The constraints of GDP as a measurement of economic activity - (1/4)

[Mastinox803]

The US calculated GDP is manipulated to make it appear alot bigger than it really is. The same goes for CPI and PPI. These figures are erroneous and therefore should not be used.

[tekjanson]

Pardon my ignorance, but where does this equation come from?

[kalm77]

interesting. looking at each component in terms of drivers of PRODUCTIVITY. I never looked at it that way.

Could you also tie in equation for savings and investment.

thanks.!

[davincij15]

What's your opinion on the German lady named Heidemarie Schwermer who lives without money.

Personally it's not realistic her drastic life style but there is something to learn from it.

[hugolp]

No. I didnt know he said that. I heard him saying that the monetary system was a disaster and a new one was needed (wich is absolutely true) but I think he was proposing some kind of global fiat currency wich is very scary. A global central bank would be the worst thing that could happen for the common man.

[prhughes0]

"Limitations" might be a more precise word than "constraints" in this case, meaning that swallowing GDP numbers "whole" can be misleading.

[barbeque44]

Very good, I learned something today. If you could plug some real numbers and show the different effects it has on GDP that would be interesting.

thank again I appreciate your time

[JTPNYC95]

How did he know I like coffee??

[STOPPUCKNOW]

nice hair today

[KnowledgeDriven]

as for repaying jberni1, the name of the new game is play-it-forward, not payback.

jberni1 has no intention to build an empire or mountain of cash or stuff & things.

good timing on your sales; as for Ag, consider not loading the boat now but a cost-averaging buy-in plan (see John at stellaconcepts).

your mind is in the right place, so now, keep learning and gud luk! :)

p.s. to repay jberni1, continue to comment and help others; that's what he and the rest of us want.

[capcom101you]

Thank you for posting this video. Enjoy!

[peckiledorf]

how the hell do you get this smart?

[KnowledgeDriven]

@peckiledorf - from Dr. Berniger's website About section:

Berninger holds a Ph.D in Chemistry and an MBA from IESE Business School. He has a strong background in business strategy and operations, innovation and IT and Sales Performance tools.

[petsatcom]

Nice job keep up the good work

jim

[streetmoney21]

Nice video. I like where this is going.

[robert4you]

Thanks for this video! Very interesting.

[pcuimac]

1:55 Not factors. It´s a sum not a product.

[stephenrblv]

Debt-Based Fiat Currency Economies demand constant growth to produce the interest payments on the ever-growing debt pile. Thus the focus on the "big number".

[KnowledgeDriven]

no big deal, but i think you meant continuous growth, not constant.

i.e. these economies require growth all the time. the pain or pleasure factor comes from the rate of positive growth. however, if growth goes to zero or negative, the system turns into a degenerative deleveraging clusterfuk relatively quickly.

[hugolp]

But in reality, debt-based fiat currency economies dont need continuous growth, but just growth of the monetary base. Real growth is a different thing, and the GDP is not a good indicator of real growth.

So in reality the economy is not growing and is not making everybody life better. Only the numbers are growing. That is the real problem.

[kricke243]

a) What happens if consumers borrows money from abroad, to import consumer goods from abroad? This is also included in GDP, yes?

b) China world champions at net exports? Not per capita? They net export like ~280 $/capita, compared to Germany ~3066 $/capita and for example Sweden 4155 $/capita. Thats like 15 times more than China, per capita. Norway and some other countries has even a lot higher numbers. (2 years old figures from Wikipedia, "List of countries by current account balance").

[hugolp]

Finally someone says it like it is. GDP (PIB in Spain) is not a good mesure of economic growth, but goverments love it for a reason.

[PlatinumGordon]

The goverment is legalised theft, they are stealing our purchasing power of the dollar AUS

[imigrantpunk]

ok, but what happens when govt just prints money (quantitative easing)? it cones out of nothing so does it still measure productivity?

If you look at how US is financing their budget deficit you will see that more than half of the bonds have unaccounted or mystery buyers. makes sense, since the public is broke and the foreigners are diversifying out of the dollar.

[cbr6864]

this is nothing more than a planned crashed of our economy. ever decision that has been made has only made things worse.

[stephenrblv]

ISAB, FSAB, Mark-to-Market accounting,transparency agenda,realtime market technologies,instant communications, desire to consolidate power and impoverish the masses.

Not really hard to figure it out but to do so you have to stop listening to them tell you the blame-the-banker-Meme.

[ozziindaus]

The current breakdown of GDP is as follows (approximates)

Consumption=70%

Government spending=20-25%

Investments=10-15%

Trade=-5%

This may explain why the government is so persistent on "reckless" spending. If they don't, that would drive GDP closer towards depression levels (-10%)

[InTheSticks1881]

GDP= Generally Dumb Public

[rogerwaller]

jbern1, I had previously asked you what the silver coins you showed were and what are the most popular bullion coins in Germany and Europe are. Thanks

[mihailpet]

To rogerwaller: most polpular silver bullion coins in Germany: mapple leaf, philharmoniker, American eagle. Regards.

[toddhawley]

In good humor- I thought of a joke........

What do you call a "miserable German"?

A "sour kraut" ;lol no harm intended

Great work jberni! 5 stars lets get to the next vid

[comedytracker]

I tot eh was austrian.

[toddhawley]

Better than a puddy cat ;- )

jberni went to the top ranked school in the world for economics.

[ABETRMAN]

Five Stars*****

Great Insight

Great production

Excellent Sound Quality

[skybirdbird]

thank you......this really helps me understand better.....

[msamour]

Seems to me you have forgotten the inflation/deflation paradigm. In regards to Government spending created out of QE, it increases the monetary suppl, but decreases the value, thus it skews the GDP figures. Then GDP in the end becomes a bad indicator of the real state of the economy. This is happening in the U.S. right now. The stock markets are finally realizing that investors are getting screwed by bankers, and governments. Market will only go down from here. Mike, London, On.

[lostmatt]

jberni, I think you should invest in one of those clip on microphones. I find your commentary to be very important -- however at times it is hard to hear you. A good microphone would greatly improve your videos.

[lay4riches]

I enjoy watching your videos, very professional unbiased outlook on the markets.

[rdority]

Excellent teaching.. I wish things were explained this well for me in school sometimes.

I like that you have broken it up into parts so we don't get too overwhelmed.

I am enjoying my coffee. :-)

Good Luck to all of us!

[alalal5]

I definitely appreciate your return to fundamentals

because the diffusion of these basics is what is most urgently needed in these days!

So... 5/5

[kent6608]

Great video, thanks

[grasshutz]

back in class, (pssst, got a pensil)

[Eraser7622]

Great vid Jberni.. thank you!

Certainly anybody who has any sense on the reality of what is happening can see clearly how each of the variables in your equation are manipulated for a desirable GDP result. Consumer spending had been enabled by easy credit, now that's gone so its stimulus and low taxes. This should affect govt spending, but it is made up for by selling treasuries to borrow and print money. investment is rigged via fed reserve buying up our own debt at auction.. etc., etc.

[KnowledgeDriven]

hey eraser7622, ya, good comments (as usual)!

even though the system is so fuct, surprisingly?, this equation is still important as it gives light to the modus operandi (MO) of the evil-doers. Why do they do what they do and when should be able to be reduced to factors affecting this simple GDP equation.

albeit, you're correct in your inference that with all the tomfukery that's been going on and the psy-op on the masses, it's hard to see the reduction through the trees....

[TheInvinciblePixel]

We wish you a Merry Christmas;

We wish you a Merry Christmas;

We wish you a Merry Christmas and a Happy New Year.

[oliverheidelberg]

Thanks for the explaining this to a layman such as me. Echt gut Alter!

[IronicallyVague]

As always Jberni1,

your opinion & advice is much appreciated.

.

[GlobVetus]

So GDP of all countries are faked then ?

[Eraser7622]

It would be a much bigger stretch of imagination to assume the GDP numbers are NOT faked given what we now know as fact about book cooking. Think about this: the govt are the ones who gave wall street permission to, for the FIRST TIME, not follow generally accepted accounting practices (gaap) so they could hide toxic assets on their balance sheets without realizing the obvious losses they all have. If the govt would allow private business to do this for political reasons, what does that say?

[Bezz80]

Good start, cant wait for more!

Thank you

[k1000o73]

Hello Jberni, very good video as usual. We are still waiting the video on M3, interest and the implosion of the bank system.... Will you do it? please.

[jberni1]

@k1000o73

I think it should be part of this GDP series...

[yonny1954]

Jberni no more commentary on the U.S. exploitation of HAITI? You are worth listening to when you stick to what you know but that would not include the efforts to aid Haiti!

[jberni1]

@yonny1954

I do not want to transform this into a political channel. I gave my opinion and I will give in explanation in my Spanish channel, soon. (DrBerninger)

Unfortunately the crisis mixes with polictics. Finding the balance is the challenge, no?

[tomnz1]

Thanks Jberni1 for your explanation. That's very kind and useful for students.

It would be great if you could explain what is the key drivers of economic growth of BRIC countries. Can we analyse the economic of a country by looking only at GDP,FDI,import/export, GERD ??

Could you explain me how the ecomic power shift from Triad region to Bric countries has changed that quickly?

Thanks

[yonny1954]

AMEN! ON THE SUNDAY MORNING THING

[jberni1]

@yonny1954

Sorry to publish this on Sunday, but I just had a couple of minutes to do that video...

[modelmark]

if people have money, they either consume or invest it. If the gvt takes their money by force and consumes and invests it on other things, this does not really make a difference for GDP, I would think.

I followed the Reisman lectures on capitalism once and he concluded that GDP is just money growth. If you double the money supply, you gdp measured in that money will double in the longer run (assuming velocity is constant).

[jberni1]

@modelmark

Yes Savings and Tax are a part of this (to be discussed in another Sunday morning video)

[joel1923]

Jberni, do you think any country in the Euro-zone will go back to their own national currency(Greece,Portugal,Spain­,etc)?

[jberni1]

@joel1923

Yes. Greece and Spain must do so.

I conclude that Spain can only exit a Civil war route, if they guarantee housing prices. If not the gvt. will have riots by Q3 of this year...

[joel1923]

I think QE with a national cuurrency is one of the few tools a country has to boost exports. How dramatic an effect(positive effect) would restoring the Peso and Drachma have on national economies?

Civil War in Spain? Do you mean like 1936?

[llothar68]

But QE to boost exports is a little bit stupid if the recession is world wide. Everybody wants to increase their exports. In this scenario you should try to increase the country own spendings and earnings.

All this theories about recessions and depressions are not working well for a world wide crisis.

[joel1923]

@llothar68 Yes but QE has worked for the UK in some ways: Irish consumers entering Northern Ireland in droves to be cheaper goods with their stronger Euros.

[joel1923]

@llothar68 QE could work. The global economy is in bad shape, but global trade hasn't stopped. And QE could boost exports within the Eurozone as consumers buy products from Spain or Portugal.

[jberni1]

@joel1923

Sorry guys. QE DOES NOT WORK in creating inflation (thats what it should do)

It creates DEFLATION

[alalal5]

This is probably something that you could explain in one of your next Vids on fundamental as there seems to be disagreement even among experts.

I know you have already mentioned it several times but without giving an exhaustive explanation for this important issue.

[jberni1]

@llothar68

that is called "begger they neighbour" policies and was the fundamental idea in creating central banks !

[joel1923]

Yes, but couldn't this policy work if most EU nations kept the Euro? 'Wouldn't QE benefit the PIGS?

[cosmicguerilla1]

me too !

[CelticReject]

What am I doing watching this on a Sunday afternoon! Jesus, I gotta get a life! What's happened to me!

[cosmicguerilla1]

me too, lol