We are in and have been in a recession since early/mid 2020. It will get worse.

• Is Nominal GDP approximately accurate? It’s not perfect, but it’s directionally correct in my view.
• Is CPI approximately accurate? Not by a long shot. True price inflation for goods and services was and is far higher than the Government reported fiction known as CPI. How do I know? Simply check real world prices versus the CPI fiction HERE.
• I don’t believe that the reported spread between Nominal GDP and CPI is an accurate depiction of the U.S. economy. The two graphs below represent the Government fiction. Graph 1 is the spread between Nominal GDP growth and CPI as depicted by plotting both Nominal GDP growth and CPI. Graph 2 is the spread between the two measures. I believe that price increases for goods and services have grown faster than Nominal GDP since March/June 2020. In other words, Real GDP has been negative since early/mid 2020. We are in the midst of a mild 3 year recession and it will get worse as banks continue to tighten credit.

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