Thursday, November 7, 2013

GDP and the Greater Fool Theory

National GDP came out today at 2.84%. That was certainly a beat of the expected 2.5%.

The numbers once again proved that nutters like me- are wrong, didn't they? Our economy is excellent and the stock market is fairly priced near 16,000. The Twitter IPO with virtually no earnings is worth 35 bucks a share, right?

Enter the Greater Fool Theory. There must always be a greater fool than you who will buy Twitter at 45- so that you can profit at 35. That fool in turn must need someone willing to pay 55.

GDP numbers have always been cooked and inflated with the use of inventory. Most of us know that and when today's 2.84 print came out I was a little shocked. At first I was puzzled, because everything I am seeing and reading does not support that kind of number. Then it hit me. The latest government manipulation- thanks to this commenter.

The BEA's GDP tables tell us that the gross change in GDP from 2Q -> 3Q was $196.6 billion.  But the Fed's QE program injected $255 billion, so in fact the economyshrank during the 3rd quarter.

And then I remembered the government's latest charade announced last summer that most of us forgot about.

They re-configured GDP "intangibles" all the way back to 1929. That way they could manipulate and boost GDP figures with such things as film royalties, research and development, and garage sales. They literally positioned themselves to manipulate the data with items that do exist but that nobody has a firm way of counting and never has- thus the term "intangibles."

Here's a link. http://www.ft.com/intl/cms/s/0/52d23fa6-aa98-11e2-bc0d-00144feabdc0.html#axzz2jwd2twHW

When you change the measuring rules- such as the input numbers- you are nearing the end. It is the last gasp of a power structure that is willing to try any trick imaginable to retain power. In this case, manipulating this nation's last bastion of wealth- retirement assets and ultimately destroying them- at the same time picking our pockets with a newer, giant, healthcare bill that they are willing to punish you for if you do not buy it.

All of that greased with fraudulent inflation, employment, and GDP figures. Of course it's a sham but then again- what else would you expect from our government masters?

All of this is going to come together in 2014. Get ready. The stock market's blow off top is here and not one responsible person has received an Obamacare bill or sent in an Obamacare check yet.

All of this as the middle classes' income shrinks monthly. This is gonna be good.

We are near the end. I will give this faux economy one more year subject to change if the government pulls anymore of it's tricks.

3 comments:

Marcus said...

"Who controls the past controls the future. Who controls the present controls the past."
George Orwell

Any wonder why past data is being manipulated?

Jim at Asylum Watch said...

We are witnessing the perfect dtorm as it forms. We have QE and ZIRP inflating the mother of all bubbles coming from the monetary side and we the other idiots in Washington strangling the life out of what's left of the middle class with ObamaCare and more draconian EPA regulations. It's salvese quien pueda time, amigo!

Anonymous said...

The powers to be have created the second edition of "To Serve Man".