Bloomberg/Lu Wang and Liz McCormick/5-13-2022
“Another stormy week has left investors groping when it comes to the direction of stocks and bonds. Expecting to be led out of the darkness by Wall Street’s best and brightest may be asking too much, given their performance so far this year. As usually happens in twisting markets, it is proving a brutal year to forecast for the securities industry.”
USAGOLD note: Why are people surprised by this? In Saturday’s Financial Times, Gillian Tett quotes a parody on economists by Swedish economist Axel Leijonhufvud written in 1973. “The status of the adult male [of the Econ tribe],” wrote Leijonhufvud, “is determined by his skill at making the ‘modl’ of his ‘field,’ The fact… that most of these ‘modls’ seem to be of little or no practical use, probably accounts for the backwardness and abject cultural poverty of the tribe.” Gold ownership makes sense for the more humble among us precisely because the Cassandras of the economic tribe can’t seem to get it right so much of the time. “These failings,” writes Tett, “were one reason why so few foresaw that 2008 crisis.” It is also why, according to Tett, the Fed stuck to its transitory inflation mantra when a quick foray into “the weeds of the financial system” might have told them otherwise.
