Dear CIGAs,

GDP Analysis:

PCE

Unbelievably, PCE/GDP continues to expand despite the evolving financial crisis.  What this suggests is that the stimulus/bailouts have done little to shift the U.S. away from a consumption-centric economy.  As long as excessive consumption relative to investment exists, the U.S. structural deficits will worsen in the future.

GDPI

Consumption up and investment down equals greater structural deficits.

NETEX

A nation that consumes more foreign than domestic goods and settles those transactions with paper will always see NETEX (exports-imports)/GDP expand during a recession/depression.

PCEI & FED

An illustration of Keynesian economics.  Your tax dollars at work. http://en.wikipedia.org/wiki/Keynesian

SAV

The trend towards savings has only just begun.

Regards,
CIGA Eric

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