As some of my more patient friends know, I have been toiling away at a book on Chinese monetary history during the Interwar period off and on for some years. Immersing myself in the public and private words of the historic figures of the 1930’s has perhaps sensitized me to the propensity of even well-intentioned leaders to glide into chaos. That which is unthinkable inexorably becomes inevitable.
EconVue is about the Gettier Problem which to simplify means that just because one is justified in drawing a conclusion, doesn’t mean that it is true. For example, we certainly could be justified in thinking that racial hatred has increased in the US based on media and news reports. However, a fascinating University of Pennsylvania study says that this isn’t true, and that actually racial prejudice has been declining.
“For the great enemy of truth is very often not the lie—deliberate, contrived, and dishonest—but the myth— persistent, persuasive, and unrealistic. Too often we hold fast to clichés of our forebears. We subject all facts to a prefabricated set of interpretations. We enjoy the comfort of opinion without the discomfort of thought.” John F. Kennedy, Yale University Commencement Address June 11, 1962
The European Central Bank (ECB) replicated the Federal Reserve Bank’s earlier U-turn on monetary policy at its latest meeting. Barely three months after the central bank announcing an end to Quantitative Easing (QE), Mario Draghi, the ECB president, pulled the alarm over the sharp economic slowdown and announced a two-pronged approach. First, the central bank would continue its ultra-low interest rates policy at last through the end of 2019. Second, barely three months after announcing), the ECB will provide continued support to financial markets and banks.
Predicting the future is notoriously difficult, but that doesn’t stop the flurry of prognostications every January. We’ve gathered a selection of 2019 forecasts, including some predicting low probability events, because just imagining the unlikely can reveal horizons sometimes obstructed by conventional wisdom.
Like previous “year ahead” reviews I have published on EconVue, this is not intended as a prediction of how events will necessarily unfold in real life. Instead, as always my intent is above all to consider the main risks to the stability to the international political and economic environment in various regions of the world that I am relatively familiar with.
I normally feel after reading, reviewing, and discussing the events of the previous week that I’m able to discern a direction or constructive theme. Today however, every corner of the world seems mired in some degree of turmoil, and markets are reacting. There is so much noise that it is difficult to decide what is causing this new volatility. Is it China, the Fed, the Mueller investigation, Yellow Jackets, or technology run amuck?