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Thread: SHOCK: ECONOMY SHRINKS

  1. #1

    Default SHOCK: ECONOMY SHRINKS


    The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.

    The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.

    The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.

    The surprise contraction could raise fears about the economy's ability to handle tax increases that took effect in January and looming spending cuts.
    cont
    http://www.cnbc.com/id/100419252



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  3. #2

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    And look what they blame..

    The U.S. was hurt by the biggest cut in defense spending in 40 years.

  4. #3

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    huh. Right after the election.

  5. #4

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    Quote Originally Posted by Romulus View Post
    And look what they blame..
    Not to mention what they propose as a possible solution...
    ...possibly providing incentive for more Federal Reserve stimulus.
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  6. #5

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    Why don't we get paul krugman to shed some light on the situation...
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    Most of it was blamed on companies holding back on doing anything while they waited to see what was going on with the Fiscal Cliff issue. Defense spending was lower after a huge surge in October (last month of the fiscal year) and that dropped off as well. Things are expected to rebound next month.

    http://online.wsj.com/article/SB1000...039517142.html
    The details weren't as discouraging as the headline. The drop, a surprise, was driven by a sharp fall in government spending and by businesses putting fewer goods on warehouse shelves, as well as by a decline in exports. The mainstays of the domestic private economy—housing, consumer spending and business investment in equipment and software—were stronger.

    Research firm Capital Economics called the report "the best-looking contraction in U.S. GDP you'll ever see." Forecasters didn't see the decline as a harbinger of recession. They predicted the U.S. will expand at around a 2% pace in the current quarter, though the mood could shift Friday when the government releases its monthly snapshot of the job market.
    For now, the economy is riding largely on the backs of consumers. Consumer spending, adjusted for inflation, increased at a 2.2% rate in the fourth quarter, up from 1.6% in the third. That included a jump in spending on durable goods, which are big-ticket items such as cars and refrigerators.

    One thing that is helping consumers: They are starting to see substantial income gains after years of stagnation. The GDP report showed after-tax income rose at a rate of 6.8%, adjusted for inflation, the fastest pace since the recession.
    Last edited by Zippyjuan; 01-31-2013 at 01:44 PM.
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  8. #7

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    The U.S. was hurt by the biggest cut in defense spending in 40 years.
    If only that were true... I'd take lower GDP every month if it was only due to reduced govt input!
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  9. #8

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    If we don't get some increased war spending here soon were gonna deflate like a balloon

  10. #9

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    Nobel Peace Laureate Obama has broken the all time record for Military Weapons Sales all 4 years in Office.

    Obvious much of this is laundered money through the Department of State with so-called USAID packages.

    Washington has run up $300 Billion in Debt in the first 3 months of FY2013 could of been worse, as many cashed-in investments to avoid the tax increases in Dec 2012(reflected in Treasury's report on increase of tax collections for December/End of Tax Year).

    Geithner has stopped making payments in the federal pension fund, that's more borrowed money that has to be repaid.
    Last edited by HOLLYWOOD; 01-31-2013 at 03:14 PM.
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  11. #10

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    Quote Originally Posted by Romulus View Post
    And look what they blame..
    The fact that military spending is included at all makes the data worthless.
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    oh noez! idle resources....

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    Quote Originally Posted by Zippyjuan View Post
    Most of it was blamed on companies holding back on doing anything while they waited to see what was going on with the Fiscal Cliff issue. Defense spending was lower after a huge surge in October (last month of the fiscal year) and that dropped off as well. Things are expected to rebound next month.

    http://online.wsj.com/article/SB1000...039517142.html
    I could be wrong, but I do not think there will be a bounce back in Feb.

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    Quote Originally Posted by Michigan11 View Post
    If we don't get some increased war spending here soon were gonna deflate like a balloon
    "Forward"

    let's invade Mali and Syria.

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  15. #14

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    figure in an 8% inflation rate and that makes the negative growth rate over 8%.
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    Quote Originally Posted by Mike Mitrosky View Post
    figure in an 8% inflation rate and that makes the negative growth rate over 8%.
    ^^^ Wins Thread ^^^
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  17. #16

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    And this is with $1 trillion+ dollar federal deficits, the fed printing $85+ billion dollars per month, and zero % interest rates.

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    It's a good thing housing is surging!

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    Quote Originally Posted by Mike Mitrosky View Post
    figure in an 8% inflation rate and that makes the negative growth rate over 8%.
    Source for 8% inflation figure?
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  20. #19

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    Quote Originally Posted by matt0611 View Post
    And this is with $1 trillion+ dollar federal deficits, the fed printing $85+ billion dollars per month, and zero % interest rates.
    That's the frightening part, in my opinion.

  21. #20

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    Quote Originally Posted by Zippyjuan View Post
    Source for 8% inflation figure?
    Ron Paul posted a chart showing the recent years of counterfeiting and my charts are behind the times but lets try getting our own numbers.

    http://www.ronpaulforums.com/showthr...in-Circulation






    If they double the money supply by counterfeiting, the dollar becomes worth half as much. You could recreate the same inflation by printing up twenty-six times the money we had at the baseline.

    I sort of figure inflation is more like 8%. Here is how.

    If you take the $5.00 as a base figure and double it you get $10.00. That is a 100% increase.

    If you take the $10.00 as a base figure and double it you get $20.00. That is a 200% increase from the original $5.00.

    If you take the $20.00 as a base figure and double it you get $40.00. That is a 300% increase.

    If you take the $40.00 as a base figure and double it you get $80.00. That is a 400% increase.

    And you still have a ways to go. All of that has happened in about the last 50 years.

    So like I say, "I sort of figure inflation is more like 8%."

    If you go to a bank website and use a calculator to see what the change is it comes out to over 500% and 10% a year. I figure what is a couple of percentage points like 2% a year; UNLESS IT'S A 2% THAT IS A FLAT-OUT LIE.

    If there had been any truth to their 2%-a-year inflation the gasoline that was 17 to 25 cents would now be running at about 34 to 50 cents a gallon after fifty years.

    http://www.opednews.com/articles/Hap...30131-295.html
    Last edited by Carson; 02-01-2013 at 07:03 PM.

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    This can be a good source for numbers (figures are percent change compared to same month a year before- they have longer time period charts as well):
    http://inflationdata.com/inflation/I...tInflation.asp

    Inflation Rate in Percent for Jan 2000-Present

    Our Inflation rates (see table below) are calculated to two decimal places while the government only calculates inflation rates to one decimal place. Therefore, while being based on the government's index our data provides a "finer" view. January and February 2005 is a perfect example, according to the government statistics both months had an inflation rate of 3%. In January however, our data shows it as 2.97% and February shows as 3.01%. Therefore instead of the inflation rate being "flat" it is actually rising slightly. In another example we see August 2003 and September with the Government saying the rates were 2.2% and 2.3% respectively. This would lead us to believe that inflation rose .1% during that period. In actuality however, it rose from 2.16% to 2.32% or a .16% increase, substantially more than .1%!

    The Inflation rate table below is updated monthly and provides the current US Inflation Rate plus Monthly Inflation Rate data back to January 2000. The Inflation rate is calculated using the Current Consumer Price Index (CPI-U) published monthly by the Bureau of Labor Statistics.
    Their latest figures show a rate for December 2012 of 1.74% compared to a year before and indicate an average for the entire year of 2012 of 2.07 (averaging each monthly figure).
    Last edited by Zippyjuan; 02-01-2013 at 07:05 PM.
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    Quote Originally Posted by Zippyjuan View Post
    This can be a good source for numbers (figures are percent change compared to same month a year before- they have longer time period charts as well):
    http://inflationdata.com/inflation/I...tInflation.asp



    Their latest figures show a rate for December 2012 of 1.74% compared to a year before and indicate an average for the entire year of 2012 of 2.07 (averaging each monthly figure).

    From your own website;

    To Calculate a whole year
    use the same month, i.e., Jan. 2010 - Jan. 2011 gives a full year.
    Jan - Dec only gives 11 months. (Do not select current month)

    Cumulative Inflation Results

    Total inflation from January 1969 to January 2012 is 536.70%

    Or about 12% a year.

    http://inflationdata.com/inflation/I...alculator.aspx

  24. #23

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    Quote Originally Posted by Carson View Post
    From your own website;

    To Calculate a whole year
    use the same month, i.e., Jan. 2010 - Jan. 2011 gives a full year.
    Jan - Dec only gives 11 months. (Do not select current month)

    Cumulative Inflation Results

    Total inflation from January 1969 to January 2012 is 536.70%

    Or about 12% a year.

    http://inflationdata.com/inflation/I...alculator.aspx
    537% in 43 years is only about 4% a year on average. And a lot of those years had much higher inflation than we have had lately, at least measured by CPI.

    1.04^43=5.40
    Last edited by erowe1; 02-01-2013 at 08:55 PM.
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  25. #24

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    Quote Originally Posted by erowe1 View Post
    537% in 43 years is only about 4% a year on average. And a lot of those years had much higher inflation than we have had lately, at least measured by CPI.

    1.04^43=5.40
    What does this mean? "1.04^43=5.40"

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    You may soon get to the point where a particular inflation number may not matter as much as what exactly is inflating. Remember these keys . Job growth is determined by business. The economy is driven by consumer spending . Now examining the facts, taxes will lower the bar for the people, regulation will lower the bar for business , health bill lowers the bar for all. Now you should arrive @ no growth, except Govt growth . The keys to inflation in America are what takes money away from consumer spending .Taxes , fees, fines , food , energy. If a guy uses three gallons of gas a day , five times a week @ $3, that is $2340 ayr , if he uses three gallons a day @ $4 five days a week , it is $3120 a year. The new fridge ( as an example ) is gone from the budget.
    Last edited by oyarde; 02-01-2013 at 11:29 PM.

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    Then , you must consider , if inflation is 5 percent , or whatever,( taxes etc ) wages will not keep pace , We basically are living in a time, when an ordinary person will make around the same and be able to buy less.....
    Last edited by oyarde; 02-01-2013 at 11:28 PM.

  28. #27

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    Quote Originally Posted by oyarde View Post
    You may soon get to the point where a particular inflation number may not matter as much as what exactly is inflating. Remember these keys . Job growth is determined by business. The economy is driven by consumer spending . Now examining the facts, taxes will lower the bar for the people, regulation will lower the bar for business , health bill lowers the bar for all. Now you should arrive @ no growth, except Govt growth . The keys to inflation in America are what takes money away from consumer spending .Taxes , fees, fines , food , energy. If a guy uses three gallons of gas a day , five times a week @ $3, that is $2340 ayr , if he uses three gallons a day @$4 five days a week , it is $3120 a year. The new fridge ( as an example ) is gone from the budget.
    wtf, I just went for a drive and saw the price of fuel up to $3.40 a gallon. Are you Indians in on this?
    Quiz: Test Your "Income" Tax IQ!

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  29. #28

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    Quote Originally Posted by Zippyjuan View Post
    Most of it was blamed on companies holding back on doing anything while they waited to see what was going on with the Fiscal Cliff issue. Defense spending was lower after a huge surge in October (last month of the fiscal year) and that dropped off as well. Things are expected to rebound next month.

    http://online.wsj.com/article/SB1000...039517142.html
    I hope you are right, I really do. I know eventually the house of fiat cards will fall, but I would rather it not happen right now.

  30. #29

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    Quote Originally Posted by Danke View Post
    wtf, I just went for a drive and saw the price of fuel up to $3.40 a gallon. Are you Indians in on this?
    How! The last time I recorded mine it was $3.599.


    Timeless sign.



    He could paint it on the building if he wanted too.

    Actually according to the Silver and Gold Payment Calculator gas looks a little higher low now (It's confusing). Back in the sixties the price held about 17 to 25 cents, if I remember right. Still pretty close to what real money's value is and has held up to over the years.


    Pay with silver…

    $0.15 face value of US Silver Coins worth USD $3.40 **

    http://www.silverandgoldaremoney.com/
    Last edited by Carson; 02-01-2013 at 11:46 PM.

  31. #30

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    Quote Originally Posted by Carson View Post
    Timeless sign.



    He could paint it on the building if he wanted too.

    Actually according to the Silver and Gold Payment Calculator gas looks a little higher low now (It's confusing). Back in the sixties the price held about 17 to 25 cents, if I remember right. Still pretty close to what real money's value has held up to over the years.


    Pay with silver…

    $0.15 face value of US Silver Coins worth USD $3.40 **

    http://www.silverandgoldaremoney.com/

    How! The last time I recorded mine it was $3.599.
    Quiz: Test Your "Income" Tax IQ!

    Short Income Tax Video

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of apportionment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

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