If anyone uses the following terms, without distinction or disclaimer or stipulation narrowing the scope of utility in context to include accounting for variation of changes in back testing, then they’re just speaking gibberish.
GDP- GDP is a basket of goods and an indexing on pricing to measure output and other trade deficit jazz, turns out, we redefined what’s in the basket of good. Therefore, if you change the definition of what a metric is measuring, then it’s accuracy is subject to scrutiny before and after the change.
Specifically when Inflation and printing was going insane, we changed definitions of things like vaccine, herd immunity, Inflation and even GDP to fit the narrative of central authority in the US. It is barbaric hogwash.
M0 Money Supply– The Federal Reserve stopped publishing M0 as a distinct category in 2006. The term you might be looking for is ‘Monetary Base’ or “Total Reserves + Currency in Circulation” instead.
M1 Money supply– the Federal Reserve changed how it’s calculated in 2020.
M2 Money supply– was discontinued on December 20, 2019, according to the St. Louis Fed. In late 2022, M2 growth reached unprecedented negative levels.
M3 Money supply– The Federal Reserve stopped reporting M3 in 2006.
Recession – Essentially they changed it’s meaning from 2 consecutive quarters of decline to ‘no meaning’. https://nosafebets.com/2022/07/28/the-definition-of-recession-has-changed-because-the-economy-isnt-real/
Inflation – It has changed over time including how various industries report it or account for it.
To be fair, if your ruler or metrics suck, you update it to a better one. But to use the same name and assume and imply that it’s measuring the same thing is statistically disingenuous. They should have invented new terms for each iteration and provide data sets and proof (which they may have) of back testing their new definitions and terms.
We could arguably be on M7 Money Supply instead of nothing.
Essentially, if you have someone redefine the goal posts and the rubric in which we grade ourselves in, we essentially don’t have definitive standards worth comparing that mean anything.
Imagine running a mile in 3 minutes and having someone redefine what a mile is to be 3 feet and they beat the record you set by running it in 1 second. This is effectively what the economists and monetary theorists are doing. It’s disingenuous and potentially maliciously can-kicking.
Anyways, if someone talks about any of the terms above or argues over things using the terms above, then you would do well to ask them what these definitions mean and whether they are using a definition pre-change or post-change and to which change. It’s like law, you have to recite a specific law dictionary and use that as the rulebook for legalese lexicon.
So if you see a recent proposal
come across your trading desk or something, like so;
or some economic pundit trying to use any of the words above, chances are they either don’t know the difference and can’t be trusted, are operating on ignorance and can’t be trusted, or know the difference and instead use it as the old tool to crudely shape inaccurate data or an agenda, and thus can’t be trusted.
In Closing
I stand by my statements, that I hate economists.
And economic terms are used as a faux Latin to hold power over discussions about the realm of economics to beat you in their court of lingo-sphere. Just like black magic legalese.
It’s barbaric and disingenuous.
The only basic things you need to know to be a good economist is money, interest rates, trade deficits, source factory/labor-production and logistic supply chains. If you focus on those things and extrapolate their interaction and chain reactions, you’ll be an A-tier realist Economist.
But uh, economists are only as good as their data sets, and uh something about statistics being a snap shot of time that paints a rough estimate and not an exact science. Along with something about past performance isn’t indicative of future performance and things.
Turns out in the world of Science and Data, you can’t just point out self evident things like the sky is blue. You have to source it. Another Scam.
*Not Valid Financial, Legal, Life, or Any Advice