“Yes, Virginia, two plus two can equal five.  And since we’re the U.S. Government, we can tell you that two plus two equals six.”

Caution:  our Governmental system is now on full retard.
Wednesday’s GDP report was a complete Orwellian farce.  The annualized number for Q2 was reported to be 1.7%.  Of course, lost in the shuffle was the second massive downward revision for Q1 GDP, which was revised down again from 1.8% to 1.1%  What that means is that on an inflation-adjusted basis the first quarter GDP was negative – i.e. the economy is in a recession.

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From Truth in Gold:

However today the Government rolled out its massive “revision” in the overall GDP level going all the way back to 1929.  In sparing you the ugly details, essentially the net affect of this was to raise the overall GDP level by $551 billion. How, you might ask?  The Government went all the way back to 1929 and reclassified all the money spent on “intellectual property products” and reclassified them as “investments” rather than expenses as incurred.  So, if you figure out a new way to remove the wrapper from a Hershey bar, the Government decided that 20% of the cost of that Hershey bar was an “investment” in making your life easier, so 20 cents of the dollar spent becomes an “investment” and added to the GDP.  While that may seem like an absurd analogy, it really isn’t.  Here’s the BEA’s nice marketing flyer on this Orwellian change:  LINK

Of today’s 1.7% annualized GDP estimate, .15 is attributed to the new “intellectual property products” and .41 is attributed to inventory build.  Why are businesses building inventory when consumer demand for everything except basic necessities is declining?  If you strip out the unneeded inventory build and erase the intellectual property garbage, the GDP is 1.2%.

Recall that Q1 GDP was originally reported at 2.4%, revised the first time around to 1.8% and now has been taken down 1.1%.  Expect the same thing to happen to today’s farce of a number.  As for the half-trillion dollars added to the overall level of GDP, there’s only one reason this was conjured up:  it makes the Debt to GDP ratio look not quite as bad.  It goes from 105% of GDP to 101%.   Brace yourself for a big increase to the debt limit ceiling…

Orwell is laughing his ass off and Atlas just shrugs.

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  1. Nose miners, origami sculpturists and belly button lint farmers are  now $250,000,000,000 of the new age GDP.  We can all do this full time. Full time means full employment. Full employment means we are in recovery.  Raise taxes and all is well. 

  2. Out of everything they have been doing to fudge figures and the twisting of data, this is the most bogus and the the most desperate yet!! I have always shrugged it off, been sarcastic and rolled my eyes at the dodgy stats but this one has made me angry.
    I want to see these banking elites / criminals trembling in their boots with Obama seen hiding behind their backs as the proverbial sh@&t starts hitting the fan!!  

  3. I suppose that is why history is littered with victims of currency collapse: Even amongst those whom should be in the best position to know; normalcy bias and cognitive dissonance are powerful human afflictions. We continue on as stupified witness to the apparent global trance, a spell of fiat empires.
    far away, across the field
    the tolling on an iron bell…
    calls the faithful to their knees
    to hear the softly spoken magic spell.
    Is it Time yet???

  4. A lot of this reminds me of a book I read many years ago.  The USSR was riding high at the time and the purpose of this book was to gather facts that pointed out that they were not super-men and that they were just as prone to error as the rest of us.  I do not recall the title of this book but it concentrated on Soviet Aid to developing countries mistakes.  In one case, there was a match plant in Cuba that was having production problems and not meeting their state-mandated quota of match box production.  The manager was warned by those in power in Havana that if he did not raise production, he would be fired and given a menial job at reduced pay somewhere else.  In desperation, he turned to the Soviet trade delegation for assistance.  They looked over the plant and made a suggestion as to how he could double his production.  So, he followed their advice and did, in fact, double the number of boxes of matches his plant was shipping out.  Havana was pleased and he got a promotion, a raise, and a car and driver as befits a man of his managerial skill.  The solution?  Put 50 matches in each box instead of the former 100 matches!
    Somehow, this little story reminds me of what the BLS and the Fed are doing on a daily basis… fudging the numbers so they can LOOK GOOD without having to do the much more difficult job of actually BEING GOOD.

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