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Thread: SHOCK: ECONOMY SHRINKS

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  1. #1

    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
    And look what they blame..

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

  4. #3
    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.
    There is only one success -- to be able to spend your life in your own way.
    -- Christopher Morley (1890 - 1957)

  5. #4
    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.

  6. #5
    huh. Right after the election.

  7. #6
    Why don't we get paul krugman to shed some light on the situation...
    "I'm tired of staring out at your vacant faces looking back at me, wanting me to fill your empty lives with humor you couldn't possibly think of yourselves." `Bill Hicks.

    Libertarian Apparel

  8. #7
    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.

  9. #8
    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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  11. #9
    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.

  12. #10
    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!
    "And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat

    "It is difficult to free fools from the chains they revere." - Voltaire

  13. #11
    If we don't get some increased war spending here soon were gonna deflate like a balloon

  14. #12
    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.


    We're being governed ruled by a geriatric Alzheimer patient/puppet whose strings are being pulled by an elitist oligarchy who believe they can manage the world... imagine the utter maniacal, sociopathic hubris!

  15. #13
    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.
    The American Dream, Wake Up People, This is our country! <===click

    "All eyes are opened, or opening to the rights of man, let the annual return of this day(July 4th), forever refresh our recollections of these rights, and an undiminished devotion to them."
    Thomas Jefferson
    June 1826



    Rock The World!
    USAF Veteran

  16. #14
    oh noez! idle resources....
    rewritten history with armies of their crooks - invented memories, did burn all the books... Mark Knopfler

  17. #15
    Chester Copperpot
    Member

    figure in an 8% inflation rate and that makes the negative growth rate over 8%.

  18. #16
    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 ^^^
    1776 > 1984

    The FAILURE of the United States Government to operate and maintain an
    Honest Money System , which frees the ordinary man from the clutches of the money manipulators, is the single largest contributing factor to the World's current Economic Crisis.

    The Elimination of Privacy is the Architecture of Genocide

    Belief, Money, and Violence are the three ways all people are controlled

    Quote Originally Posted by Zippyjuan View Post
    Our central bank is not privately owned.



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  20. #17
    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?

  21. #18
    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

  22. #19
    Chester Copperpot
    Member

    Quote Originally Posted by Zippyjuan View Post
    Source for 8% inflation figure?
    8% is a pretty conservative estimate...

  23. #20
    Quote Originally Posted by Mike Mitrosky View Post
    8% is a pretty conservative estimate...
    Source?

  24. #21
    Quote Originally Posted by Mike Mitrosky View Post
    8% is a pretty conservative estimate...
    Quote Originally Posted by Zippyjuan View Post
    Source for 8% inflation figure?
    Quote Originally Posted by erowe1 View Post
    Source?
    I can't say where Mike Mitrosky got his figures but they seem closer to what we have seen on life's road.





    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. (And a Lie probably figure like a compound interest rate.)

    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


    I believe an inflation rate is added to the next year from year to year. I don't see it as something you calculate at a compound interest rate.

  25. #22
    And this is with $1 trillion+ dollar federal deficits, the fed printing $85+ billion dollars per month, and zero % interest rates.

  26. #23
    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.

  27. #24
    It's a good thing housing is surging!



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  29. #25
    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.

  30. #26
    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

  31. #27
    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.

  32. #28
    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"

  33. #29
    Quote Originally Posted by Carson View Post
    What does this mean? "1.04^43=5.40"
    It means if you multiply 1.04 by itself 43 times you get 5.40.

    Therefore, 4% annual interest compounded over 43 years comes out to a total of 540%.

  34. #30
    Quote Originally Posted by erowe1 View Post
    It means if you multiply 1.04 by itself 43 times you get 5.40.

    Therefore, 4% annual interest compounded over 43 years comes out to a total of 540%.

    Thanks! I can barely count to potatoe.



    That sort of sounds like a formula for compounding an interest rate. I don't think adding a yearly inflation rate to another years inflation rate by compounding it is proper math. I think the key word is add.


    Another area in all of this that I have a difference of opinion is one about the thing about a mandate on holding fiat to a certain percentage. Some say it is 2% lately. I've also heard 4%. They seem to think a fiat currency can work thinking this mandate is a yearly sum. Why not monthly?

    If I was trying to maintain the value of a fiat I would try and hold the mandate as a plus of minus two percent period. It would have to be held to a standard of weighing it against numerous unregulated commodities. If done correctly it should be able to stand up to competing currencies.

    Sure people could try an manipulate where it was set in relation to other items it was being held to. Just the honest working of a monetary system requires many commodities to fall out of favor or rise. Every commodity needs some flexibility to react to the markets. With enough being used as a standard we could end up with a working system of fiat.

    I think for simplicity I'm leaving out more of the equation by just mentioning commodities. I'm sure if we worked on it we might come up with other things to weigh against.

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