True GDP Q4 2009
True GDP in Q4 2009 has fallen to $10,655 million gold ounces, a 15.2% drop from the previous quarter.
True Consumption as Percentage of GDP
The true consumption ratio will need to come down significantly before a true alignment of resources in the production structure toward a recovery will be possible.
A close up to the years 2000 through now:
Government stimulus and bailout programs since the beginning of 2008 have fundamentally accomplished one thing: The ratio of the production of consumer goods versus factors of production has been bumped up for a little while.
Road to Recovery?
Contrary what the government says, they have not lead us onto a “path to recovery”. In fact, they have done the exact opposite! They have used all means at their disposal and all the force and dedication in the world to pull people in precisely the opposite direction.
This is the outcome of all the corporate bailouts, the cash for clunkers program, the 10,000 tax credit for homebuyers and what have you. Instead of abstaining from producing overproduced consumer goods and re-aligning toward capital goods, businesses have thus continued to produce excess trash and continued to engage in overly risky activities.
The payback for supporting this nonsense will be a double dip recession, Uncle Sam sends his regards.