Chart Of The Quarter: $312 Billion In Debt "Adds" Negative $5 Billion In GDP

Tyler Durden's picture

What was it about the law of diminishing Fed stimulus returns again? But don't worry: "the market is up." Because if $165 billion in Q4 stimulus could not even generate a positive GDP return, at least it sent the Russell 2000 soaring.

Source: BEA, Treasury Direct

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Stackers's picture

I'm not worried. Silver is up.

dwdollar's picture

Diminishing returns leads to hyperinflation bitchez.

Acet's picture

Bullish! This just means MOOOAAAR debt is needed.

Mr Scotty, I need 110% speed on the printers!!!


Stackers's picture

I'm give'n her all she's got cap'n

Pool Shark's picture



"Ludicrous Speed!!!"



Shocker's picture

Thanks ZH, that simple graph / picture explains everything.

All this stimulus, QE, Bailouts and still can't get this recovery going.

Current Business Layoff/Closing List


trav777's picture

It's just a vindication for the real world folks.  We've been saying for years that MONEY and DEBT don't MATTER in a real sense.  They are SYMPTOMS, not CAUSES.

What matters to whether you can drive more people more miles is that you have more energy supply.  The debt is just a claim ticket.


Look at the US's history...1970, peak oil, 1970s...collapse, inflation, malaise.  1980s we get Prudhoe, suddenly it is morning in America.  Same debt arc.  If we begin producing again, we'll have the good times rolling.  Everything orbits around our ability to increase aggregate energy rate of production, or to decrease the decline.  The debt just FOLLOWS that.

Bernank and the rest of them really ARE trying to print oil by offering credit at nearly free prices.  But, those in the real world understand that there is NO AMOUNT of debt that can make a negative EROI somehow profitable in any real sense.

Spastica Rex's picture

The Real World is for pussies.

ShankyS's picture

Subtraction thru addition or is it addition thru subtraction - shit - they can't even get that right. 

SafelyGraze's picture

Acet says "Bullish! This just means MOOOAAAR debt is needed."


but you left out the prefatory phrase the solution is as simple as it is obvious.

economics9698's picture

Dr. Krugman, Dr. Krugman, we need your help here.  /sarc

TrumpXVI's picture

Captain, the warp motors are gonna' BLOW!

aint no fortunate son's picture

but but what about Sandy? I thought natural disasters INCREASE GDP! whaaaaaa!

wisefool's picture

Krugman was on Bloomberg monday. They put mittens on top of kit gloves to make sure he was comfortable. The hosts were careful to mention his credentials and titles without placating him too much. He only had to debate one other person, who was very, very civil.

Even with all that, he only stopped squirming and used his big boy voice for about 10 seconds in the whole two hours. "You know the greatest recovery in economics was WWII. Incredibly destructive spending" smiling from ear to ear.

I have respect for those who sacrified in that war (and all wars). And I am even old enough to start forgetting the evil machinations and false flags behind it. But it would be fantastic if we had scholars incharge of fiscal policy who can reference things that have happened after the 1940s.

Turin Turambar's picture

Since WWII was such an economic panacea according to Krugman, then why doesn't he simply advocate:

1.  US, UK, France, Spain, Germany, Japan,  et. al focus on rapidly expanding their navies with unprecedented building programs, kinda like during a war.

2.  After building these enormous fleets, the countries can then pilot them out to some agreed upon location in the Pacific Ocean, off-load all the sailors, and then sink all the ships!

3.  It'll be lots of fun.  Maybe it could be made a PPV event for some extra money, and SHAZAM! All the good stuff - stimulus, economic boom, good times are here again!- with no loss of life!

We'll all be rich, I tell ya!  And for the truly greedy (aren't we all?)  Rinse, repeat!  QD(quantitative destruction) 4eva.  Utopia is so close!

I know.  I know.  It's not nearly as exciting as an alien invasion.

wisefool's picture

That was basically mitt romney's plan for a 200 aircraft carrier navy. That way both him and Bush Jr. could get one named after themselves, just like papa smurf!

Problem is, people actually payed taxes for that stuff. Romney don't pay taxes. He gives to charities where he is a bishop.

When the pawn hits the battle, he thinks like a king.

Totentänzerlied's picture

"with no loss of life!"

Well then I guess we'll still have structural high unemployment and awful demographics.

Nothing fixes employment-to-population like killing large numbers of people!

Alien invasion, anyone?

midtowng's picture

Even economists expect the economy to be slower in the Q1. That makes two quarters in a row of contraction (i.e. a recession).

MillionDollarBonus_'s picture

This is just short term noise. The stock market has shrugged off this insignificant news and will soon be making its way to new all time highs. Professional fund managers recognize that despite this minor set-back, the long term fundamentals for the US economy are overwhelmingly positive. Here are just a few of the endless positive indicators for our economy:

  1. A strong housing recovery
  2. A rising stock market
  3. A plunging VIX
  4. Record low interest rates
  5. Record low inflation
  6. Record number of college-educated Americans

When will masochistic doomer libertarians on this site recognize that they are simply wrong about economic collapse and the impending apocalypse? When will goldbugs, silverbugs and bitcoinbugs realize that their dreams of becoming kings of the universe will never materialize?

EscapeKey's picture

And think, a net increase in debt means there's MORE CASH ON THE SIDELINES!

Who cares about tomorrow anyway.

Dr. Richard Head's picture

To me, it is not shocking that the defenders of easy money policies (i.e. the Media talking heads, politicians, corporate welfare babies, et. al.) would shrug off this particular set of facts and still defend the idea that adding debt is good for GDP growth.  No matter how you slice it, the ability for any country to print their way ouf of this mess is showing itself to be a game ender. 

Xibalba's picture

The money faileth -  Gen 47:15


Famine is coming.  And you are a troll.

Hippocratic Oaf's picture

He's no troll, he's MDB

Embrace his insanity

ultraticum's picture

Must be at least 9 other trolls to +1 the Mega Douche Bore.

CoolBeans's picture

MBD is the King O' Sarc here on ZH.


Orly's picture

Not sarcasm.  Parody.

There is a big difference.


Spastica Rex's picture

Not parody. Attention whoring.

There is a big difference.


NoDebt's picture

Not attention whoring.  Whatever the word is that means you don't agree with him, you're not sure he really means it anyway, but he's just entertaining enough you still read his stuff and get a laugh.

There is a big difference.


Pure Evil's picture

He stopped being funny or entertaining by his third post.

Acet's picture

Well, humor and attention whoring in general are really in essence just ways to outshine the competition and get the attention of the members of the opposite gender of the species.

That said, proper parody can also be used to make people think. Just a way to show redutio ad absurdum without the elitistic baggage that's often associated with intellectual pursuits in some circles.

Spastica Rex's picture

Incessant repetition is boring, not thought provoking. Comedy is an art, and when it's entirely predictable, it just isn't very funny.

I realize, however, that it's a blessing to be counted among the easily entertained.

aka Gil's picture

Even if it's sarcasm, it's so predictably boring. Cut and paste away, MDeltaBravo.

Desert Irish's picture

Large room....small door - get familier with the phrase.

sampo's picture

And again, how much was this freshly printed dollar buying in GDP?

yrbmegr's picture

How many times did you post this?

Shevva's picture

Your sums miss how much debt is needed for +0.1% of GDP? imagine if these economists 8 balls told them that $1500 million million million a month would give them that would they do it?

The Miser's picture

I miss Burger King-there I could have it my way with a paper kings hat. 

Village Smithy's picture

Show me some positive indicators that are not government manipulated propaganda.

bullmarket's picture

It goes up until it doesn't. In the end it's fundamentals which are overseas at best. Keep buying - it will be a better short

Turin Turambar's picture

Thanks for the reminder!  After reconsidering the vast increase in production soon to be realized from more underappreciated printed paper (college degrees, NOT fiat money - though they are both worth about the same amount), I feel  much better.

My mouth is salivating at the thought of the next technological revolution to be birthed by the next wave of social workers, teachers, minority/women studies majors... blah, blah, blah

/sarcasm off

GCT's picture

Welcome back MDB we missed your acurate and succint analysis of the situation.  We always love to have a good laugh.  I will point out the markets have nothing to do with the economy anymore.

Clint Liquor's picture

It's called 'debt saturation'. It's an Austrian thing, you wouldn't understand.

Liquid Courage's picture

Austrian Asymptote ... Hail the Mighty S-curve all thou Mad Monetarists. Your noxious notions of negative valuation will be rejected by the very fabric of the universe.

It's like ... er ... negative Mass ... philosophically speaking ... no! ... really!

Looks good on the page, but can't be rendered in "the real world", so to speak.

Best not to poke at it, wouldn't you say? But ... Boyz will be Boyz.

prains's picture



more drones

more homes

more phones

more political clones

more kleptooligarchianthievingfuckers

more rope


Super Marco's picture

Q4 negative GDP. Blame Sandy... Hook... Truthers.