04 Dec 2009

Who Said It?

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There is no doubt that the world monetary and banking system is unsound, and would be unbelievably better off if governments returned these vital institutions to the free market. For their part, my…critics have always agreed that tariffs and other government barriers to trade are immoral and inefficient.

Thus we all agree on the theoretical economics and the value judgments. Our real disagreement, then, is empirical. Namely, is the current situation really perched on the edge of a precipice?

I believe the answer is no, and that’s why I predicted that (absent a terrorist attack) the dollar would strengthen against the euro in 2007, and that (despite the inverted yield curve) there would be no recession, as officially defined. In making such predictions, I am fully aware that I run the risk of mimicking Irving Fisher’s infamous statements immediately before the Crash in 1929. — February 15, 2007

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