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Politics : Ask Michael Burke
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To: JF Quinnelly who wrote (64817)7/19/1999 11:41:00 AM
From: Mike M2  Read Replies (2) of 132070
 
JF, chained dollar concept is a statistical adjustment implemented in 1995 ( during the tenure of the most ethical administration in history HO HO HO ) to reflect the government's assessment of how much computational power has been added to computers. Heavy investment in computers makes for weak net investment numbers in nominal terms due to rapid depreciation ( a large % of spending is to replace old computers) and falling prices. What really counts for the profit and loss account are current dollars. No computer company reports their sales in chained dollars HO HO HO. Go to the Department of Commerce : Survey of Current Business and compare GDP in current dollars and chained dollars and you will see computers make all the difference in real GDP growth. In the June 99 issue of the Richebacher letter he notes that from 1996-98 US GDP rose by $810 billion CHAINED dollars or 4% annually . Of this $310 billion dollars came the chained dollar adjustment. For the preceeding four quarters ending 1Q99 its impact was 49% . Richebacher sums it up nicely " if computer output is taken out of GDP accounting in chained dollars, all the new 'paradigm' luster - strong economic growth, higher productivity gains, and falling inflation rates -dissolves into thin air." The Richebacher Letter 1217 St. Paul St Baltimore ,MD. 21202 1 (888) 737-9358 As Clinton would say it depends on what you mean by growth. You won't hear this deception mentioned on bubble vision, discussed by Wall St , or reported by the liberal press because it would spoil the party. I highly recommend the Richebacher Letter his irrefutable analysis makes short work of the new era myths. Mike
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