Playing fiscal games with the GDP


Surprise surprise! The official figures may not reflect reality.
I do feel obligated to point this out, although I do not think we are to the panic stage yet.

Surprise! The government figures regarding inflation and the economy are tissues of lies.

John Williams' Shadow Government Statistics paint a far different picture. Mr. Williams generally reports economic figures the old fashioned way, avoiding the many gimmicks introduced since the Reagan robbery of social security.

His figures show GDP growth is -2%, and we have been in a recession since the burst of the Greenspan dot-com bubble at the end of 2000. Consumer price inflation is above 10% and rising. (Nixon imposed wage and price controls in 1971 when price inflation rose above 4%.) M3, the broadest measure of the money supply, is rising at over 13% year-over-year.

What's that? The FED stopped reporting M3 in 2006, claiming it was too costly to produce. Mr. Williams, like all free market actors, is able to produce with very little effort what the bloated FED cannot, or does not want to do. Inflation of the supply of money is the root cause of price inflation, and the FED doesn't want too many people to pay attention to the men behind the curtains.

I believe the huge increase in M3 explains a lot about why we don't already have a full-blown, widely recognized depression. At the current rate of growth, an astonishing $1.4 trillion in new money is being created every year. The GDP is $13.6 trillion; adding 10% of that figure in brand new, created from thin air money to the economy increases GDP only 0.6%? Clearly we are losing ground.

I suppose my main objection is that I don't believe we can rely on government to provide a solution, particularly government that wants to hide the size of it's deficit.

Social security was being robbed before Reagan, you have Johnson to thank for that fiasco.

I just want the government out of the money supply.

— NeoWayland

Posted: Sat - June 16, 2007 at 05:26 AM  Tag


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