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Thread: John Williams - The “Recovery” Faked By Phony Gov. Numbers

  1. #1

    Default John Williams - The “Recovery” Faked By Phony Gov. Numbers

    John Williams continues:


    “Indeed, the ‘recovery’ is an illusion that has been created as a direct result of methodological changes in government inflation reporting of recent decades. Those methodological changes have resulted in an artificial lowering of official rates of inflation. The faux growth problem is in the use of understated inflation estimates in deflating a number of economic series.


    Major economic series that have no underlying pricing base—such as housing starts, payroll employment and consumer confidence—correspondingly do not require inflation adjustment to put them on a consistent theoretical basis with the concept of real (inflation-adjusted) GDP.


    Those series confirm a history of business activity in recent years that shows a plunge in the economy from 2006/2007 into late-2008/mid-2009, followed by a period of protracted, low-level stagnation, or bottom-bouncing, instead of a “recovery.”


    Following are two graphs reflecting the latest GDP information. The first graph shows the real GDP level, as deflated by the official IPD. Note the recent recovery of activity versus pre-recession levels. The second graph is inflation-corrected.


    http://goo.gl/nVvnR



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  3. #2

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    Being in a recovery is not the same thing as being "recovered". Being in a recovery means that things have improved from the worst levels- and they have (as the charts at the link show). It does not mean that you are back to where you were before things went bad.
    Last edited by Zippyjuan; 05-01-2012 at 11:00 AM.
    "The future is here, it's just not evenly distributed yet." - William Gibson

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  4. #3

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    "He's talkin' to his gut like it's a person!!" -me
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  5. #4

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    a recovery implies improving conditions - while they may have improved off the bottom of the 2008 spike, they sure ain't improving now!

    check out how long ago recovery.gov was registered as a domain... January 2009!
    Oligarchy delenda est

    “If you love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that you were our countrymen.” - Samuel Adams

  6. #5

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    The scale on the charts also makes them appear much more dramatic than they actually are. Take a look at the second one- "Inflation Corrected Real GDP Seasonally Adjusted". It takes the year 2000 and makes that its benchmark. Ok. Now the lowest line on the graph is not zero, but is 95 which would be a five percent reduction from where it was in 2000 and the line of the graph never reaches that point. At first glance since it appears that the line nearly reaches the bottom that things went down by some 90+% if one were to assume that the bottom was zero.

    The scales on the two charts are also not the same so it appears that there is much more dramatic movement on the second than the first. Let's examine the grey bar on the right- the recessionary period. In the first graph, it peaks at about 121 and goes down to 115 or a drop of six points. Now the second graph. It peaks at roughly 103.5 and drops down to 95.4 or 8.1 points. Different (one is "seasonally adjusted" and the other "inflation adjusted" so they are not the same to begin with) but not as significantly as a quick glance may imply.

    I would like to see them both drawn to the same scale.
    Last edited by Zippyjuan; 05-01-2012 at 11:23 AM.
    "The future is here, it's just not evenly distributed yet." - William Gibson

    I am Zippy and I approve of this post. But you don't have to.






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