Predictions, You Couldn’t Make Them Up, Or Could You

We all know the one thing we don’t know is what the future will bring, no one has found the crystal ball that will give us a glimpse of the world of tomorrow, some have tried, but their predictions tend to be so woolly they will inevitably fit one of several events, particularly if you wait long enough. Occasionally someone will make a prediction that you know will happen because its something that is inevitable.

So we now have Alan Greenspan, the former chief of the US Federal Reserve predicting another financial crisis but one that will be different from the current economic problems. Well those who look upon Greenspan as some type of financial guru will be heeding his words with great interest, I for one will not. Its a prediction of the obvious, economies go in cycles, that’s a fact. We will see a period of economic growth followed by a period of economic turmoil, its happened in the past and it will happen again.

Ah, but next time it will be different our Guru claims, trying to add credence and weight to his prediction. But again that’s also inevitable. The world changes over time, the factors that drive economies change over time and so the nature of each economic crisis also changes. Greenspan’s prediction would have been of greater benefit if he had made it prior to the current events. But then that would be a demonstration of real skill, something that has been missing from our financial markets for some time.