{"id":4306,"date":"2015-01-09T20:42:59","date_gmt":"2015-01-10T01:42:59","guid":{"rendered":"http:\/\/olduvai.ca\/?p=4306"},"modified":"2015-01-09T20:42:59","modified_gmt":"2015-01-10T01:42:59","slug":"empirical-proof-of-the-giant-con","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=4306","title":{"rendered":"Empirical Proof of the Giant Con"},"content":{"rendered":"

Empirical Proof of the Giant Con<\/a><\/h3>\n

I want to continue on with my recent focus on the giant con and if you\u2019ve been reading my work lately you\u2019ll certainly know what that is. \u00a0However, for those of you not familiar with the giant con, it is the idea\u00a0that our economy is growing when, in fact, it hasn\u2019t had growth in decades with the exception of the late 1990\u2032s. \u00a0In a\u00a0recent article<\/a>\u00a0I wrote for the benefit of Steve Liesman, I showed that the giant con is entirely a function of debt. \u00a0I explain why debt is actually a net negative given real interest rates and I strip out debt from GDP to show that GDP\u00a0has actually been contracting for some time. \u00a0Recently I\u2019ve been I looking for other ways to prove that\u00a0the giant con is truly happening. \u00a0But let\u2019s just have a quick look at what real GDP adjusted for Debt would like. \u00a0We see in the past 40 years the only period of real GDP growth was between 1996 and 2000 and has collapsed since early 2007 to date.<\/p>\n

\"Screen<\/a><\/p>\n

Most of us are familiar with the concept of money velocity. \u00a0It is a measure of how effectively or efficiently we are utilizing our money stock to generate output. \u00a0The idea is that the more I invest the more notional returns I can generate. \u00a0However, in the economy there is a downside to \u2018investing\u2019 with additional money supply, namely,\u00a0inflation. \u00a0And so we want to maximize the amount of output we generate from a given stock of money to optimize our returns. \u00a0We gauge this via money velocity and often we use M2 Velocity as the key measure. \u00a0Currently M2 Velocity is around 1.3, meaning that for every supply of dollar we are generating 1.3 dollars of output. \u00a0This is down significantly from the late 1990\u2032s at which time we were generating around 2.3 dollars of output for every dollar of stock.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Empirical Proof of the Giant Con I want to continue on with my recent focus on the giant con and if you\u2019ve been reading my work lately you\u2019ll certainly know what that is. \u00a0However, for those of you not familiar with the giant con, it is the idea\u00a0that our economy is growing when, in fact, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,353,391,536,2532],"class_list":["post-4306","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-gdp","tag-growth","tag-money","tag-money-velocity"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/4306","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4306"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/4306\/revisions"}],"predecessor-version":[{"id":4307,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/4306\/revisions\/4307"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}