The Great Unrotation In US GDP

Tyler Durden's picture

While most argue that the Fed has its foot on the throat of the bond market - and thus they do not reflect 'economic reality', it is hard to argue with the following chart of 30 years of Fed-intervened rates markets and the consequent GDP growth. Hope remains high for 2013 and beyond yet as very recent macro data shows, things are not going quite according to the economists' linear extrapolations. Maybe bonds do know something after all?



Chart: Citi

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FieldingMellish's picture

What about real growth?

ShrNfr's picture

The US demographics are going to combine to give real shrink. In the general case, you do not increase the GDP when the number of people in the workforce declines. I do not care how you measure that, gold, fiat funny money, or anything else.

Richard Chesler's picture

Obozo's legacy;

Unprecedented growth in Gross Domestic Peonage.

Seer's picture

Another cheap Party Pussy remark.

The fucking chart clearly shows the top in 1980!  It's been a trend for 33 years!  Growth is D-E-A-D.  Deal with reality (or climb back on the Party Pussy wagon).

Jumbotron's picture

Woah...I've been on this site for years.....learned a hell of a lot.  Started learning before ZeroHedge became part of my life years before that.


How in the world could anyone junk Seer?  He is spot DEAD on.  Growth is dead from NUMEROUS standpoints.  How many charts can be shown on this site....from multilple viewpoints....from multiple sources....from multiple datasets....with Tyler's and a host of personages' explanations to NOT know that this is true....that growth is DEAD?


Demographics, illegal aliens, the welfare state, encroaching and accelerating socialism, not to mention global peak cheap energy are just a FEW of the data sets that proves that growth is dead.

You five that junked Seer for whatever reason are complete morons.

dunce's picture

You are spot on. I do not see how we can ever measure anything economically from now on because of the years  lies and distortions in every govt. bit of data. After the crash we will have to start from a new zero reference point.

Save_America1st's picture

how to get the real data?  John Williams:


Seer's picture

Economics is a fucking joke to begin with and you're want it to produce reality?  When the fuck has That ever been the case?

I sense that it's more about people wanting to have the insider info so that they can get the winning bets than it is about have factual data available for everyone.  Clue: nature is a master of deception; humans are OF nature.

Rather than kicking and screaming for something that never has existed or ever will exist how about getting on with life?  Do people really have to wait for the sound of the explosion before they act?  No one here (I'd wager) has ANY ability to influence the pending explosion; all we can do is prepare for it, and, frankly, I don't see how eliminating "economic distortions" is going to mean much of anything to us (unless you're gambling in the casino, in which case that would be like expecting the Fun House Mirrors to not distort images).

P.S. There's plenty of BS numbers produced by businesses (not govt) too.  Or did you miss what the financial sector has been doing for the past two decades or so?

Frastric's picture

FieldingMellish; come again?

FieldingMellish's picture

Real growth = Nominal GDP - inflation (and real inflation, not that CPI garbage).

new game's picture

simpler yet-value of money = growth/risk-return

zirp assumes you are of zero vlaue-nominaly (as in your labor that is).

very fucked up plan. deparado ben shalom; ivy league bozo...

is this really happening?

someone shout in my ear "this is not a nightmare-wake the fuck up".

arrest ben and charge him with conspiricy to fuck up millions of peoples lives!

Seer's picture

And then there's the issue of the GDP measuring shit like toxic site clean-up... and all the BS'd numbers from businesses (such as the financial sector).  Garbage in, garbage out... it's not just the govt that's fucked up...

ebworthen's picture

Real growth would involve enforcing the rule-of-law on Wall Street and in Washington, rewarding savers, not bailing out banks, and the FED not using taxpayer money to enrich banks and bankers and the Ponzi meisters; so it's a no go.

css1971's picture

Go ahead. What's "real growth" then?

Seer's picture

"Real growth" can really ONLY come from the extraction and consumption of physical resources.  Eventually, however, this is limited by the capacity of the Earth: it's a BAD idea to challenge this, as I believe that Mother Earth bats last...

I'd further have to state that "real growth" is the carrot-and-stick mechanism by which TPTB maintain their level of power and control (allowing them to escape doing actual work) over the masses (whom are trained to salivate over the sound of increasing GDP and stock market numbers).

css1971's picture

I agree but you didn't answer the question.

Real growth is the additional goods and services created by an expanding economy... more eggs for example. Problem is real growth isn't measurable in aggregate. Sure you can count eggs but it hardly makes for easy reporting for all the goods and services an economy provides.

So what they do to get their useless aggregate "growth" numbers is use the additional money created to purchase the new goods and services. i.e. growth in debt. Built a new house? Someone takes out a mortgage and buys the house. More debt/money. Growth.

Thing is, the market transaction only takes moments and the money is only needed to facillitate the transaction. Sure the house was built. Sure the builder should earn the money. But the money came from nowhere and will continue to exist for the lifetime of the mortgage. So even though the build took 6 months and the transaction took 1 week, the new money will exist for up to 30 years. The new house is now off the market, it is no longer contributing to real economic growth. It is no longer being chased by the new money created to buy it. It's already grown. The new money however is still circulating, chasing other goods and services.

So the cost of the current banking system is endemic inflation. "Growth" simply is inflation.

Never One Roach's picture

<What about real growth?>


There is no growth. In fact, it looks negative.

abducens's picture

I think that when Obamacare comes into play later this year it will be the straw that breaks the camels back.

Number 156's picture

They will blame the republicans, and the republicans will pretend that they want to fix the problems.

Buckaroo Banzai's picture

Straw??? It will be the fucking 4-ton boulder that breaks the camel's back.

BTFDemocracy's picture

With a 4 ton boulder camel spit will be all over the place.

Mark Urbo's picture

They will never actually get it into play - its a clusterf*ck...

Seer's picture

Yeah, like if it weren't for this we could go on growing in perpetuity!

Fuck, more Party Pussy shit.

Abi Normal's picture

Yeah, both sides have a hand in this, but I can tell you this much the Democrats have far and away spent/taxed moar than the Republicans.  what we can put on the GOP is that they are asleep at the wheel, for the most part!  The left/right thing today is a sham, because they both now all take away liberty, tax and spend, as there is really no difference, sans maybe gun control.  Demonizing the GOP is the mantra of the left, they stoop to any level to do it, and it is obvious.  There is no way to fix this via the vote, I don't think that the level of corruption can be overcome at this point.  The solution?  I really don't know any more, third party is not the way, revolution would just destroy the country, so what is it then?  Some grand awakening?  This croney capitalistic oligarchy is the problem, and certainly socialism/communism is not the answer, so what is it then my people?  Some new form of government?  The root of all evil is the LOVE of money...that is a basic problem we do have to overcome!  Jesus Christ does have a point, LOVE and FAITH, but with Satan ruling this world, how does that happen?  We would have to become something that I'm afraid we cannot be...HUMANS!!!  

lickspitler's picture

The upside is I'm sitting here with my stack of liberty morgan eagle keuger dollars. I have a cupboard full of C,k,h,j-rations. I have 100,000 rounds of 9mm 11mm  17mm ammo and the box set edition 2003-2009 of Jugs VIP. 

Bring it all on BITCHEZ !

Alpo for Granny's picture

Yes, as HoneyPooh said..make sure you have some Federal Reserve notes.

Seer's picture

I have land (w/home), animals, firewood and plenty of water.  Food, Shelter and Water.  You've got "C,k,h,j-rations?"  Better hope that you've got hunting rifles and that you're in an area that has game (which won't be decimated when all the others who have signed on to your "plan" are out doing the same).

DoChenRollingBearing's picture



Press Release


The central bank of DoChenRollingBearing announces that it bought some gold today to bolster its reserves.  In large part this was a response to the lower price of paper gold.

The Senior Analyst at the central bank was caught completely by surprise by today's gold price drop. And so did not predict the event.  The Senior Analyst has resigned his position as Price Forecaster, the bank is undecided about whether it is worthwhile to employ another forecaster.

Probably not...

DoChenRollingBearing's picture

Here below is a view on today's price action in gold:

"Today's Massacre"

Beam Me Up Scotty's picture

Tulving website down?  Is Hans swamped or out of product or both?

DoChenRollingBearing's picture

Last night his site was down as well.  My LCS was OUT of gold after I bought the last Eagle.  

They will not even quote price & delivery until Monday (when they can talk with their suppliers).

EDIT (further thoughts on the meaning of what happened yesterday)

"Fallout and Other Thoughts Post-Massacre"

CrashisOptimistic's picture

This subject begins and ends with oil scarcity.

It's forever, and there is no fix.

kito's picture

Perhaps you have been missing the latest plunge into the abyss regarding oil and gasoline usage.....

CrashisOptimistic's picture

Nope, I've seen it.  If it's not there to burn, you can't burn it.

And I've also watched the commensurate decline in lifestyle.  As it continues, so will that lifestyle decline -- except for the low end.  For them, decline is death.

NotApplicable's picture

Wow, you gotta work pretty hard to reverse causality that completely. Kudos! Meanwhile, in my world, every gas pump I drive past... well, they have gas

CrashisOptimistic's picture

No they don't.  They have 90% gasoline and now 10% ethanol.  You also don't really know what else you're putting in your tank.  Your gas mileage will fall as they add ethanol.  There is pretense, but there is no redefining joules.

There is an enormous amount of joules obfuscation going on.  The Eagleford shale, much celebrated, outputs mostly condensate.  Not crude.

There's a 40% joules differential.

Useful also to point out the outright shortages in California and the post Sandy northeast in 2012.  Twice in one year. 

SmallerGovNow2's picture

They only have ten percent ethanol because of government mandate and to subsidize the farming lobby...  Ethanol makes no logical sense what so ever...

Seer's picture

"They only have ten percent ethanol because of government mandate and to subsidize the farming lobby."

"They only have ten percent ethanol because that's as much as the farming lobby was able to force government to mandate."  FIXED! (so, where's the "SmallerCorporationsNow2" guy for promoting this angle?)

Anyways... I spent plenty of energy fighting ethanol.

FreedomGuy's picture

There is no scarcity except as imposed by governments.

Cloud9.5's picture

I wish that the decline in oil production was a political problem in the sense that we would no longer need to steam clean sand for oil substitutes if we could just vote out a few politicians,  Unfortunately the finite world is finite.  You might want to read this:

CrashisOptimistic's picture

The case for obfuscated scarcity is pretty simple.

We once shipped a horse drawn wagon of lumber to a site, nailed it together into a 30 foot tall derrick, drilled for oil, and then put a pipeline over the gusher that came out.

Now we have to build a 30 STORY tall structure, in pieces, ship it to a coast, assemble it in the water, put a 40,000 horsepower marine engine on it, helicopter out a crew, drive it 10,000 miles to a drill site and drill in 2 miles of water, and then down 4 miles under the seafloor.  Then you hope you have capture infrastructure.

Does anyone really believe all this shit would be done if they could head on out to Oklahoma, where the leases are in place and there are no environmental restraints, drill and capture?  Why don't they?  Because It's Almost Empty.  That's not where the oil is.

Look at that ratio of effort expended per barrel collected and which way that ratio is going. 

THAT is why growth is never coming back.


Seer's picture

And the "government" is also hiding the unicorns!

It's about affordability.  I could readily argue that the US govt has made oil less scarce (more available) by its military operations around the globe.  But as is the case with BILLIONS of people on this planet, just because there may be a lot of something that that don't mean that you can get/afford it.

People will make a myriad of excuses to blame someone/something else for why they cannot have something.  It's a lot like spoiled children who cannot obtain something.

hannah's picture

"This subject begins and ends with FIAT scarcity."....we have plenty of oil...we dont have plenty of money to buy it.

Seer's picture

No, we DO Have plenty of money, it's just that it's not worth much!  And, really, the nerve of all those oil-producing countries to not have compassion for our absolute NEED to consume as much as we can, to not accept that our money is WORTH LOTS MORE than what they think it's worth!

Jumbotron's picture

"This subject begins and ends with FIAT scarcity."....we have plenty of oil...we dont have plenty of money to buy it.


Bullshit Hannah....even the oil execs are on the record stating that the era of cheap oil is over.  YES, YES, there is plenty of oil left in the ground and under the sea.  But it costs WAY more to extract it out of the ground now than ever before.  Then the stuff they do pull out is so cooked or shitted up with sand like the tar sands of Canada that there is extra cost turning that stuff into light sweet crude that used to be pulled out of the ground simply by sticking a straw in the West Texas patch.

Certainly government regulations and fiat printing have a lot to do with it.  But you can't fight geology.


yrbmegr's picture

The "fix", of course, is using different ways to generate energy.  They might be more expensive per BTU right now than hydrocarbon, but engineering can reduce the cost.  Enough?  Hard to know.  But clearly hydrocarbon will run out, and other ways will have to be used.

Seer's picture

"The "fix", of course, is using different ways to generate energy."

One does not "generate" energy- energy cannot be created or destroyed.

One can, however, create means of tapping it, of releasing it, such as "generating electricity" from some energy source (PE - Potential Energy).

"But clearly hydrocarbon will run out"

No, that is, not as long as the planet is still around.  It's an issue of EROEI; nature understands what this means (any life forms that consume more energy in order to get energy just don't make it- humans cannot defy this fundamental law).  If you have but a stick and there's a TON of oil down 100' from you you're NOT "out of hydrocarbons," you'll just die trying to get it (kind of like what's happening to military personnel in the ME).

"engineering can reduce the cost."

Engineering allows for increasing volume (extraction/production), helps creates the positive economies of scale, until, that is, Jevons Paradox slams the reality hammer down.