Measuring Recession

By Alasdair Macleod – Re-Blogged From Gold Money

Using nominal GDP, or GDP deflated by the CPI, as the principal guide to the state of the economy is a common mistake which will eventually prove very costly. Having convinced themselves that GDP measures economic progress, government statisticians have suppressed evidence of price inflation, giving the illusion of economic growth. Policy makers appear unaware that they are leeching ordinary people and their businesses of their wealth to the point where an economic and monetary collapse becomes inevitable. This article exposes how the authorities use GDP and the CPI to conceal the true deterioration of an economy.

Introduction

When an economy turns from expansion to contraction there is an order of events. The first signs are an unexpected increase in inventories of unsold goods, both accompanied with and followed by business surveys indicating a general softening in demand. For monetarists, this is often confirmed by an inverting yield curve, which tells them that at the margin the short-term rates set by the central bank are becoming too high for business conditions.

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Big Debt-Fueled GDP Number For The 2nd Quarter

By Michael Snyder – Re-Blogged From Freedom Outpost

What kind of number for GDP growth in the 2nd quarter will we get on Friday? The market consensus is somewhere around 4 percent, but there are many out there that are expecting a number above 5 percent. The last time we witnessed such a number was during the third quarter of 2014 when the U.S. economy grew by 5.2 percent. If Friday’s GDP figure is better than that, it will be the best report that we have had since 2003. But let’s keep things in perspective. In seven of the last 10 years, GDP growth was much lower than anticipated in the first quarter and much higher than anticipated in the second quarter. It looks like that pattern may play out again in 2018, and analysts are already warning us to expect a much lower number for the third quarter.

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Inaccurate Statistics And The Threat To Bonds

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

Statistics have become very misleading:  in particular we are being badly misled into believing that the US is teetering on the edge of price deflation, because the US official rate of inflation is barely positive, a level that US bonds and therefore all other financial markets have priced in without accepting it is actually significantly higher.

There are two possible approaches to assessing the true rate of price inflation. You can either reverse all the tweaks government statisticians have implemented over the decades to reduce the apparent rate, or you can collect a statistically significant sample of price data independently and turn that into an index. John Williams of Shadowstats.com is well known for his work on the former approach, but until recently I was unaware that anyone was attempting the latter. That is until Simon Hunt of Simon Hunt Strategic Services drew my attention to the Chapwood Index, which deserves wider publicity.

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Stop Government Statistical Fraud

cropped-bob-shapiro.jpg   By Bob Shapiro

The US Federal Government continues to release reports to the American people that either mislead or falsify the underlying data. This sorry state of affairs has been going on for generations, although it appears to have gotten worse – and blatantly so – during the reign of the current Administration.

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The CPI and The Dollar

cropped-bob-shapiro.jpg   By Bob Shapiro

The Year-Over-Year rise in the official CPI has turned negative, while the ShadowStats versions, using the BLS calculation methodologies used in 1990 and 1980, still show positive if lowered price increase rates. The 1990 methodology shows prices 3 1/2 % higher than a year earlier, down from a 5 1/2 % rise last year from the previous 12 months. The 1980 methodology shows a slowing of consumer price hikes to about 5% (YOY) compared to the previous year’s 10% (YOY) rate.

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