US Government Converts Inflation into GDP
July 31, 2009 | about: SPY
The Coming Hyper Inflation that we have warned of for some months – Now is the time to invest in depressed houses and lands so as to guard against all your savings and nest egg to become worthless. Do not invest in the Stock Market at this time as it will dive again in the coming months.
Be warned: We have read a recent article that in the not to distant future Obama will declare a bank holiday in which all accounts and funds will be frozen for a few days to few weeks as the nations banks are scrubbed.
Bigger still a second bank holiday is said to be schedualed for just after the midterm election in which there will be a change of US currency – that is all the old dollars will have to be turned in and exchanged for new dollars and the old dollars will then be declared void. To end cash hoarding, money laundering by drug cartels and rouge governments like Venezuala and North Korea that have been printing and using fake US currency for a decade of more.
I have been adamant there will be no “2nd half recovery” in the
The commercial real estate collapse has just started. U.S. banks have simply
been “rolling over” hundreds of billions of dollars in bad debt, meaning there
is a huge spike in refinancing requirements for this $6 trillion market – just
as defaults are soaring to record levels. This market is about four times
bigger than the sub-prime mortgage market, thus this will cause much more pain
and losses on bank balance sheets than sub-prime losses, with
These are the same “stress-tested” banks that Tim-the-tax-cheat Geithner claims are “well-capitalized”.
U.S. unemployment continues to worsen at Great Depression levels, with real monthly job losses still at least 1.5 million per month (see “U.S. economy to lose 20 MILLION jobs this year”), and now state and local governments, along with U.S. retailers are beginning to make their own job-cuts. Falling wages, and falling hours-of-work are making this employment crisis much worse.
In June alone, the official inflation-rate was an annualized 8.4% (see “Credit Risk spike means continued collapse for U.S. economy”).
While there will be no
A legitimate GDP reading must be deflated for inflation, precisely to avoid
confusing inflation with actual economic growth. The only reason the
However, with inflation in the
As I stated earlier, official
Williams has reported that so far this year inflation was running at over 6%, and that was before the huge jump in June. It's a matter of simple arithmetic that with inflation being more than thirty times as large as the ludicrous “deflator” which the U.S. government used to adjust Q2 GDP, that this “statistic” has no connection with the real world.
Sadly, the lies will only get bigger going forward – given that inflation is certain to worsen. As a general “rule of thumb”, subtracting 5% from “official” U.S. GDP will give people a number which is at least a good approximation of GDP, although even that might not be adequate as the U.S. government gets increasingly desperate to 'manufacture' good numbers going forward.
That makes today's official reading of -1% not quite the “good news” which
is being trumpeted by the