Good article. The GDP of this nation has been a big lie since the 2007-2008 crash.http://www.zerohedge.com/news/2017-09-28/we-are-already-depression-if-borrowing-money-not-income
The money printed by the fed steals its value from existing holders of dollars. It is simple, increased supply, decreased value.
QuoteThe money printed by the fed steals its value from existing holders of dollars. It is simple, increased supply, decreased value. As I understand it, the deficit of value is made up by the petro dollar. The Saudis buy our bonds and we buy their oil, etc. The rest of the world that plays the petro dollar game also get screwed, but what's the alternative? Quit and you land up like Muammar and Saddam .
The above chain started by Ken with the excellent article reference is worth rereading in its entirety especially after the 3.5% GDP print (annualized) this morning. Putting the number in perspective, federal debt on June 29 was $21,195 billion and on September 28, $21,516 billion for a federal debt increase of $321 billion. Roughly speaking that is a pace for annual debt increase of $1,284 billion which is more than 6% of a 21,000 billion GDP economy. If the debt increase were subtracted from GDP; appropriate as explained in the article, incurring debt is not incurring income, then GDP contracted last quarter and it contracted rapidly. If an entity spends more than it takes in, it is losing value, and as a nation, we are losing value. Factor in state and local government debt increases and the situation is much worse. Then consider virtually all government spending is consumption which by definition consumes wealth; we are not only contracting, but we are also burning through our seed wealth to turn the situation around investing in wealth generating ventures.It is a sad commentary on the fiscal management of the country's politicians and the situation is made exacerbated by the fed's foolish monetary policy and stimulation games.
More food for thought from Denninger, this is heavy:http://market-ticker.org/akcs-www?post=236380