As we discussed in Part 1, GDP has outlived its usefulness. There are now many new, better indicators, from the Canadian Index of Wellbeing (CIW), the UN's Human Development Index (HDI), the World Bank's Wealth Index to Genuine Progress Index (GPI), Bhutan's Gross National Happiness (GNH) to the Calvert-Henderson Quality of Life Indicators. A GlobeScan survey of ten countries in November 2007, in conjunction with the Beyond GDP Conference in the European Parliament, found that large majorities in India, Russia, Germany, France, Italy, Britain, Australia, Brazil and Kenya favored broader scorecards of progress beyond money-based GDP. Indicators included health, education and environment. Real wealth and progress can never be solely quantified with money. In the financial planning profession, there are a number of planners who are having conversations about wealth and assets that are about more than money. Increasingly, there are conversations about the use of money. Leveraging debt and economic growth dependant on consumption has become evident.

The gross domestic product (GDP) or gross domestic income (GDI) is one of the measures of national income and output. GDP is defined as the total market value of all final goods and services produced within a country in a given period of time. GDP is often used to define the wealth of a country.

There are a number of limitations to this approach. Simon Kuznets, the inventor of the GDP, said in his very first report to the US Congress in 1934, "..the welfare of a nation [can] scarcely be inferred from a measure of national income." What we are seeing in the markets today may be an indication of the limitations of this measurement.

What's going on?  We are watching the money markets go more than just a little bit nuts.  What is up?  I suggest the answer is “inside” the money. The “interior” is not just about psychology and our inabilities to control our spending habits.  It is a cultural phenomenon about what makes money “money."