GDP-B Doesn’t Cut It Either

By Alasdair Macleod – Re-Blogged From Gold Eagle

GDP is hyped-up to be an all-important measure of economic activity. It does not measure economic activity, instead recording meaningless money-totals spent in unsound currency over a given period. A bad statistic such as GDP is wide open to official manipulation, and there is always a desire to enhance it. GDP-B, which includes an estimated consumer surplus, appears to conform with this desire. If it is successfully introduced, GDP would be substantially increased, making governments look good, and reducing their debt to GDP ratios. However, it is no more than a statistical cheat.

Gross Domestic Product-B attempts to capture the added value of things we don’t pay for, such as Facebook, WhatsApp, Google and other digital services free to the user. B stands for benefits; the benefits consumers receive from free and subsidised services. It was devised by Erik Brynjolfsson, a professor at MIT, and is a work-in-progress. He points out that according to the US Bureau of Economic Affairs, the information sector in GDP statistics has been stuck at between four and five per cent of GDP for the last twenty-five years. Yet, the importance of this mainly digital sector now dominates both work and leisure activities, benefits not recorded in GDP.

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Another Day Older And Deeper In Debt

By Gary Christenson – Re-Blogged From Silver Phoenix

Official US national debt exceeds $21 trillion. National debt increases over $3 billion per day.

Another day older and $3 billion deeper in debt!

The U.S. government pays the interest by issuing new debt. But that new debt increases total debt and (eventually) drives up interest rates, which requires more borrowing to pay the annual interest payments. Another year older and deeper in debt! A reset will occur when the debt load becomes too heavy.

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Does China Have Enough Gold To Move Toward Hard Currency?

By Alasdair Macleod – Re-Blogged From Gold Eagle

Are the Chinese Keynesian?

We can be reasonably certain that Chinese government officials approaching middle age have been heavily westernised through their education. Nowhere is this likely to matter more than in the fields of finance and economics. In these disciplines there is perhaps a division between them and the old guard, exemplified and fronted by President Xi. The grey-beards who guide the National Peoples Congress are aging, and the brightest and best of their successors understand economic analysis differently, having been tutored in Western universities.

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America’s State Wreck Gathers Steam

Now it begins. They bought the February 8th dip just like the previous 40 odd plungelets in the stock averages since the March 2009 bottom, expecting another ka-ching in the easy money lane of the casino.

But this time it didn’t work. The market had been retreating for days and then tumbled 724 Dow points yesterday allegedly on the Donald’s $50 billion tariff assault on the China trade. Not surprisingly, the overnight follow-through in Asia was downright bloody with Shanghai down 3.4%, the Nikkei lower by 4.5% and China’s NASDAQ equivalent off by more than 5%.

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“Price inflation” Is Not The Biggest Problem

By Steve Saville – Re-Blogged From The Speculative Investor

All else remaining equal, an increase in the supply of money will lead to a decrease in the purchasing-power (price) of money. Furthermore, this is the only effect of monetary inflation that the average economist or central banker cares about. Increases in the money supply are therefore generally considered to be harmless or even beneficial as long as the purchasing-power of money is perceived to be fairly stable*. However, reduced purchasing-power for money is not the most important adverse effect of monetary inflation.

If an increase in the supply of money led to a proportional shift in prices throughout the economy, then its consequences would be both easy to see and not particularly troublesome. Unfortunately, that’s not the way it happens. What actually happens is that monetary inflation causes changes in relative prices, with the spending of the first recipients of the newly-created money determining the prices that rise the first and the most.

Changes in relative prices generate signals that direct investment. The further these signals are from reality, that is, the more these signals are distorted by the creation of new money, the more investing errors there will be and the less productive the economy will become.

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Gold, The Fed, Exter’s Pyramid – When John Exter Met Paul Volcker

By Mark O’Byrne – Re-Blogged From http://www.Gold-Eagle.com

GoldCore are blessed to have many well connected, informed and enlightened subscribers and clients throughout the world. On a daily basis, we receive interesting tidbits and insights from all corners of the world.  A common thread in the dialogue with our growing 31,824 email subscribers and wider online and social media following is a genuine concern about the economic, financial and indeed monetary outlook for the world.

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Return to a Sound Money in the US

cropped-bob-shapiro.jpg   By Bob Shapiro

Germany, after World War I, was forced to pay war reparations that it couldn’t afford. In 1921, it paid 2 Billion gold marks, but in 1922 it couldn’t make the payment, but was allowed to pay “in kind” in coal, steel, etc. In 1923, France and Belgium invaded and took over Germany’s industrial Rurh Valley.

Workers went on strike, and the government printed paper money to feed them. Thus began Weimar Germany’s Hyperinflation. From 1922

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