Let’s explore expansion in Total Credit vs expansion in GDP over time.
Chart Notes
- Real GDP is from the BEA at a seasonally-adjusted annualized rate using the GDP Deflator 2017=100
- TCMDO is Total Credit Market Debt Owed end-of-quarter, nominal dollars.
- Real TCMDO is inflation-adjusted TCMDO using the GDP Deflator 2017=100
Real GDP vs TCMDO Detail
Change Since 2019-Q4
- GDP: +2.55 Trillion
- TCMDO: +27.33 Trillion
- Real TCMDO: +6.30 Trillion
It took an expansion of $10 in credit to produce $1 in GDP.
$27 trillion doesn’t go far when inflation is out of control.
Change in Real GDP vs Change in TCMDO
Real GDP, TCDMO, US Government Debt
Detail Since 2019 Q4
- GDP: +2.55 Trillion
- US Government Debt Held by Public: +11.67 Trillion
- US Government Debt: +13.00 Trillion
- TCDMO: +27.33 Trillion
Of Government debt, it’s the debt held by the public that matters most. The rest is inter-government accounting.
REAL GDP. TCDMO, Debt Held by Public
Dramatic Progress!
I am pleased to report “dramatic progress” in 2024.
It “only” took a $3.80 trillion in total credit expansion to produce an increase in real GDP of $650 billion.
In 2022 it took an expanse of $6.85 trillion in credit to produce an increase in real GDP of $845 billion.
Is that progress, or what?
On the other hand, US Debt held by the public rose by $2.82 trillion, up from $812 billion in 2023 and $1.90 trillion in 2022.
Hello Jerome Powell, Is Everything Under Control?
On January 31, 2025, I asked Dear Jerome Powell, Is Everything Under Control?
Gold does not believe the Fed has things under control and neither do I.
Gold is now about $3059 per ounce. So add about $250 to the price in the above chart.
Three Questions of the Day
- Is the Fed suddenly going to get things under control?
- Will DOGE cut $2 trillion or even $1 trillion in government expenses?
- Is Trump going to magically reduce the deficit via tariffs or any other means?
Fedthink! The Fed Is Incompetent by Design and Can’t Be Fixed
On February 3, 2025, I commented Fedthink! The Fed Is Incompetent by Design and Can’t Be Fixed
Is the Fed playing politics? Does the Fed know what it’s doing at all?
Gold does not believe the Fed will fix anything, Congress will fix anything, DOGE will fix anything, or Trump will fix anything.
And neither do I.
Nobody will fix anything because the system is totally broken.