Friday, March 20, 2009

IMF Fortune Telling

The International Monetary Fund is trying to predict the future of the world's economy and like all other human endeavors, looking into the future is not what it does well. The funny thing is the IMF prefaces it's latest report by noting that..."the prolonged financial crisis has battered global economic activity beyond what was previously anticipated". Thus it is that having failed to predict the current fiasco, and ready to admit that failing the IMF still ploughs ahead and predicts a turnaround in 2010. However for the remainder of this year the IMF charts a safe course and predicts massive contractions in the world economy. That one seem a safe bet. The notion that things may get better in 2010 seems odd to me.
However the IMF remains cautious and hedges the 2010 prediction by noting that if governments fail to sort out the banking crisis contraction might be the order of the day in 2010....Therefore Conchscooter's prediction, coming from one who despises claims at prophecy(!) is lots more pain for the foreseeable future. In light of the fact the foreseeable future doesn't exist, as explained above, I feel my prediction has a one hundred percent likelihood of being accurate.
The recent blip in the stock market with Mr Jones' basket of shares rising to somewhere north of 7500 has done lots to make people start asking for more predictions of good times ahead. "Have we bottomed out?" the mainstream press asks. And just like the IMF's predictions, the question is based not on gauges of actual numbers but on what we want. We'd like this to be the bottom of the fall in economic activity, no doubt about that...but what we like and what we get never will match if we base our hopes on predictions. Common sense tells us to look at the numbers, but that's too scary for most people.
In decades past when predictions came spewing out of the mouths of oracles in the press and big business it was just another irritation in a world dominated by television. These days with the whole order of our world tilting it seems irresponsible, to put it mildly to make predictions. Looking at the numbers says everything that needs to be said, there are no predictions required, unless they are to calm everyone's nerves. Debt is sky high and increasing, industrial output is slumping everywhere, political leaders have exhibited no cohesive unified strategy to deal with a world wide crisis and confidence is in the toilet. Does anyone need a prediction to explain that the future looks increasingly grim? Why should all this turn around next year? Because we want it to is why, and for me that's just not good enough.

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