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The joke goes "economists correctly predicted 10 of the last 2 recessions." You can always retroactively find predictions to match reality, but that doesn't me
by MegaButts 7y ago
The joke goes "economists correctly predicted 10 of the last 2 recessions."
You can always retroactively find predictions to match reality, but that doesn't mean you have much ability to figure out how much they're guessing more than anyone else at the time. Hindsight is 20/20. I've been reading about how the economy is going to crash next year for 5 years. Of course it seems inevitable that it will crash, but I'm not convinced anyone can predict when. And I'm not sure how many people can predict why.
- samsonradu 7y agoI’m not sure that economies ‘can’ actually crash while running on 0 or below interest rates. I mean why crash when one can just buy more time, it’s free! Just keep on borrowing. I think the real danger is on the other end, hyper-inflation. However, the reason this has not happened yet is due to globalization, cheap money in developped economies flow into emerging economies (China for the past decades), which is not necessarily a bad thing. We’ve only seen massive inflation in products that cannot be imported, like housing.
- MegaButts 7y agoWould you not consider hyper-inflation a recession? If suddenly all my savings, and most everybody's savings, are worth a lot less, it seems like a recession.
- nradov 7y agoWestern countries are far more likely to default than to resort to hyperinflation when they're no longer able to service their debts.
- whatshisface 7y agoI'm not sure what would be worse for world peace, USD hyperinflation or a treasury default.