what the so-called Islamic State (known in France by its Arabic acronym, Daesh) wants.

The strategy is ancient. More than 2,000 years ago, radical Jewish groups conducted a war of terror against their Roman masters, hoping to provoke a crackdown by the authorities… leading to the radicalization of the masses.

Did it work?

Depends on how you look at it. The Jews got their crackdown. Vespasian and Titus put down their insurrection, leveled Jerusalem, destroyed The Temple and, according to Josephus, killed 1.1 million Jews.

Communists, Trotskyites, Maoists

We remember discussing the radicals’ strategy back in 1969.

This is where the nostalgia comes in…

Last night, we stayed at a tiny hotel in Paris, near where we first got to know the city 43 years ago.

We had gone for a semester abroad, after discovering that the tuition at the University of Paris was only $80. That meant that even with airfare, it was cheaper to go to the Sorbonne than to the University of Maryland.

The semester turned into a lifelong relationship, marked by equal periods of affection and disgust.

We didn’t speak French at the time, but we had had four years of it in high school. That seemed like plenty. (Although it later proved comically insufficient.)

But we were adventurous back then. And penniless. So, we got ourselves to Paris… and hung out at the bars around St.-Germain-des-Prés.

It was a very different city in the 1960s. It was a world leader in fashion, technology, movies, food, and philosophy.

But Paris had a problem back then, too.

Communists, Trotskyites, Maoists, anarchists, syndicalists, and students – in 1968, they rebelled, ripped up the streets to build barricades out of the paving stones (the streets were covered with asphalt soon after), and engaged with the police in pitched battles.

By the time we arrived a year later, skirmishes between gendarmes and radical groups were still going on.

The organized rebels would race around a corner, throw rocks and Molotov cocktails at police who formed up into protected phalanxes with their clear plastic shields.

Then the cops would suddenly charge the insurgents, swinging their billy clubs at anyone they could reach.

Trained and practiced, the terrorists would retreat quickly. This left the police with nobody to rough up except innocent onlookers.

That is how your editor nearly got hospitalized. Walking down the street, he was mistaken for a radical… knocked to the ground and worked over by three policemen, who eagerly went about their work with happy cudgels.

Revolutionary Strategy

Sitting in a café with a bandaged face, we discussed the revolutionaries’ strategy with a young French intellectual of Trotskyite tendencies.

Even almost a half-century later, we recalled the conversation when we passed the café (still in business) where it took place.

“Oh… sorry to see you got beaten up,” he said. “But it’s just collateral damage. We’re making headway.

“The police don’t like it when we attack them. It’s a point of pride, more than anything else. So, they overreact. But the more they show on TV people like you getting beaten up by the cops, the more the working class comes over to our side. We’re going to win.”

The revolutionaries did not win. They did not topple the Fifth Republic. But they eventually got much of what they wanted – free schooling… free drugs and medical attention… a high-cost, zombified, crony economy… a bureaucratized, tightly regulated society… even a 35-hour workweek.

And now look at it.

“Yes, it’s a mess…” repeated the voice behind us.




Further Reading: The rising tide of global terror is only strengthening the Deep State’s grip on you and your life. And in his latest warning, Bill explains exactly how this shadowy group of unelected elites is corrupting our financial system… and pushing the U.S. economy closer and closer to an imminent breakdown.

But he also offers some individual financial solutions you can put in place on your own to help you and your children live in a safe, prosperous, and free country. Watch here now.

Market Insight


The French stock market is a mess, too…

Today’s chart is of the MSCI France Index. It tracks the performance of large- and mid-cap French stocks.

As you can see, it’s been making a series of lower highs and lower lows over the past two years…

…a classic bearish trading pattern.

Featured Reads

Investors Are Dumping European Stocks
According to a new report, investors globally have yanked $129 billion from equity funds since the beginning of the year – the largest annual outflow on record.

Five Ways Your Brain Is Fooling You
As an investor, it’s imperative you understand the ways in which your brain fools you. Neuroscientist Dean Burnett explains five of the common ways your gray matter distorts reality.

Investor Alert: New Technology to Replace Smartphone Soon
One tech analyst says a totally new type of technology will replace your smartphone in the not-too-distant future. And that could make it a $120 billion market by 2020.


One of the most popular Diary topics continues to be Bill’s family ranch in Northwestern Argentina… and the dilemma he faces there.

Your earlier contemplation of buying the adjacent ranch to double down on your ranching losses reminded me of a sincere belief often cited by borrowers we used to hear from in the banking business: “I’m losing money on every widget/steer/bushel I sell. But I can make it up on volume."

A banker’s axiom: “Your first loss is your least loss.” I know you don’t hold much regard for bankers. But take some advice from this old, retired banker curmudgeon. Either dump the ranch, or admit you enjoy it as an expensive hobby.

Give it a name, and adopt it. But don’t add to your “enjoyment” by compounding your investment in a white elephant.

– Doug L.

So sorry to hear about your travails. I am at 10,000 feet in the Andes above Cuenca, Ecuador. It is dry, but I have plenty of irrigation water. I have a horse ranch on a much smaller scale.

There is something unique about this place. I sense no envy from the local people. They are friendly and helpful. Times are tough here with the lower oil prices and the earthquake to boot. There are more thieves stealing stuff to feed their families. But these folks are resilient and without envy – a rarity in the world. I wish you luck with your ranch.

– Nat G.

Have you given thought to exploring and/or drilling for water? Suggestion: several deep and high volume wells.

– John B.

Have you considered turning your ranch in Argentina into a huge solar farm and getting the government to subsidize you with their hyper-inflated currency and then buying the power from you for the next 100 years?

– Dudley H.

We’ve also been receiving lots of feedback and suggestions about Jeff Brown’s tech investing advisory, Exponential Tech Investor.

I am a new lifetime member of Exponential Tech Investor. I would like to submit a request that a column be added to the portfolio titled “Buy Up To.” 

The intent of the new column would be to allow subscribers quickly see what the “buy up to” price is for each recommended stock. And if the “buy up to” price is raised, it would be evident as well.

This would allow subscribers who missed the initial “buy up to” price to buy the stock later on, if Jeff feels that a higher “buy up to” price is warranted. Thanks.

– Greg A.

Chris comment: We now have a “buy up to” price listed in the “Advice” column of the recommended Exponential Tech Investor portfolio. Paid-up subscribers can check it out here.

In Case You Missed It…

Teeka Tiwari, our trusted colleague and editor of The Palm Beach Letter publishes 3-Minute Market Minder videos from time to time, and his latest is definitely one worth watching.

In it, Teeka explains how the president of the Cleveland Federal Reserve bank just inadvertently gave away the Fed’s whole playbook. Watch below.