Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Former Central Banker Admits "[They] Are Making It Up As They Go Along"

Recommended Posts

http://www.zerohedge.com/news/2014-03-03/former-central-banker-admits-they-are-making-it-they-go-along

A few weeks ago, William White (former economist at the Bank of England, the Bank of Canada, and Bank of International Settlements) made a frank admission.

And while we search for assets whose prices are less obviously distorted by malign government intervention, it’s refreshing to hear a mea culpa from a member of the economics “profession”.

White said:

“The analytical underpinnings of what we [mainstream economists] do are actually pretty shaky. A reflection of that fact, is that virtually every aspect you can think of with respect to monetary policy, about best practice, has changed and changed repetitively over the course of the last 50 years. So, this stuff ain’t science.

“Think about what’s happened recently. One, its completely unprecedented. People are making it up as they go along. This is hardly science – building on the pillars of the past.

“Secondly, what they’ve been making up as they go along actually differs across central banks [The Bundesbank, for example, is fighting the threat of high inflation, whereas the Fed is more concerned about the prospect of deflation]. They can’t even agree amongst themselves about what’s the best way to do things.

“I’m becoming more and more convinced that all of the models we use are basically useless.

“It’s surprising that we’ve had this huge crisis that the mainstream didn’t predict. It’s gone on for years, which the mainstream absolutely didn’t predict. I would have thought this was a basis for a fundamental rethink about what we used to think we believed. But that hasn’t happened.

“The policies that we’ve followed – on the monetary side at least – since 2007 are just more of the same demand-stimulating policies that we’ve been following, I think, erroneously, for the last 30 years.

We’ve got the potential to do so much harm by not getting the creation of fiat credit and money right. We’ve got the capacity to do so much harm that we should be focusing much more on making sure that doesn’t happen.”

pic69307.jpg

Just highly paid clowns.

Share this post


Link to post
Share on other sites

The analytical underpinnings of what we [mainstream economists] do are actually pretty shaky :lol:

no shit.

It really is a sick betrayal of peoples trust that economists take part in. People try to be what they think is intellectual. What they believe is objective, scientific, and so, in seeking answers, they look for numbers, and forsake instinct and intuition. When asked to determine is immigration good, they force themselves to subordinate all other concerns to what economists tell them. When asked to determine whether an independent Scotland is good, again they are supposed to look to economists for answers.

Economists cant even see a bubble when its staring them in the face. Much less can they know whether Scotland will elect a business friendly leader, or the UK wont.

As that financier dude said, economists exist only to make astrologists look good (or was it the other way round)

Share this post


Link to post
Share on other sites

“It’s surprising that we’ve had this huge crisis that the mainstream didn’t predict. It’s gone on for years, which the mainstream absolutely didn’t predict.

It's true that they "absolutely didn't predict" it. There were no such predictions from the so called mainstream - at least not in public.

Whether they or some of them knew what was most likely going to happen but just kept quiet - for whatever reason - is quite another matter.

It's also fair to say that it's well proven at least from their public predictions and pompous public pronouncements that they're clueless.

Edited by billybong

Share this post


Link to post
Share on other sites

It's true that they "absolutely didn't predict" it. There were no such predictions from the so called mainstream - at least not in public.

Whether they or some of them knew what was most likely going to happen but just kept quiet - for whatever reason - is quite another matter.

It's also fair to say that it's well proven at least from their public predictions and pompous public pronouncements that they're clueless.

Irving Fisher formulated the concept of debt-deflation in 1933.

Hyman Minsky extended this idea with his Financial Instability Hypothesis in the 60s and 70s.

Steve Keen published a quantitative model of these concepts in 1995 and projected a Second Great Depression early in the 21st Century.

Mainstream economists on the other hand spent eighty odd years getting it wrong, and still don't understand why.

Share this post


Link to post
Share on other sites
Mainstream economists on the other hand spent eighty odd years getting it wrong, and still don't understand why.

It's ok. House prices only go up. Younger people can always pay more for housing.

Give them HTB 1 and 2 and so on, after QE and everything else that has followed house price hyperinflation, with now new rounds of house price hyperinflation. Allow people who can barely spell to be on property-forums discussing their 5+ home property portfolios, fuelled by easy credit.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   212 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.