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Stock Ideas Investors Daily Edge Recession … What’s New?
Stock Ideas Investors Daily Edge Recession … What’s New? 
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| Recession … What’s New? |
| Wednesday, 06 February 2008 | ||||||||
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There are several definitions of “recession.” For the purposes of this article, I’ll use the most common one of “two or more consecutive quarters of negative GDP growth.” At times it’s hard to fathom how so many citizens get worked up over a percent or two decline of national production. Is that really a legitimate reason for economic panic? The glass is still 98- or 99-percent full. Or is it? Trusting government statistics is nothing less than an extreme sport these days. Theirs are the figures that give us the official pronouncements of “recession.” Let’s look at what they’ve brought our way over the recent years. This chart is from John William’s Shadow Government Statistics report http://www.shadowstats.com/. This site is a must bookmark. The red line shows the officially reported U.S. GDP. The blue line shows GDP calculated on a more historically accurate basis before Big Brother entered into the business of outlandish manipulation of reported data. Those of us who claim to be smarter than a fifth grader can clearly see two or more consecutive quarters of negative growth repeatedly this decade on the above chart (blue lines). It is because of this chart that I continue to say we’ve been in and out of recession throughout the 2000s. Now we’re heading toward an “officially recognized” recession. That can’t be good. What’s so special about this one that it can’t be denied? Here’s another really ugly perspective that explains why you’re eating Spam earlier and earlier each month. In this work of fiction the red line shows government-reported inflation. The blue line shows inflation as it used to be reported in the 1980s. Which do you trust? GDP and inflation need to be examined together! If you produce five percent more in a given year and true price inflation is also five percent, you’ve made nothing more. If you make less than five-percent more in a given year, you’ve lost ground. Hello. The above chart shows true inflation in a recent 10- to 12-percent range. There are money printing reasons behind this atrocious figure. They are really gearing up now. Now, let’s look back at the “recession” argument. If inflation, as measured by rising prices, is greater than productivity (GDP), we are in a period of negative growth. That is recession. Look back at the first chart. The feds tell us we’ve grown as much as four percent annually this decade. One to minus three percent is clearly more representative as shown by the blue line.
Reviewing the second chart will show you rising prices as a direct result of ongoing currency mismanagement. The only growth seen is in expenses. You’ve been living in an actual recession for most of this decade. Let’s hope we’re not soon forced to learn the official definition of a “depression.” Invest resourcefully, Rusty P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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