New GDP Calculation taking effect

If you recall my article on the newly invented way of calculating GDP, well we are at that point now.

Today, the new GDP numbers (including legal bills, art, music, theatre and imaginary pension funds) were in effect. Real GDP grew 1.7% on an annualized basis in the second quarter of 2013.

As you can see, the old nominal GDP numbers (red chart) and the new nominal GDP numbers (green chart) are about 3% different from each other. 

Nominal GDP

With these new numbers in place, my zero hour debt chart is being reformed to this.

You can see the large drop there, meaning that debt has actually dropped due to the debt limit.

Zero Hour Debt

Second, with these new GDP numbers, the debt to GDP ratio has declined by 3%. It isn't 105% anymore, but is now 105/(100+3) = 102%.

Good work in fudging the numbers, Ben.

(also note that stocks are now seemingly 3% less overvalued)

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The U.S. Government Has Invented a New Way of Calculating GDP

In March 2013, the U.S. government invented a new way of calculating GDP. The Financial Times reported that from July 2013 onwards, the U.S. GDP would become 3% bigger due to a change in statistics.  As this adjustment in GDP calculation is pretty significant, I will try to make an observation on which changes on the U.S. GDP will take effect, what the consequences are and how investors should act on this revision in statistics.

Read more here.

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