FIrst Quarter GDP Declined 1%

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The first revision of Q1 GDP showed  that GDP declined 1%.  If you strip out inflation, the contraction would be even more severe.  The original Government Q1 estimate showed a .1% increase, before inflation is stripped out.   Forecasters were expecting the revision to show a .5% decline.  It came in at -1%.   You can read Forbes’ reporting of this here:   Recession Time.

Of course, in it’s infinite Einsteinian wisdom and superlative willingness to spin the facts, Bloomberg News is reporting that negative GDP number does not mean a recession.  I guess they have their own “special” dictionary of economic definitions.

You tell me, does this look like a recession has set in (source Forbes, edit in red is mine):

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Let me correct one mistake in the title of that graph.  It says “real” GDP.  But the number that’s being reported is “nominal” GDP, meaning it includes price inflation.  If you strip out the price deflator used the Government of 1.3%,  “real” GDP would -2.3%.

Bloomberg is also blaming the bad number on “the weather.”  Oh, the dog ate my homework.  But we know that’s not true because the retail sales and housing numbers continue to decline month to month this year through April.  Sorry Bloomberg/media, April had great weather for the most part.  Was it too sunny out to go shopping or look for a home?

The real economy is contracting even more quickly than the rigged Government numbers show.  Retail sales are plunging, with both shopping mall and online sales registering declines.  Real average weekly income is declining, inflation is heating up and more people leave the workforce everyday and take out student loans to enroll at OnlineUniversity.com.

It’s going to get very ugly in our system over the next several months.  If you own gold and silver in your possession, hold on tight and add.  If you don’t own any, may your Higher Power – whatever you call it – have mercy on your soul…

 

20 thoughts on “FIrst Quarter GDP Declined 1%

  1. “Bloomberg News is reporting that negative GDP number does not mean a recession. I guess they have their own “special” dictionary of economic definitions.” along with msnbc, cnn, etc. That’s because, when the stock market crashes, the first ones out the door will be thw winner while the rest will be waiting outside soup lines to get fed. Since so many investors are using credit (debt) to finance their investment portfolio, credit will really dry up this time.

    “Let me correct one mistake in the title of that graph. It says “real” GDP. But the number that’s being reported is “nominal” GDP, meaning it includes price inflation. ” I remember reading last year that the Feds were going to use nominal GDP instead of real GDP starting Jan. of this year so you are correct, Dave. It’s going to be this way from now on.

    I’m seeing major retailers – including groceries chains – close down stores and consolidate the ones they have. employees wither get moved to another location or laid off. This indicated a retraction, not an expansion of economic growth.

    Keep up the good work, dave. Your insights are always welcomed!

  2. Anyone who is half aware knows inflation is much higher than the official number, which means “real GDP” is probably much lower than -2.3%. But how seriously can we take this whole GDP concept? Government can borrow or print money, spend it, and call it income? Isn’t this bringing forward future, real, productive income of private producers and counting it today? After all government doesn’t produce anything and is a massive net cost on the economy, beyond what they tax and squander . How can this be treated as income?

    1. It can and will be called anything their spin doctors think will keep the sheeple happy. It doesn’t need to have any basis in fact. To paraphrase our Dear Leaders–“Dude–what does it matter?” Move along folks, nothing to see here. By the way, your papers , please.

  3. Dave, remember, too, that these last two or three quarterly GDP readings were the first ones in which they included ludicrous, arbitrarily chosen adjustments for “intellectual value” (or some such term like that).

  4. I’ve been watching all of the “experts” like you, Schiff, Faber, and company for some time. I’ve come to the conclusion that all of you are equally worthless, if not harmful. My bone to pick is not the fall in price for silver and gold, although all were wrong in not seeing it coming. My complaint is your failure to admit your uselessness in the face of global fascism. To think that your payday will come when the artificial manipulation stops and gold explodes is foolish. Your posts pertain to corruption, more or less, just as much as they refer to “investment”.

    Do you really think your paper shares will be honored in the next phase of counter-party risk? I mean, do you have an army of soldiers at your command, Dave?
    What’s your next step to counter government corruption, other than writing a really damning blog article about it.

    Good ideas, rule of law, and whatever else go by the wayside as totalitarian government sets in. Thanks to Dave Kranzler being so darn smart, we’ll all come out set for life. LOL

    1. Ok Einstein. You don’t want to know what I really think. I don’t know anyone who wants to know where I really think this is headed. I’m trying to give people hope. What are you doing? You are doing nothing USEFUL.

      You’re a real brave man hiding behind your initials and anonymously emphasizing my name and taking pot shots at my views, but at least I’m trying to bring the truth to people.

      You’re the guy in Nazi Germany who told the SS when they came and knocked on your door where every Jew was hiding in your neighborhood. And after they left you had to run into the bathroom to change your underwear and wipe the diarrhea off your butt-cheeks.

      If you don’t like the content of my blog, then don’t read it. You still have that choice in this country. I don’t see you offering help or solutions.

      1. Well, you are partially right. I accept your criticism and present my full name as Michael Stephen Kochel Jr. No more anonymity. I’m not here to attack you per se, I’ve had some tense conversations with close friends about politcs for some time, and even amongst those with whom I primarily agree with, there is intense division on “where do we go from here”.

        I live in California, and about one month ago I awoke to the news that “Bailout Boy”, Neil Kashkari, is running for governor. I saw that he is endorsed by Mitt Romney, amongst other RINOs who are part of the establishment.

        Long story short, I am working on entering politics in some form. I have come to view bailouts and subsidies (crony capitalism in general) not as a political issue, but as criminal, treasonous theft. I’m working on ideas on how to present this in a political forum, but I assure you that I will not be stewing anonymously while our country is stolen much longer.

        I think that the Tea Party and working class Hispanics might BOTH like the idea of debt repudiation so that taxes can service people and not Wall St. debt. I’d like to take out both Wall St. and the Union Brass at the same time by demonstrating both to be parasites.

        1. Thanks for coming clean. Fuck Kashkari – he’s as corrupt as any of them. Don’t waste your time with politics. Enjoy what you can, as much as you can, while you can.

          What’s unfolding is not changeable. The die is cast. Alea iacta est. The only people who understand what’s happening who think there’s a good outcome are the people who have kids.

          People like me who don’t have kids are more capable of accepting the full truth.

          I don’t write about what I really believe is going to unfold because no one will read it. They’ll mock me, just like I was mocked in late 2004 when I sold my McMansion and said “we’re near the top.”

          Read “No Country For Old Men” and then “The Road” in that order. Then you might understand where I’m really coming from.

          We’re deeper into Orwell’s vision than any of us realizes…

          1. What fascinates me is that Kashkari’s challenger, Tim Donnelly, is winning with $11,000 in his war chest, pocket change. Kashkari is spending his own ill gotten gains and is still losing as far as I know. The primaries are on June 3. There is a small vocal minority of small business people who are just rabid for Donnelly for having the guts to stand up on some serious issues. I don’t think he knows much about economic theory and the dirty details of the bank bailouts. Most politicians only pretended to care about the bailouts.

            It’s just one of those things, Dave. Where you see despair, I see hope and opportunity. I never realized just how big of a political vacuum there is for non establishment politicians in California. Hardly anyone is trying to occupy that space in my opinion…

          2. I wish you luck, for sure, MK. But there’s no changing what’s already been pre-determined. It won’t unfold the way the pre-determiners want it to unfold, but it’s headed into an uncontrollable vortex.

  5. Dave,

    I don’t understand why they even need to report a negative number. Why don’t they just fudge it like everything else? Maybe, I’m extremely naïve, but if this were a true propaganda campaign they might as well report that everything is doing awesome, and all of us are getting rich off of the stock market.

  6. dave, i would actually be very interested in where you think it’s headed. i do have kids and i worry greatly for them and my friends. judging by the books you listed, i would say you think there will be utter devastation. anyway, i appreciate what you write. i don’t think people understand just how dependent we are on centralized everything – food, education, etc, etc.

    1. I think if the geopolitical situation doesn’t deteriorate into “The Road,” we are headed for a system in this country that is completely Totalitarian, with a .5% Aristocratic Class and a 99.5% Serf Class. The dollar is going to collapse sooner or later. Think about what the implications for that would be to our economic system. Imports will be unaffordable for all but the wealthiest. This country imports something like 60% of what it consumes. Imagine if that just stops. There will be widespread Mad Max style violence and that’s probably why the Dept of Homeland Security was established and has grown more invasive in our lives, it’s why the Detainee Bill was passed by Bush and the codified by Obama, it’s why the various Govt agencies have been stockpiling lethal ammo and weapons, it’s why Obama approved the use of military force on civilians.

      It’s been confirmed to me from two different completely unrelated sources that the Pentagon/Defense Dept – specifically – know that the collapse of the dollar can’t be prevented. That’s why Rickards has been pimping – on behalf of the Pentagon – the notion of an IMF SDR to replace the dollar. The SDR would contain the dollar and it would enable the PTB to kick our can down the road a bit further.

      I believe there’s no way in hell the BRIC consortium will agree to that. They are slowly and methodically plotting a new gold-backed currency.

      1. Dave,
        Hecla guy here. (No longer own it BWTH.) Speaking of the Road or the future if you can I highly reco that you access the Portland Oregonian newspaper for the past two days and read the front page articles on law enforcement or lack of it and the lawlessness in the rural counties of Oregon. I know the articles to be well written and factual as I have lived here over 50 years and grew up in and around the counties mentioned as did my wife and her family. All 4 parents of ours and my wife were born in Oregon, I am the exception a Spud, so we know the state well.

        Again highly reco’d as they paint a very clear picture of no money for Sherriff deputies, rise in property and assault crimes and the shutting down of jail beds, etc. Some areas now have no patrol and felonies are not even being prosecuted what so ever.

        Tom

      2. There are many angles to consider, Dave. When the dollar collapses, where will loyalties lie? I think the chaos you describe will unfold, and many have been prepping for a fedgov martial law scenario for years. I can say you are dead wrong in applying a broad generalization to people with kids. You need to also look at demographics. For example, all over the Portland area, you see vegetable gardens all over in people’s front yards. Some people are already establishing barter networks. People are learning and then teaching their kids how to can and preserve fruits, vegetables and meat. I’ve seen websites just full of common sense for preppers, not just the crazy gun shit.

        Other possible good outcomes include local law enforcement taking a stand in and for their communities. Currently, fedgov dangles carrots like excess military gear and other grants. Once the dollar collapses, with what power can fedgov bribe localgov.? Loyalties shift as power shifts.

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