True GDP – Q2 2010

true-gross-domestic-product-2010-08-06

The True Gross Domestic Product in Q2 2010 has dropped by 8.77% from last quarter. It is at its lowest point since Q3 1988 and thus marks a 22 year low.

What about the ratio of consumer goods vs factors of production turned out in the US at this point?

us-true-consumption-as-percentage-of-gdp-2010-08-06

This quarter it looks like the relative rise in consumer goods production, induced via various misguided government stimulus measures, has been reversed and the ratio is once again trying to get back to more sustainable levels of consumer goods vs. capital goods produced.

This is a good sign but it’s still a long way down from here.

Historically, this ratio needs to fall at least below the 89% avg., and probably a lot lower before we can speak of any meaningful correction and ensuing recovery, if there is to be one at all any time soon.

The government, so far, has done everything it can to not let this recovery occur. Instead, as I have pointed out many times, it has beautifully set the stage for a Great Depression 2.0.



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