The gross domestic product (GDP) data for the June quarter show some startling trends. For instance, the expenditure figures show the biggest contributor to growth in the June 2013 quarter was the increase in so-called valuables, which is mainly investment in gold. Far behind, in second place, was the contribution of government final consumption expenditure. Private final consumption expenditure was a distant third.

The other segments—gross fixed capital formation, changes in stocks and the external sector—had negative contributions to growth. If this is correct, the amazing conclusion is that it is expenditure on gold and consumption expenditure by the government that have propped up GDP growth in the June quarter. Read More

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