Worst Economic Predictions in History

[cdcaveman]

I honestly have no idea how that could happen. Every time people fight me on the crash that never happened after 2007, I always point to the fact that most in the industry probably didn't realize how far the government would go to print so much money, and how low the interest rates would go and how long they would be there for. In the entire history of economics, I don't think these two factors were ever in play.

So it is my belief that the catastrophe was averted because these two mechanisms were enacted and were somehow wildly successful. Going forward, what other tools do the officials have to keep the party going? The problems now are much worse, such as an over-inflated RE market along with equity markets. Could the balance sheet grow another 10 trillion? Sure, but its kind of like pushing on a string at this point. Any extra money the government prints is just going to inflation, so the citizens are screwed. And most of what will be necessary going forward, like energy and food, cannot be printed, so the printing press will be of limited benefit. Clearly interest rates are just coming off their lows, but still historically pretty much at the bottom, unless you want to talk negative rates. So this tool is no longer available as well.

So the point is that back in 2007 the officials were able to pull a rabbit out of a hat via the two extraordinary tools, and now I don't think they have anything left. I almost believe that at this point, the officials want to kill the economy, take a much bigger role in running things, get everyone dependent on the government, and rule through authority. If they don't seize more power now, then when society breaks down even further, it will be all out anarchy. How does the equity market keep rising in this environment, unless of course its simply a crack-up boom in response to a monetary collapse of the USD?

I agree with you holy except that they're not extraordinary tools fancy names for debasing the currency.. the crack up boom is a term that mises brought about. And I do think we're in some stage of that and if we don't change our direction we will experience hyperinflation... And everybody will run to hard assets accentuating the problem..

 

[ktm]

Add Krugman to the list...dozens of examples. And Bernanke in May of 2007:
Bernanke: Subprime Mortgage Woes Won't Seriously Hurt Economy (cnbc.com)

Krugman. LOL. There cannot be any credibility to any "top 5 worst prediction" list if Krugman is not included. He was the guy that made the economics Nobel meaningless going forward.

 

[ET180]

I would say this prediction is far worse than any above except maybe for #4.

https://wattsupwiththat.com/2018/12...would-be-gone-inconveniently-its-still-there/

Regardless of where you stand on the issue (I think most would agree that the climate is changing), how we react to it has huge economic consequences. The people in the original post above don't have much influence. Al Gore does. He can affect resource allocation. And he's not the only person with influence who has been making these predictions...

https://www.newsweek.com/alexandria...nge-world-will-end-12-years-un-report-1300873

 

[MKTrader]

I would say this prediction is far worse than any above except maybe for #4.

https://wattsupwiththat.com/2018/12...would-be-gone-inconveniently-its-still-there/

Regardless of where you stand on the issue (I think most would agree that the climate is changing), how we react to it has huge economic consequences. The people in the original post above don't have much influence. Al Gore does. He can affect resource allocation. And he's not the only person with influence who has been making these predictions...

https://www.newsweek.com/alexandria...nge-world-will-end-12-years-un-report-1300873

I agree on Al Gore making horrible predictions. Horrible. I don't agree about climate change, though. It's a control issue like many other things right now.

 

[nitrene]

Add Krugman to the list...dozens of examples. And Bernanke in May of 2007:
Bernanke: Subprime Mortgage Woes Won't Seriously Hurt Economy (cnbc.com)

Bernanke was the worst:

Subprime is contained. There has never been a national decline in real estate prices.

These people have no knowledge of economic history. You wonder what these academics were doing all day. I guess these people never heard of the real estate collapse of the 1930s which is ironic since Bernanke's thesis was in the mistakes of the 1930s Fed. The biggest blunder was how much the Fed underestimated the influence of the shadow mortgage industry.

 

[ET180]

I agree on Al Gore making horrible predictions. Horrible. I don't agree about climate change, though. It's a control issue like many other things right now.

Saying that the climate is changing isn't really saying much...the climate has always been changing. Just a matter of degree and cause.

 

[Overnight]

The permabear predictions on here the last 13 years have often been hilariously bad. And they keep on coming. Nobody in their right mind would forecast a revisit of March 2020 now based on real numbers but emotional day traders and cynics keep doing so.

There is one problem underlying the market, Mr. Maple syrup. Remember the last time the hikes were flowing in in 2018? We had no pandemic, no inflation, no war. And we had a perma-bull Fed chair who had just taken the job.

A mere 4 years later, all of that has changed to a great degree. Not to mention Yellen, the previous uber-dove Fed chairperson, she's getting hawkish as treasury secretary! WTF!

Time to move to Canada and buy those CDN oil companies and long the loonie I guess, because Biden is a dickhead and will not re-authorize Keystone XL. Therefore demand for CDN oil abroad is going to go through the roof by certain Asian countries.

 

[nitrene]

I remember Christmas Eve 2018 when Cramer looked the most depressed I ever saw. That December was one of the worst months I ever saw in the Nasdaq especially since it would just go down day after day. It wasn't a huge gap down like Covid or the Yuan devaluation of August 2015.

I'm still not sure what happened but I believe after everything I've read it was due to the Fed language of rate hikes. They were on automatic rate hikes no matter the data prints. That does seem to be what they are on now so I wouldn't be surprised if pretty soon there is another 20% collapse in the QQQ. I mean if CPI came in at 5-7% next month the Fed will still continue its rate hikes.

 

[MKTrader]

I remember Christmas Eve 2018 when Cramer looked the most depressed I ever saw. That December was one of the worst months I ever saw in the Nasdaq especially since it would just go down day after day. It wasn't a huge gap down like Covid or the Yuan devaluation of August 2015.

I'm still not sure what happened but I believe after everything I've read it was due to the Fed language of rate hikes. They were on automatic rate hikes no matter the data prints. That does seem to be what they are on now so I wouldn't be surprised if pretty soon there is another 20% collapse in the QQQ. I mean if CPI came in at 5-7% next month the Fed will still continue its rate hikes.

I remember that and I'm almost sure it was mostly based on interest rate hike fears. The Fed was planning to raise rates pretty aggressively. Inflation wasn't nearly as big of a threat then, though. They weren't doing insane things to raise energy prices and disrupt supply chains.

 

[The_Krakenite]

would result in hyperinflation and the eventual destruction of the Dollar.

Well isn't that technically what's been happening? The US dollar is already being demoted from being the world's base currency. Many who are still on it are TRYING to get off it, and more-so every day. And who can blame them?

As for inflation, as Milton said, it's always there, even when it's hard to spot. If you wonder where it was hiding while stats said we only had 2-3% inflation, just look at the prices of houses... THAT's where it was hiding. Right in front of you.