The Next Recession Has Already Begun

The Next Recession Has Already Begun

The following is an excerpt from a recent issue of Private Wealth Advisory.

The official data is out and it shows that GDP collapsed 0.7% in the first quarter of 2015.

The financial world is shocked by this because:

1)   The drop occurred despite the Government massaging the heck out of the data to make it look better.

2)   The world has bought into the idea that the Fed can remove any and all recessions by printing money.

Regarding #1, the Government recently added a bunch of bogus measures to GDP such as intellectual property. How exactly you can accurately measure the value of intellectual property is beyond me. But then again, much of what the Government does in the name of “the better good” is beyond me as well.

Despite adding this and a slew of other accounting gimmicks, the economy collapsed 0.7% in the first quarter. This is shocking only to those who believe that official GDP is an accurate measure of economic growth.

Our readers have been well aware for some time that the GDP number is largely an accounting fiction meant to overstate growth. Indeed, if you strip out the various gimmicks employed by the BLS, you find that the year over year growth for GDP has been at levels usually associated with recessions for years.

Recessionary levels are circled in the chart below.

NOM GPD.png

Small wonder the “recovery” has felt so weak… the economy has been moving at pace usually associated with a contraction!

One Response to “The Next Recession Has Already Begun”

  1. I sent this link to my news director

    http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf

    If you remember, C + I + G = GDP decreasing C and forced increases in I are not good indicators for the economy.

    “This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a virtually unchanged March increase.”

    But I hear things are going well in the Middle East.

    Winning!
    .

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