i found out about what the u_s_ government had planned before revising

the methodology for computing g_d_p_

just this morning

i was reading this piece in it the financial times

u_s_ economy gets a hollywood makeover

and the idea is to change

the way they can pw g_d_p_

the result is going to be a much bigger g_d_p_

uh... what a coincidence

you see that's what the government does write whenever they don't like the

results

the changes in that but al ology

for calculating

those results

see when it comes to inflation

the numbers were to hide in one of them small

so they change the way

they calculated inflation and the result is less inflation

accorded the government

third they've been doing the same thing with g_p_ this is not the first time

they have changed the way the compute g_d_p_

within goal of producing a larger number

this is exactly what they've done

now doesn't mean the economy's actually any bigger

but they can pretend it's bigger

now why does the government of pretend the economy is bigger what did it really

is

well you know just like any kid you know

he'd like to pretend that he got an a

now even though is you know he he's he's getting a lower-grade right it's good to

pretend that you're doing better than you are

and that we're gonna do and why do we want to attend were doing that are

because then it will make that debt look smaller

if we can claim we have a bigger connie

then we can claim we can handle it that

and maybe some of our creditors will be dumb enough to believe the hype

but let's look at what they're going to be changing

in the uh... the the g_d_p_

well most of the changes are gonna com to the investment business investment

member g dot

g_d_p_ is c

applause

g plus arctic plus net

out trade

and the i is business investment

well the government is now going to count things as investments

network out of the four

and that not any other country on the planet earth counts

so we're going to the only country in the world

that's going to include this

in our g_d_p_ calculations

which means

that it makes the comparison between our g_d_p_ in somebody else's

you know now it's an apples to orange comparison

begins work county stop that they're not

so what is one of the things that we're gonna count

r_n_d_ spending research and development

so everytime accompany spends money on research and development

it's getting count as if they build a factory or something

but r_d_ spending is not an investment

and at if you look at gap accounting

if the company spends money on research and development

it expenses it writes it off in the year it spends it

if youu

invest money on building a factory

you don't write that off you depreciated over time

but is an investment if it doesn't get done you know right off in the current

year

but you do on your expenditures now

summit will say will research and and and and and develop it is important to

any could increase

the long-term profitability of a competition night

and hence the research and development is successful it may very well lead

to business investment

maybe the research something

they they discover something they figure out something and now they have to

invest in plant equipment

two-day-old

what the research came up with right so you're still gonna get it in there

plus when you're most of the r_n_d_ is salaries a lot of it is paying people

and of course that's already in the g_d_p_

because they spend that money

right i mean the people that they that they bright paychecks to be

the researchers

but the probably trying to capitalize our claim that it's an investment

is because it's not because a lot of the research and development

is a waste

a lot of times

uh... they end up with a dead end or maybe they develop a product that nobody

wants or the research shows that they shouldn't do something

but one of the big items as can be captured in this

is the research that's done by defense contractors

in trying to figure out

how to build better bombs

now why should that research be considered an investment

his academic economy any bigger

because of budget military bunch of no narrow space companies are spending lots

of money

trying to figure out how to make better bombs i mean of course

what a what if they don't look at the retreat salts

are the bombard even any better

but they spent it on research but these are expenses they're not investments

but the government to treat them as expense of course

they're not going to treat them as expensive for tax purposes

because then keep them then companies would not be able to do is much r_d_

but they're gonna treat them that way for g_d_p_ but it's also gonna make u_s_

corporations look more profitable

because now their profits are gonna have to be reduced

by their r_d_ spending of course they will for tax purposes so it's it's it's

you know the it's another line

that it even gets worse

when it comes to

uh...

spending money

are produced a motion picture

or television show

to write a book

or even a greeting card

uh... poetry

painting operatives thing works of art

all of this now is gonna be included as investing

so it you know when they showed a television show

that's getting count as an investment

just like building a factory anne commodity crazy

now they're trying to claim that this is true

because when you invest in a live wary of entertainment products like

television you could sell these products for years and years and therefore it's

an investment

and they're using seinfeld as an example of

investment that give the money did produce seinfeld

should've been considered an investment

because of all the money that they're able to burn

uh... you know in syndication well you know for every seinfeld

is probably a hundred shows that are canceling the first season or never even

get picked up

they did that that that they've been patient a pilot

and not even going to be set up

so how are these investments

it's a complete loss

every time somebody shoots

eighty eight a movie that's consider making an investment

relook when someone writes a book

was someone good records of our song

i mean this is not says to say that one of band

records of song that that's an investment that investigating

they're making music does that uh... that's that

now sure they might be able to sell

uh... that's on about what it what it thus on space

one of nobody buys it

undeniable because of service

to try it out this

as an investment meanwhile is already in the g_d_p_ anyway

if the news this end

records album

people buy it is spending you spent money on the album

the musician cards the money

now he spends it on

you know what drugs in sports cars that whatever he the musician is by

it's still in the g_d_p_

to say that we got a count it as an investment

some guidance writing poetry is make investment

the article even said that is greeting cards that when someone writes a

greeting card

that's a that's a look are making an investment right now

i am recording dictatorship show gee that's an investment

a court of the government

i'm investing

right now

because i am creating content

on creating something that i can sell in the future

i can license so therefore

the act of doing the peter schiff show

should be counted

as an investment

in uh... in g_d_p_ that i how they get a figure it out

what kind of value in the old was signed

uh... to something like this one what about what a guy writes a book

you know he takes time offer workers in his spare time he writes a book

now the government says that's an investment

how much is the investment

was nobody ever reads the book

i mean the whole thing is nonsense ready i think i can write poetry all iran

is an investment

you know they'd be lousy palms

i how how they were declan that my poetry

i somehow amounts to an investment but that of the government's acclaim

because they want to make the g_d_p_

will bigger but let me go to some other changes one of his in pension accounting

but the kids the water they wanna make this change

well i think this has to do with government spending

because when the government spends money

part of the government expenditures are the salaries had to pay is right to all

of

is workers

and part of that salary

is the patients

now as of now

the way they calculate that in g_d_p_

it's based on what the government actually pays you

now part of compensation could be in a pension

and then they count

the amount of the contributions of the government puts

a palace in dollars

you know in a given year

into a pension on behalf of the

employees

even though the employee does he get the money

it still counts is that

a government spent the money because they wrote the check for thousand bal

i'm

so it's part of the g_d_p_

now what they're going to do is they're not gonna base the spending

on what they pay

but what they promise to pay

so in other words that the government promises to pay two thousand dollars

worth of pension benefits

but only funds one thousand

where they calculate g_d_p_

they're gonna calkins count the two thousand dollar promise

not the one hundred thousand dollar actual payment what what i did not

senses that what they promised me a million dollars what they promised me a

trillion dollars

who cares what they promised

if they can't possibly meet the promise why should be counted in g_d_p_

and other words about a compiled list as wherever a once

and our g_d_p_ can go through the loan

based on a budget anti government promises i mean who came up

with his hair brained idea

that we should give credit

for what government says they're going to do

even if they can't do it and they're not doing it amid a whole thing is not says

no

apparently there might be some

federal

uh... expenditures that are adjusted down

based on this

but the vast majority

of expenditures will be

going up which is exactly why they're doing that the government is not going

to calculate

a particular g_d_p_ change

that is going to make the g_d_p_ smaller

there's no

vested interests for the government to do that

they want to govern the g_d_p_

to look big

so there are only

going to be introducing changes

where the net effect is to make the g_d_p_ larger

that'd otherwise

would have been here's one of the other changes

uh... they are going to start to include

certain expenditure is that you incur when you buy a house

and they're gonna add that

into the

g_d_p_ figures

now what is what does that have to do with investment

you know provided cited by house

how is that business investment and what about you know what

what is that the bill that

what they're gonna do going forward is when you buy a house

to the extent that you need an attorney

to help work on the closing of course a lot of people averell state attorneys

and they pay legal bills i'll when they buy a house

well these legal bills are now going to be included

has an investment and added extra into the g_d_p_

what by

the fact that i

have to pay an attorney

wise how is an investment

how is the country

uh... in better shape how are we at better able to produce more business

future

because my legal bills went up

in here now

and of course is not just legal bills apparently all of the administrative

costs

associate

with buying a house including taxes that you may pay on the transaction for

closing all those costs

are now going to be included

in that investment

why

lap i wud evidence in

is that an investment and and i try to look for their and the article said

that will often till this point the only part of the role state transaction that

was considered an investment

for calculating g_d_p_

was the commission that you pay the realtor

whyy

why is paid a realtor

a commission

why is that an investment

at a house that any different

that that that that day and uh... that than anything else that you might buy

from somebody any other

how's it different than the commission's you pay when you buy a stock

manure you're investing money when you pay a brokerage commission

i mean or a realtors commission what if someone buys a house

and there is no commission where they just buy it from a friend

that that that reduces the g_d_p_

so you increase the g_d_p_ so when brokers increase their commissions

that means the investment is competent they lower their commissions which

obviously would be a good thing right

if commissions came down what are the only played a four percent commission on

a house a set of a six percent

that supposedly the track

from the g_d_p_ because now it's on it's not a big as bigan investment but

obviously uh... you know this is going to pad the g_d_p_ with all the uh...

roast a transactions imagine how much brokerage commissions added to our

g_d_p_

during the housing bubble

there's one more

little change out of how many there are this is just

the changes that this particular

journalists is focusing on and by the way my brother try to contact is

journalist anne emilie belittled it by saying well you know it doesn't really

grow g_d_p_ ca some changes are negative even though the whole article points out

that is gonna add three percentage points

the g_d_p_ here

you know it's ok of course in dance and that increase but they want to close

their eyes to what should be obvious that the government is just lie

about this kind of stuff

here is some another changed its in this thing and apparently this is getting the

for the deflator

right when they try to calculate inflation the government is going to

come up with a new way of majoring in cost

of bank's services and having a bank account

no doubt the goal they are

he is to reduced

the cost component of banking

so that the inflation number will end up being lower so the government is finding

a way to make the g_d_p_ bigger

by both throwing things into the g_d_p_ that don't belong there

and by making a different or smaller so that they can make the the real number

appear to be bigger

fragment brother sent me and i get a lot of these from people in the mail

sent me uh... is uh... indication of inflation is real-world

i he had a bottle of uh... as spring

uh... volcanoes its engine eric wright eight aspirin

five hundred pill bottle materiality just ran out

and the this figure on the last bottle

was thirteen ninety nine

and a new model for the same number of pills of the exact same generic aspirin

now cost eighteen twenty nine

and of course he's had it for a few years but he's looking at the expiration

dates on both so we can pretty much

guess about how much time has fifty-two transpired

between the thirteen ninety nine model

and the eight twenty nine model

and according to my brother it translates into a ten percent increase

in the price of those aspirins

per year

are over the time period on a short sees that same ingredients nothing is really

changed

in the ass for it's just another anecdotal evidence

of a price increase of about ten percent per year over the past three or four

years

not be one-and-a-half percent increase that the government claims and i know i

not be one-and-a-half percent increase that the government claims and i know i

know there's all sorts

of anecdotal evidence is that what you peter you can't you can't just find one

thing

it's not just one thing it's almost everything find me something that isn't

going off

in price attn

here finally things are going up accorded the c_p_i_ hour by those things

you know

disturbing to you by your going up much faster then the c_p_i_ they don't

actually sell c_p_i_ units

uh... they actually sell real things

and prices are going up and now of course it's gonna look like the economy

is getting bigger uh... even though it isn't and this is just more flop on top

of flopped

our g_d_p_ is one big y

who knows are what it really is but it's a lot smaller than what the government

claims

which means our deck in g_d_p_ numbers

or already far bigger

uh... than anybody cares to realize and why that's important

is because the real g_d_p_ gives you the ability

to service your debt

but if you have a bs g_-eight g_d_p_

that's artificially inflated

based on creative accounting that'd it does it mean the economy is generating

the income necessary to service

all of that debt