A theoretical example:
I'd love to have my own company that could issue low to zero interest rate long term bonds. I'd sell the bonds on the bond market, and wait until interest rates increased. Buy back my issued bonds at one cent on the dollar. Now that I knew when my bonds mature date arrives, my company will pay out the initial bond value dollar for dollar to my own company. I made 99 cent profit on each bond dollar issued. Dump the cash in a self-managed retirement superannuation account. I'll buy a big house through avoiding legal rules using “in the know” knowledge. Live in the house paying my company one dollar each week rent to my zero tax paying company.

End of my theoretical example.

Finance advisors are saying “don't panic” I assume, while they're selling out their investments, holding cash.

Getting back to GDP and other financial graphs. I anecdotally state, Information is often used in finance news to create an allusion of reality. Quoting graphs as though graphs mean something of value, redirects readers concerns, and need to know anything. Readers are limited to rely on graph suppliers.
Meanwhile real concerns, the bond market, how rising interest rates effects bond investments, are being ignored. By people concerning their spare time thoughts with sports.

If financial advisors are encouraging bonds as safe investments. I suggest, financial advisors are merely following centralised markets advice, controlled by the hidden, rarely ever mentioned establishment.

steve101.

Aidan
So, are saying that every time money moves it is added to the GDP number? For instance, in the finance industry, which move trillions around at the click of a key, are they included?

You also say there is no demand in the economy. It is true that the groups of people you refer to don’t have demand and are sitting on their assets. However you don’t have to go far from their ivory tower to find many who have demand. The problem is that the mass of liquidity that exists today (US$ 30,000 p/p) is in the wrong hands.

You say that many economists have a poor grasp of macroeconomics, so here is your opportunity to tell us your thoughts, and what you would change.
Chris

Steve
Your comment regarding drug sales being included in GDP are actually included in the UK GDP figure. In fact starting last year they included figures from not only drug sales, but also prostitution. So the figure is now given the true meaning of GROSS domestic product. Also as the trades are illegal how do they gather the information?

I agree with your comments regarding government bonds, and economics 101 (which I failed).
However have to say the rest of your posts I found difficult to follow.

Chris

Chris,

No, purely financial transactions are not included in GDP.
GDP only includes the money that ends up as wages or profits (or taxes such as GST). See http://en.wikipedia.org/wiki/Gross_domestic_product

There is demand in the economy, but not enough of it, hence many people don't have work.

Yes, many economists have a poor grasp of macroeconomics. The six most important things they're most likely to fail to understand are:

SECTORAL BALANCES and why government attempts to cut the deficit are futile when the private sector's weak, and can be counterproductive.
FINANCIAL SOVEREIGNTY, the implications of unlimited credit, and why governments shouldn't aim to eventually eliminate their debt.
LAND RENT, why land should be taxed more, what obstacles there are to implement this and how they could be overcome.
ECONOMIC EFFICIENCY, how taxes are just one factor of many for business competitiveness, why it's not safe to assume that incentive's the limiting factor for productivity, and why shifting the tax burden onto those least able to pay doesn't enhance productivity (see my response in the Respect the Dismal Science thread).
EFFECTS OF FIXED AND FLOATING CURRENCIES, how fixed currency rates are the real cause of the hyperinflation commonly misattributed to printing money, how floating currencies cause most problems to sort themselves out, what risks remain and how to avoid them.
EMPLOYMENT, PRODUCTIVITY AND INFLATION and how keeping the unemployment rate high is not necessary for controlling inflation.

_________________________________________________________________________________

Paul1405,

Demand and consumerism are not synonymous. Indeed even consumer demand is very different from consumerism (not that the latter is rampant across the entire country anyway). But there's also demand from business investment and from government. And it's the total demand that counts.

LEFTY,
Economists are puzzled as you have said about why the financial
tools, interest rates and austerity no longer work.
Energy costs eat directly into GDP.
Hence the low GDP world wide.
You gave a suggestion of three parameters;
That was supply,demand, and liquidity.

This where economists go wrong, the fourth needed parameter is energy.
In recent times economists are starting to realise that they had
missed it. It was fair enough for a hundred years or so as energy was
cheap but in recent years it has become expensive.
Only 20 years ago oil was between US$10 and US$20 a barrel.
Now it is US$45 barrel and the shale oil companies are going broke,
90 are bankrupt so far this year in the US.
So the affect of higher energy costs have changed the economic scene
to a significant degree. An economist I know, ex bank executive
admitted that he had never really taken energy into account his whole career.
It had always been a fixed charge and not very significant.

He explains to me that there is a new parameter that economists are
using called "Real GDP" which counts the most productive costs and
expenditures. My friend tells me he takes more notice in his study
of energy since he heard my talk.
I think there may be a formal definition of Real GDP but I have not seen it.
I will go back and read your post and some of the replies and make another comment

Lefty,
Aidan points out the lower demand and Paul1405 comments how
silly are a lot of the GDP inputs.
If you crash and write off your car, then buy a new one that is an
increase in GDP.
However you certainly won't feel like it is any sort of gain in your situation.
That is why Real GDP was produced.

The lower demand is because higher energy costs is increasing all other
costs and people are feeling the pinch. It is a bit like the boiling frog syndrome.
It is much worse in the US which is what Trump is catering to.