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When All Else Fails, Change The Math: Japan To Fudge GDP Calculation, Will Add Up To 2% To GDP

Tyler Durden's picture


Proving once again that when it comes to fudging numbers, Japan (which previously was best known for changing the minimum legal radiation absorption dose on a daily basis following the Fukushima disaster, anyone remember that?) is leaps and bounds ahead of even China and the US, the Nikkei reports that the Japanese government will change the method it uses to calculate GDP, and the result will be an "increase" in the country's economic output by JPY 5-10 trillion. As a reminder, Japanese GDP is currently JPY 540 trillion, so in essence the math fudge could add about 2% to Japanese "growth." Accordingly, the main difference is inclusion of interest rate spread earned by financial institutions: we were wondering how long until blowing out CDS spreads would add to sovereign GDP. We now know. The new method will be applied to figures to be announced Friday. At least Japan has not yet adjusted its GDP pro forma for foreign currency gains vis-a-vis the dollar (there is time). And that's how things are done in a Keynesian world in which everything is now fraud, lies and relentless number fudging. Furthermore, we are 100% certain no analyst will look at the number on an apples to apples basis, and the result will be a miraculous Japanese golden age. Expect this experiment in excel spreadsheet modelling to come to a developed banana republic near you very soon.


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Wed, 12/07/2011 - 14:27 | 1955515 GeneMarchbanks
GeneMarchbanks's picture

Harikiri, bitchez!

Wed, 12/07/2011 - 14:35 | 1955551 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


Starring- Yoshihiko Noda

It's Alive!

Wed, 12/07/2011 - 14:42 | 1955586 GeneMarchbanks
GeneMarchbanks's picture

Noda ... for now.

See Kyle Bass' Japanese Finance Ministers Index for more details...

Wed, 12/07/2011 - 14:53 | 1955625 iDealMeat
iDealMeat's picture

OT:  Sorry to thread jack..

Why Rod Blagojevich got 14 Years today.

Wed, 12/07/2011 - 14:57 | 1955635 redpill
redpill's picture

Pretend Economics, it's the 21st Century way!

Wed, 12/07/2011 - 15:05 | 1955659 sqz
sqz's picture

I'm surprised sovereigns don't DVA their sovereign debt and add it into GDP... They are missing a trick from their own banks!

Wed, 12/07/2011 - 15:07 | 1955669 JustObserving
JustObserving's picture

We have pretend money - so why not carry that pretense a bit further. What harm can that do? Bernanke can always print everyone a million if needed.

Wed, 12/07/2011 - 16:23 | 1955934 FEDbuster
FEDbuster's picture

More doublespeak from the Ministry of Truth (and Numbers).

Wed, 12/07/2011 - 15:08 | 1955672 JustObserving
JustObserving's picture

Sorry dup

Wed, 12/07/2011 - 15:20 | 1955719 Strider52
Strider52's picture

Ann Barnhardt said it best (sorry if you guys already caught this, it's 6 days old)

Ann Barnhardt: Well that is the point of this. We are now living in a lawless, Marxist, Communist, usurped, what used to be a representative republic but is no more. This is no longer a nation of laws. This has now transformed into a nation of men. It doesn’t matter what crime you commit. In the case of Jon Corzine, this man has stolen in excess of a billion dollars. I think by the time it is all panned out it is going to be closer to $3 billion of customer funds that he stole. Why did he do it? Is he stupid? Well, of course he’s not stupid. This is a former head of Goldman Sachs. This man doesn’t have a low IQ per se. Why in the world would a man wake up in the morning one day and say you know what, I think I am going to steal all the customer seg funds in this FCM that I’m running, which is the biggest FCM in the country. Yeah, that sounds like a good plan. No. Why would a man like that even engage in a nefarious plot like this? Because he knew going into it he could get away with it. And the reason he could get away with it is he is in tight with the Obama regime. He is one of Obama’s highest fundraisers. Earlier this year Jon Corzine had a fundraiser dinner at his New York City apartment for Barack Obama where it was charged at $35,000 a plate. Okay? He bundled high six figures for Obama in one evening! He is a crony of the regime. This is Marxist Communism. There is no rule of law.

Lawless. Ain't it the truth? Complete transcript of Ann:

Wed, 12/07/2011 - 14:46 | 1955588 LouisDega
LouisDega's picture

And also starring Raymond Perry Mason ironside Burr

Wed, 12/07/2011 - 14:38 | 1955566 tempo
tempo's picture

the biggest story is that BOA has moved its $77 trillion derivative investment to its banking arm. Under a 2005 admendment to the bankruptcy law, losses from derivative trading have priority claims over customer deposits (MF Global deposits go to JP Morgan) in the event of a banking failure. A 5% loss on BOA derivatives will blow up all financials and allow the US Government to control/claim all cash, bond, equity investments making the FDIC/SIPC guarantees meaningless. Thats the threat that will force Germany to fund the ECB.

Wed, 12/07/2011 - 14:48 | 1955610 jdelano
jdelano's picture

If this is accurate could you please link to the law?    

Wed, 12/07/2011 - 14:51 | 1955619 EscapeKey
EscapeKey's picture

Denninger wrote about this yesterday

Wed, 12/07/2011 - 15:07 | 1955661 hedgeless_horseman
hedgeless_horseman's picture



BOA has moved its $77 trillion derivative investment to its banking arm...losses from derivative trading have priority claims over customer deposits

Hard to see how BAC's actions are not pre-meditation of and preparation for mass murder.

Wed, 12/07/2011 - 18:20 | 1956507 Mentaliusanything
Mentaliusanything's picture

Correct BAC has seen the future and hedged accordingly and that is why it is beyond urgent to separate "Investment Banks" from "Savings Banks"

You have no insurance if the Insurance company is bankrupt.

But who would have seen it coming ? ----- Answer every one on the inside

Wed, 12/07/2011 - 15:39 | 1955776 way-out-west
way-out-west's picture


Can someone smarter than I show us where the language is that allows this?



PDF: But for the life of me I can't decipher which sections would allow a Bank to "put derivatives before depositors".

Thanks in advance. This forum is the best.


Wed, 12/07/2011 - 16:32 | 1955969 tempo
tempo's picture

The story was carried on yesterday and the loss by MF Global deposits being transferred to JP Morgan is also headlined. Its nearly impossible to believe BOA has traded $77 trillion in derivatives. Its just a nightmare.

Wed, 12/07/2011 - 15:04 | 1955656 onebir
onebir's picture

Terrifying & incredible BoA was allowed to do this...

Wed, 12/07/2011 - 15:12 | 1955695 fonzanoon
fonzanoon's picture

I believe that BoA is being fought on this topic by the FDIC and has notg actually done it.....yet.

Wed, 12/07/2011 - 15:29 | 1955743 EscapeKey
EscapeKey's picture

FDIC rejecting the request of a big bank?


Wed, 12/07/2011 - 17:49 | 1956395 Ruffcut
Ruffcut's picture

That's alot of fudge. Glad to see this fudge packing industry is doing well.

Wed, 12/07/2011 - 14:26 | 1955516 youngman
youngman's picture

If you can´t beat em....saki em....

Wed, 12/07/2011 - 14:30 | 1955520 LawsofPhysics
LawsofPhysics's picture

And why wouldn't they? There is no rule of law anymore, no fraud is prosecuted.  Just another step in the decoupling of all things paper from all things physical.  Boring world indeed.

Wed, 12/07/2011 - 14:50 | 1955617 Divided States ...
Divided States of America's picture

Ever since the end of WW2, the Japanese have become a subservient bunch. They wont care even if the government continues to take them up the ass. Japanese made cars are not as highly renowned anymore. Their only economic advantage left from Japan is the quality of the porn they produced. YAMETE!

Wed, 12/07/2011 - 15:04 | 1955658 CvlDobd
CvlDobd's picture

But sorting through the censored stuff sucks.

Wed, 12/07/2011 - 15:19 | 1955714 catacl1sm
catacl1sm's picture

BAH! Eastern European porn is where it's at!

Wed, 12/07/2011 - 16:03 | 1955859 Totentänzerlied
Totentänzerlied's picture

"There is no rule of law anymore"

There never was, it's the Big Lie of republicanism.

Wed, 12/07/2011 - 14:27 | 1955521 PrintingPress
PrintingPress's picture

Can they print fudge?

Wed, 12/07/2011 - 14:33 | 1955544 HedgeAccordingly
HedgeAccordingly's picture

We cant print OIL.. but we can print the dollar's to buy oil with = 200 a bbl - 

Wed, 12/07/2011 - 14:37 | 1955561 Barnaby
Barnaby's picture

Germans can. It's called the skid-Mark.

Wed, 12/07/2011 - 14:27 | 1955522 UGrev
UGrev's picture

It's called "The Fuk-u-shima fudge, baby!"  Can't win? move the line and laugh to the bank. 

Wed, 12/07/2011 - 14:27 | 1955523 EscapeKey
EscapeKey's picture

Funny how all these model changes always favour the establishment.

Wed, 12/07/2011 - 14:27 | 1955524 knukles
knukles's picture

"Fiddle about, fiddle about, fiddle about."
          -apologies to the Who

Wed, 12/07/2011 - 14:27 | 1955527 surf0766
surf0766's picture

It has been that way here for years.

Wed, 12/07/2011 - 14:34 | 1955545 GeneMarchbanks
GeneMarchbanks's picture

Since the 90s at least. Tobashi... Standard practice among Japanese corporates.

Wed, 12/07/2011 - 14:28 | 1955528 Cassandra Syndrome
Cassandra Syndrome's picture

Rounding error perhaps?....

Wed, 12/07/2011 - 15:09 | 1955675 SilverIsKing
SilverIsKing's picture

Sounds similar to a company that books interest income on bad loans.

Wed, 12/07/2011 - 14:28 | 1955530 SheepDog-One
SheepDog-One's picture

Ah so! So EASY! Just flat out make up numbers...why cant the US and Europe just do this? GDP is 6%, unemployment 1.2%, every american is a multi billionaire...FIXED!

Can I get my Nobel in economics now please?

Wed, 12/07/2011 - 14:30 | 1955534 El Viejo
El Viejo's picture

Nobel prizes have been devalued.



Wed, 12/07/2011 - 14:38 | 1955565 CrimsonAvenger
CrimsonAvenger's picture

Sure - we'll mail it to you. Oh, wait - USPS is bankrupt - you'll have to come pick it up.

Wed, 12/07/2011 - 14:30 | 1955531 Sophist Economicus
Sophist Economicus's picture

Hey, don't knock this.   I just downloaded my bank statement, tweaked a few inputs and am now 4% richer!    Gonna go buy something pretty now, see ya


In case this doesn't work, can somebody call the PEW Research team and send them to my prison cell ....

Wed, 12/07/2011 - 14:29 | 1955533 El Viejo
El Viejo's picture

Doesn't China already fudge theirs??

Wed, 12/07/2011 - 14:47 | 1955602 Barnaby
Barnaby's picture

Does the Dalai Lama poop saffron?

Wed, 12/07/2011 - 14:59 | 1955640 JustObserving
JustObserving's picture

Dagong, the Chinese rating agency, claims that we fudge ours by  just 200%.  That leaves a lot of room for the Japanese to upgrade:

"If we exclude the factor of virtual economy, the U.S. actual GDP is about 5 trillion U.S. dollars in 2009, per capita GDP about $ 15,000. Meanwhile, the total domestic consumption was 10.0 trillion U.S. dollars and government expenditure was 4.5 trillion U.S. dollars."

Wed, 12/07/2011 - 15:06 | 1955664 SheepDog-One
SheepDog-One's picture

Oh, I see we do already do bad.

Wed, 12/07/2011 - 14:30 | 1955536 Contra_Man
Contra_Man's picture


Wed, 12/07/2011 - 14:33 | 1955543 Dr. Engali
Dr. Engali's picture

"Expect this experiment in excel spreadsheet modelling to come to a developed banana republic near you very soon".

Hmmmm.... hedonic regression ....seasonal adjustments......excluding food and energy.  We would never have anything like that here.

Wed, 12/07/2011 - 14:35 | 1955549 Barnaby
Barnaby's picture

Hey, printing staved off kodoku-shi for an entire generation. What could be the harm?

Wed, 12/07/2011 - 14:35 | 1955550 razorthin
razorthin's picture

Wow, they just blatantly put out there in plain sight now - all the governing bodies.  More fodder for the coming obliteration of the plutocratic few by the uncountable masses.

Wed, 12/07/2011 - 14:35 | 1955552 I Am Not a Copp...
I Am Not a Copper Top's picture

From Wikipedia:

In practice, a banana republic is a country operated as a commercial enterprise for private profit, effected by the collusion between the State and favoured monopolies, whereby the profits derived from private exploitation of public lands is private property, and the debts incurred are public responsibility. Such an imbalanced economy reduces the national currency to devalued paper-money, hence, the country is ineligible for international development credit and remains limited by the uneven economic development of town and country. Kleptocracy, government by thieves, features influential government employees exploiting their posts for personal gain (embezzlement, fraud, bribery, etc.), with the resultant deficit repaid by the native working people who “earn money”, rather than “make money”. Because of foreign (corporate) manipulation, the government is unaccountable to its nation, the country’s private sector–public sector corruption operates the banana republic, thus, the national legislature usually are for sale, and function mostly as ceremonial government.[3]

Wed, 12/07/2011 - 15:05 | 1955660 Tsar Pointless
Tsar Pointless's picture

I'm going to start a Wikipedia entry, and entitle it "Banana Celestial Body", in reference to the Earth.

We're all bananas now.

Wed, 12/07/2011 - 14:37 | 1955555 ebworthen
ebworthen's picture

Those wily Japanese, beating America at our own game once again!

Wed, 12/07/2011 - 14:36 | 1955556 paratrooper325
paratrooper325's picture

Only people that don't fudge numbers are engineering students because they need to actually get problems right to make the grade.

Wed, 12/07/2011 - 14:36 | 1955557 CrimsonAvenger
CrimsonAvenger's picture

Domo origato, Mr. Roboto.

Wed, 12/07/2011 - 14:40 | 1955558 hpprinter000
hpprinter000's picture

Step 1 : Build City

Step 2: Value each house at $50k each.

Step 3: Government spending can be added to GDP.

Step 4: China GDP to infinity!

Wed, 12/07/2011 - 15:07 | 1955670 Esso
Esso's picture

The Japanese should move into those ghost cities now that Japan is uninhabitable from the Fukushima radiation.

Man, can you imagine what a manufactiring powerhouse a combined Japan/China would be?

Wed, 12/07/2011 - 18:59 | 1956622 Vlad Tepid
Vlad Tepid's picture

Japan TRIED to make a manufacturing powerhouse out of China in the 30s and 40s with standard Chinese slave labor and standard Japanese management.  The Chinese didn't like the arrangment and WWII resulted.

As for Japan being uninhabitable, it's not.  Any more than Ukraine is uninhabitable.  To say so just makes you sound...uninformed.

Wed, 12/07/2011 - 14:37 | 1955560 RobotTrader
RobotTrader's picture

They will do whatever it takes


Its that simple.  Nobody is going to let another 2008 happen again.

Wed, 12/07/2011 - 14:50 | 1955569 razorthin
razorthin's picture

LOL! Like there's any choice in the matter.  As to the when, it's but a blip in geological time. 

And had a 2008 X2 event occurred the people would already be enjoying a real recovery from a sound monetary and fiscal base.  But because the elite money changers would be damaged irreparably, they inflate.  This is why they must be obliterated.  Call it the the circle of life, Karma, or whatever - it's a bitch.

Wed, 12/07/2011 - 14:39 | 1955574 fonzanoon
fonzanoon's picture

That is 100% correct.

Wed, 12/07/2011 - 14:45 | 1955589 GeneMarchbanks
GeneMarchbanks's picture

If only life had guarantees like that statement.

Yeah. Reality sucks that way...

Wed, 12/07/2011 - 14:49 | 1955611 ebworthen
ebworthen's picture



"Nobody is going to let another 2008 happen again."

"Nobody is going to let another 1929 happen again."

"Nobody is going to let another Tulipmania happen again."

"Nobody is going to let another South Seas happen again."

And on a related topic:  "World War I, the war to end all wars."

Wed, 12/07/2011 - 14:55 | 1955629 Sophist Economicus
Sophist Economicus's picture

BTW, there really hasn't been another tulip mania.    Wonder what they did?

Wed, 12/07/2011 - 14:59 | 1955642 blu
blu's picture

They realized the tulips are flowers, rather than money.

Big shocker right there.

Next up: paper is not money either. Whodanode?

Wed, 12/07/2011 - 14:56 | 1955630 Dr. Engali
Dr. Engali's picture

Yes nobody will let a 2008 happen will be 2012 and when that event takes the market to it's next leg down you will be posting... nobody is going to let 2012 happen again. But by then it will be too late because WWIII will be escalating.

Wed, 12/07/2011 - 14:56 | 1955632 Sophist Economicus
Sophist Economicus's picture

Hey Robo, General Jim's TRX seems to be dusting itself off - hope you got in at the lows....

Wed, 12/07/2011 - 14:59 | 1955643 tmosley
tmosley's picture

Yes, the king won't let the tide come in again.  Such a thing would be a disaster!

Wed, 12/07/2011 - 15:03 | 1955653 lieutenantjohnchard
lieutenantjohnchard's picture

robottrader: always certain. never in doubt. living on colored water, happy meals and generic chips.

Wed, 12/07/2011 - 15:08 | 1955673 SheepDog-One
SheepDog-One's picture

OH youre so wrong Robo, so sorry. They wont let another 2008 happen again? Hell, 2008 was only the practice dry run!

Wed, 12/07/2011 - 18:33 | 1956546 Mentaliusanything
Mentaliusanything's picture

Hey sheep dog - should we tell Row Boat trader that it IS happening and right now

Hell - If he was a professional he would know that trying to find some Cash at the moment is like tying to find a Virgin at a Bikers Christmas party.

Row boat trader should also know that its moved from Bank balance sheets to Sovereign Nations Balance sheets and now there is no other place to move it except back to the Prols.

Depression is word for "nowhere else to turn" 

Wed, 12/07/2011 - 15:24 | 1955732 catacl1sm
catacl1sm's picture

and what happens when the don't have what it takes?

Wed, 12/07/2011 - 14:37 | 1955562 Let them eat iPads
Let them eat iPads's picture

I thought the Japs were only good at making things smaller.

Wed, 12/07/2011 - 14:39 | 1955571 sabra1
sabra1's picture

i'm telling mr. bass!

Wed, 12/07/2011 - 14:39 | 1955573 lolmao500
lolmao500's picture

Gee with this crap, Europe and the US will have GDPs 10-20% higher considering all the CDS there are...

The taller you are, the harder you fall!

Wed, 12/07/2011 - 14:40 | 1955575 junkyardjack
junkyardjack's picture

Well I'm sure they will be releasing all of their historical data based on this new calculation as well so its easily comparable.  Its not like they are trying to trick people with their releases, right?...

Wed, 12/07/2011 - 14:41 | 1955578 blu
blu's picture

Alice: "The question is, can you really make [numbers] mean anything you like?"

Humpty Dumpty: "The question is, who is to be master. That's all."

And anyone thought perhaps there was something besides raging insanity down the rabbit hole?

Wed, 12/07/2011 - 14:41 | 1955583 SonOfSam
SonOfSam's picture

Relax, childrens:  the Japananese are merely copying what school systems here do to squeak by NCLB requirements: move the goal posts, and declare that all the students have "passed". Keeps the spigot open and the free federal money a flowin'!


Fascism: when Big Government and Big Business shake hands, and the little guy gets squashed in their grip

Wed, 12/07/2011 - 14:50 | 1955615 Spastica Rex
Spastica Rex's picture

My 6th grade daughter got all "4s" on her report card. My school district (Kennewick, WA) proclaims that they use "Standards Based Grading" where "4" is the highest score obtainable - equivalent to the "old" grade of "A."

My daughter scored 80% in math, which qualifies as a "4."

High expectations, my ass.

I told my daughter that when I was a teacher, 80% was at best a B minus.

"School reform" is one of the single biggest frauds of the last 40 years - although plenty of money has been made by testing companies, consultants, trainers, bureaucrats, and publishers. Maybe that was the point.

Wed, 12/07/2011 - 15:12 | 1955692 Idisq
Idisq's picture

I attended Desert Hills. How are things in the dry shitties?

Wed, 12/07/2011 - 15:56 | 1955826 Spastica Rex
Spastica Rex's picture

OMG, so did I.

I left in 85 and returned last year. Very different.

Wed, 12/07/2011 - 19:09 | 1956641 Vlad Tepid
Vlad Tepid's picture

I would consider home school or Catholic school if you can afford it.

Wed, 12/07/2011 - 15:30 | 1955752 pods
pods's picture

Read "Dumbing us Down: The Hidden History of Compulsory Education" by John Taylor Gatto.  Great read about education.

Ironic thing, supposedly he is related to Frederick Taylor, of Scientific Management (Taylorism) fame.  


Wed, 12/07/2011 - 16:01 | 1955848 Spastica Rex
Spastica Rex's picture

I've read it. It should be required reading in all pre-service teacher programs. Fat chance on that.

I'll throw one at you by Kieran Egan of Simon Fraser University: 

Getting It Wrong from the Beginning: Our Progressivist Inheritance from Herbert Spencer, John Dewey, and Jean Piaget
Wed, 12/07/2011 - 14:45 | 1955590 ItsDanger
ItsDanger's picture

Sounds like creative double counting.  Prepare to discount all stats by 2%.

Wed, 12/07/2011 - 14:45 | 1955591 PulauHantu29
PulauHantu29's picture

"VooDoo Math" has been added to Econ 101 at most Ivy League MBA schools.

Wed, 12/07/2011 - 14:47 | 1955599 litoralkey
litoralkey's picture

Call it the "Yakuza skim variable" quantified.


The Yakuza actually skim more than that by most estimates, however it's mostly internally circulated and should show up elsewhere in the GDP.



Wed, 12/07/2011 - 14:48 | 1955603 PaperBear
PaperBear's picture

The world is going full retard.

Wed, 12/07/2011 - 14:50 | 1955616 HD
HD's picture

I have bought many things directly from Japan for years. In the past - the companies I've dealt with have a "take it or leave it - we don't need you" customer service style. In the past few months this stance has softened - I receive more emails - they want my business now. More sales and promotions. Shipping is always a huge cost - I just had one company offer unlimited $12 shipping on anything I bought, no matter how much.

Japan is in trouble - I have no doubt.

Wed, 12/07/2011 - 15:03 | 1955654 LawsofPhysics
LawsofPhysics's picture

Yeah, I hear that they are selling gold for $129,000 an ounce.  Not desparate enough if you ask me.

Wed, 12/07/2011 - 20:52 | 1956834 Vlad Tepid
Vlad Tepid's picture

$129,000 for half an ounce.  Tokenism at it's best.

Wed, 12/07/2011 - 14:51 | 1955618 Dick Darlington
Dick Darlington's picture

Just take a look at Italy's latest "investor presentation" and you'll see italians know their way around on this front. Quite big revisions to past exports and industrial production numbers for example, upside of course. And remember, Italy didn't give the Q3 GDP first estimate at all this year. Wink wink, nudge nudge...

Wed, 12/07/2011 - 14:52 | 1955620 MFL8240
MFL8240's picture

Who the fuck are they fooling?  If we get to the point where goverments start fudging GDP to sell debt, this game is over and there will be no turning back.

Wed, 12/07/2011 - 14:56 | 1955633 blu
blu's picture

We hit that critical turning point around Dec 2008. And yes, the game was over since.

Wed, 12/07/2011 - 15:02 | 1955650 LawsofPhysics
LawsofPhysics's picture

LOL!  With respect to the dollar, try 1971.  At least before then the debt and money were backed by something real.

Wed, 12/07/2011 - 14:59 | 1955639 surf0766
surf0766's picture

Have you ever read anything on U.S. GDP number calculation? Might be a good idea..

Wed, 12/07/2011 - 14:53 | 1955624 youngman
youngman's picture

I bet Obama missed his putt when he heard this......"they can do that" he said...."well I am Jelous"........

Wed, 12/07/2011 - 14:54 | 1955626 Stoploss
Stoploss's picture

It's just the radiation talking...

Wed, 12/07/2011 - 15:02 | 1955651 TheGardener
TheGardener's picture

70 percent of US GDP is "services".

By that measure my mistress produces a lot more than me.

How come she thinks I`m a rich man ?

Wed, 12/07/2011 - 15:06 | 1955668 jomama
jomama's picture

she has to otherwise she wouldn't be your mistress

Wed, 12/07/2011 - 15:05 | 1955663 jomama
jomama's picture

in all fairness, it doesn't really matter when it's monopoly money.

Wed, 12/07/2011 - 15:07 | 1955671 PulauHantu29
PulauHantu29's picture

The Rule of 70:

The rule of 70 dictates how long it will take for inflation to halve the value of a dollar. Simply divide 70 by your expected rate of inflation. 

For example, if you expect 3% inflation, then divide 70 by 3. At that rate, it will take 23.3 years before the value of your money is worth half what it is today.

Read more:
Wed, 12/07/2011 - 15:23 | 1955729 ziggy59
ziggy59's picture

It's also a good indicator how long it takes money to double....
So true inflation at 10% or so explains why dollar is down 40 % in just 10 years.

Wed, 12/07/2011 - 18:39 | 1956571 Mentaliusanything
Mentaliusanything's picture

And they have the cheek to charge you Capital gains Taxes.

Are you feeling the Love yet. You get it in every Orafice they can find

Wed, 12/07/2011 - 15:11 | 1955683 Caviar Emptor
Caviar Emptor's picture

We propose a GDP recalc based on cognitive capital. That is, based on how many people now have time to sit and think

Wed, 12/07/2011 - 15:11 | 1955684 Poetic injustice
Poetic injustice's picture

I see. Can I provide reports that all peachy instead of you know, working?
I promise at least 300% performance increase (on paper) for same wage.

Wed, 12/07/2011 - 15:12 | 1955693 ziggy59
ziggy59's picture

Japanomics..... Slightly ahead of it's time

Wed, 12/07/2011 - 15:24 | 1955704 non_anon
non_anon's picture

damned abacus

Wed, 12/07/2011 - 15:21 | 1955723 DonutBoy
DonutBoy's picture

Funny they feel obligated to announce it.  I get the impression in the good ole USA we just kind of change the methodology without letting anyone know.

Wed, 12/07/2011 - 15:27 | 1955738 onebir
onebir's picture

the Japanese government will change the method it uses to calculate GDP, and the result will be an "increase" in the country's economic output by JPY 5-10 trillion. As a reminder, Japanese GDP is currently JPY 540 trillion, so in essence the math fudge could add about 2% to Japanese "growth."

I doubt this is a deliberate fudge & think it probably has more to do with bringing Japan into line with international national accounting standards.

1) This won't affect growth much unless they fail to revise the GDP backdata (unlikely). It'll boost the GDP level, with fairly small effects on the deficit & debt to GDP ratios. (ie 100% debt/GDP -> ~98%, 10% deficit -> 9.8%)

2) I think many other countries have similar treatment of financial services in GDP, so this change probably increases international comparability.

3) The interest margin seems like a pretty sensible way to value the maturity/liquidity transformation service provided by banks...

4) In some countries corporates mainly raise finance by borrowing from banks, while in others bond issuance is more common.  The latter involves fee income, which get included in GDP. So if the margin earned by banks is not included in GDP, the countries with more reliance on bank finance tend to have lower published GDP figures. So this should improve comparability across countries with different levels of financial disintermediation.


Wed, 12/07/2011 - 15:38 | 1955739 way-out-west
way-out-west's picture

Can someone smarter than I show us where the language is that allows this? The PUBLIC LAW 109 - 8 - BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005 is here: Text: PDF: But for the life of me I can't decipher which sections would allow a Bank to "put derivatives before depositors". Thanks in advance. This forum is the best.


---EDIT --- Reposted above as 'reply' to correct post. Apologies.

Wed, 12/07/2011 - 15:32 | 1955756 10044
10044's picture

See, US is already ahead by not even announcing ahead, as it just reports shit

Wed, 12/07/2011 - 15:37 | 1955769 ThirdCoastSurfer
ThirdCoastSurfer's picture

"inclusion of interest rate spread earned by financial institutions"

GDP : "the total value of all goods & services produced" plus any speculative income derived.

The fundamental definition of GDP changes because here-to-for nothing could be considered negative. That is to say, a large enough loss on a negative spread would produce a negative GDP. Not contraction, not loss, negative as in vanish.  A service may not be tangible, but at least my desire to forgo a massage does not reduce GDP.  

Of course since the spread they are talking about is the administrative fee banks charge to "wash" money as it passes from the BOJ to the Treasury and back a loss is not possible -and yet the definition changes never-the-less, right?

Wed, 12/07/2011 - 15:57 | 1955830 Odin
Odin's picture

...And by my calulations the euro zone is NOT in a crisis, the Fed is NOT printing the dollar into extinction, and Ben Benanke IS in fact the second coming of Christ....... It's easy, just carry the 1...

Wed, 12/07/2011 - 21:58 | 1956987 AndrewJacksonsGhost
AndrewJacksonsGhost's picture

One thing I learned long ago in Accounting, any numbers I did not create myself were not just suspect, but outright lies until I looked over the books.

As for anything coming from any government, well do I even have to say it?

Tue, 12/13/2011 - 07:47 | 1973166 mediaprizm
mediaprizm's picture

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