American Enterprise Institute/Desmond Lachman/1-3-2022
“In recent years, accurate economic forecasting has not been the economic profession’s strong suit. In 2008, it spectacularly failed to anticipate the Great Economic Recession despite the advanced signals that the US housing and credit market bubbles were about to burst. In 2021, with very few exceptions, it failed to anticipate that inflation would accelerate to a forty-year high.… 2022 looks like it might be another year in which the economics profession in general gets caught very flatfooted with its forecasts.”
USAGOLD note: Lachman goes on to outline why we should be worried about the health of the financial system in 2022. He says economists now believe that the banks are much better positioned to weather higher rates than they were in 2008, but they are blind to the vulnerability of “unregulated hedge funds, private equity companies, insurance companies, etc.”
