Do You Pay Attention to These Economic Forecasts?
During Janet Yellen's recent announcement that the Fed would hold steady on interest rates, she opined about future GDP growth. Interestingly, this time she did wax on about the problems of predicting economic growth these days. It seems it may have dawned on her that whatever tools the Fed uses aren't grabbing enough or the right kind of data to provide accurate predictions. (She did not indicate that, even if the right data in the right amounts was available, it was possible that predictions of any value still might be nothing more than wishful thinking.) Of course, she might have also wondered whether the Fed and other central banks' insane, inane policies that have resulted in, for example, over 30% of sovereign bonds sporting negative rates in the developed economies, might have finally made it difficult if not impossible for current tools used to measure the economy to function properly. But she didn't.
Besides the Fed's own crew of worthies, other economists make predictions too: Here's where we think GDP will be next year, in five years, etc. Even before recent central bank perversions infected the world's economies, such predictions were as wrong as they might be right. So we wonder, is there any reason to pay attention to such prognostications?
We found this marvelous chart that should help provide an answer to the question.
The line on the left bordering the gray area shows actual GDP growth since 2010. The other lines represent, by year, the IMF's predictions of where growth is headed. (The International Monetary Fund has its own gaggle of economists, naturally.) Notice that virtually every year since 2010 they predicted greater growth in the future; virtually every year, GDP declined.
(So chalk up the IMF as yet another organization that makes these sorts of predictions. They fit well into the fold of those who proffer questionable, generally wrong, even spectacularly wrong predictions.)
All of which reinforces the discipline of spending your time on that which might prove profitable, or enlightening, or enjoyable, rather than subjecting your poor overloaded senses and brain to the massive flow of junk news and information at our fingertips these days. Protect and nurture your precious time and your overworked brain. When you hear an economist, central banker, or government official launch into "prediction mode," do yourself a favor and switch off the auditory input; get into something more beneficial to your mental, physical, and spiritual well-being: a round of stretching and/or exercise, the pursuit of an avocation, listening to beautiful music, reading good literature.
There's just so much out there that can and will enrich your life. Sweep those minutes and hours of reading or listening to financial pundits under the rug, put on your walking or running shoes, fire up Youtube, head out to a museum, start building that ship in a bottle, writing that novel, or painting that masterpiece you've always thought you had in you. Just take one more look at that chart and get to it.
Besides the Fed's own crew of worthies, other economists make predictions too: Here's where we think GDP will be next year, in five years, etc. Even before recent central bank perversions infected the world's economies, such predictions were as wrong as they might be right. So we wonder, is there any reason to pay attention to such prognostications?
We found this marvelous chart that should help provide an answer to the question.
The line on the left bordering the gray area shows actual GDP growth since 2010. The other lines represent, by year, the IMF's predictions of where growth is headed. (The International Monetary Fund has its own gaggle of economists, naturally.) Notice that virtually every year since 2010 they predicted greater growth in the future; virtually every year, GDP declined.
(So chalk up the IMF as yet another organization that makes these sorts of predictions. They fit well into the fold of those who proffer questionable, generally wrong, even spectacularly wrong predictions.)
All of which reinforces the discipline of spending your time on that which might prove profitable, or enlightening, or enjoyable, rather than subjecting your poor overloaded senses and brain to the massive flow of junk news and information at our fingertips these days. Protect and nurture your precious time and your overworked brain. When you hear an economist, central banker, or government official launch into "prediction mode," do yourself a favor and switch off the auditory input; get into something more beneficial to your mental, physical, and spiritual well-being: a round of stretching and/or exercise, the pursuit of an avocation, listening to beautiful music, reading good literature.
There's just so much out there that can and will enrich your life. Sweep those minutes and hours of reading or listening to financial pundits under the rug, put on your walking or running shoes, fire up Youtube, head out to a museum, start building that ship in a bottle, writing that novel, or painting that masterpiece you've always thought you had in you. Just take one more look at that chart and get to it.
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