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Some GDP cycle thoughts

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#1 gm_general



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Posted 13 January 2018 - 02:31 PM

First I had to annotate the Shadowstats chart to illustrate so I am linking the source here:




I was looking at the chart and some things occurred to me:


1. The "as reported" trend is diverging increasingly with the "1990s inflation adjusted trend". Note these are percentage deltas of GDP year over year.


2. It appeared to me as if there are alternating periods of two types. In one (green border, labeled "peak-tough period") the GDP change peaks and then swoons precipitously and reaches a low. In the other (blue border, labled "putzing around period") the change in GDP tends to oscillate in place. We are in the "putzing around period now.


3. So far, the second instance of a comparable period was slightly shorter in time than the first. Not enough data to make any conclusion about this. 


4. GDP change is trending in a direction that does not bode well no matter which method of calculation is used. This is because of debt service costs taking money away from productive purposes I believe. Currently total US debt excluding unfunded liabilities is about $68T (as of Q317) and yearly interest charges are about $2.5T.