Inflation continues to run rampant and it’s distorting the entire economy. In a recent video, I explain how rising prices create the illusion of economic growth. And they are also allowing the US government to stealthily default on its massive debt. This is not a sign of a strong economy. GDP growth for the second quarter of the year came in lower than expected. Even so, the economy still appears to be experiencing solid growth. But a deeper dig into the numbers reveals a lot of smoke and mirrors. The media’s focus was on the 6.5% number, so-called “real” growth. That number is adjusted for inflation. Minus inflation, the nominal GDP gain was about 13%.The divergence between these two numbers really puts the inflation level into perspective. The deflator used in the GDP calculation was about 6.4%. That means almost half of the nominal GDP growth was due to inflation and not actual economic growth.
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