US GDP Numbers are too high. Why is that?
ZeroHedge Notes the Fed may have been hiking into a recession after all
“These GDI/GDP revisions…could make us think differently about the US economy… especially if the Fed kept hiking even though true GDP was flat, if not outright negative”
-Jim Reid, DB
Housekeeping: Just reread a ZH post on GDI and GDP that is very pertinent now. That free post is here, and excerpted at bottom.
If history is listening, this topic will become increasingly talked about if (when?) we get a recession for sure. It will also be relevant this election year when looking at the interest payments paid by our Federal Reserve; a good chunk of which goes to banks using the RRP facility effectively being paid to not lend money out.
Our GDP Numbers are too high. Why is that?
Sections:
What is the difference between GDP and GDI?
First a little more detail on GDP and GDI
Why Do We Use GDP Then?
The Fed is Paying Interest
Banks Aren’t Supposed to Make Money As the Fed Hikes. and Yet…
Bottom Line: The GDP Revision Effect
The following lays out in reasonable terms what that means, why it is happening, and how it changes perception (aka uncover the harsher reality) of our economy. It is a current event and pretty important as the data starts getting revised downward so close to an election.
We thought this may interest Founders.