After £156.5bn in QE and nearly £100bn in additional public deb GDP in the UK is ZERO for the year – don’t be fooled, NOTHING has been fixed
Firstly it should be noted that this is a first estimate and the headline grabbing 1% Q/o/Q GDP growth will no doubt be revised down during the second and third estimates (here’s why).
For Q2 2012 the original estimate was for -0.7 Q/o/Q growth, the final estimate raised this number to -0.4%, so first estimates can be wildly off. We wouldn’t be surprised to see the final Q3 GDP to come in at 0.6-0.8%.
But today all the headlines are about a UK economy on the mend – here’s why it most certainly is not.
Here is what the UK economy has done over the past year according to the government funded ONS:
- GDP in volume terms was estimated to have been flat in Q3 2012, when compared with Q3 2011
So for the entire past year GDP has been ZERO. But what have we seen in the way of so-called stimulus over that same timeframe?
What was the size of the BoE balance sheet at the end of September 2011?
(click for sharper image)
And what was it at the end of September 2012?
(click for sharper image)
Or in other words in 12 months the BoE balance sheet has grown by £156.5bn, or 65%.
And what about the debt in the UK, what was that back in September 2011?
(click for sharper image)
And was it at the end September 2012?
(click for sharper image)
Or in other words in 12 months the national debt of this country has increased by £98.6bn or 10%.
So let’s get this straight, the BoE has pumped in some £156.5bn into the economy over the past year, all whilst the debt has increased nearly £100bn which added together nearly equates to 20% of the countries entire annual GDP, and all we have to show for it is ZERO growth annually? Really? That’s it? It really does beggar belief sometimes.
Let’s be totally clear about this, no corners have been turned, no ‘slowly healing’ economic conditions have descended from the heavens, no green-shoots are flowering. Rather the true economic condition of the UK is a country much, much worse off than a year ago and the debt, which is the very source of the problem, is getting exponentially bigger.
It really is a sad state of affairs where a country has let itself be CONvinced by the very same bunch of people who’s integrity seems to be called into question nearly everyday, that this GDP print in some way means anything. It doesn’t.
Is GDP a measure of your happiness, your virtue, your success? No, it is just another governmentally fudged, arbitrary number, consistently being tweaked and re-calibrated to try and pull the wool over your eyes for just another quarter. Don’t let them.
With the total mis-pricing of money that we have at the moment as a direct result of the unprecedented money printing, the malinvestments that are occurring in every aspect of the economy right now are simply staggering, and the UK is storing up for itself the mother of all problems down the road.
So GDP went up for the quarter, the proper response from everyone should be a big fat “so what”. NOTHING has been fixed and the UK will sooner rather than later get a very painful lesson in economic realties. You have been warned.
Related posts:
- Why the IMF’s additional lending can’t work without much higher gold prices
- Just what an additional £225bn money printing in 2012 means for the gold price
- After £75bn of additional QE is completed it will take a £30,900 gold price to return to a fully 100% backed standard
- World Gold Council: Q1 2012 demand up 16% year-on-year
- Osborne is running a bigger budget deficit this year compared to last year – Tories ADD 40% to national debt
Link to this article: : http://www.goldmadesimplenews.com/analysis/after-156-5bn-in-qe-and-nearly-100bn-in-additional-public-deb-gdp-in-the-uk-is-zero-for-the-year-dont-be-fooled-nothing-has-been-fixed-8499/
Posted by Thomas Paterson on Oct 25 2012. Filed under Analysis.
You can follow any responses to this entry through the RSS 2.0.
You can skip to the end and leave a response. Pinging is currently not allowed.
