All is quiet on the western front

Edmund Halley set a high benchmark when he predicted the date of the arrival of a comet and the part of the sky it would appear in.  In one stroke he removed the mysticism from comets and showed how mathematics would revolutionise our lives. He did have an enormously powerful ally - the genius of Issac Newton who discovered the theory of gravity and showed how it impacted all the bodies in our solar system. However, he backed up that theory by an exhaustive search for past sightings of comets. Just pause for a second and imagine the effort that would take in 18th century England. No internet, no glossy books on comets, and no local library. In fact most of the data he trawled would have been in bizarre books of semi-religious rantings and of dubious accuracy.

How we wish that weather forecasters, political pundits and economic futurists could even approximate to the brilliant success of Edmund.

Thus I turn to us bloggers poor attempts to emulate Edmund's greatness. I note today that at the close of trading for 11 November 2015, the Dow Jones is unremarkable.

While I have little respect for the lack of insight behind this index, I do acknowledge that if the world economy collapsed, it would have a sharp downward line, as shown in the graph of the Great Depression.

So, I think we can safely conclude that the markets have not crashed and the world economy is puttering along in a generally uninspired fashion. Prediction: Rememberance Day Crash, Status: Debunked!

What about my own humble prediction a few weeks later? I promise you it does not come close to the meticulousness of Edmund's, and I suggest that is remains as a prediction mostly due to the fact that it is still a future possibility. The big problem with my prediction is that I need the US to stop pumping money into their economy before it will work. There has to be a few months for the investors to detect that their market trading investments are now worthless - it won't happen the day after the interest rates rise:

This is something I was expecting to have happened by now. If it doesn't happen before mid December, I'll have to go out and buy my copy of Yeoman the old fashioned way.

Sorry - I could not resist another picture of Peter's generals partying on my economic surpluses.

Let me finish with one more Huzzah! for a brilliant "Man in White Coat", who even knew we would see a comet in 1986!

 

Comments

[PythonMagus]

To be fair, I didn't have a turn to play and there was nothing much on the blog to read. I should have been watching James Bond in Gold Class. So when life gives you lemons, you write an article.

The Halley reference is simply because I have recently seen the Cosmos episode on him, and wanted to add my own congratulations to his clever use of science.

I agree market crashes will continue to happen, and after they happen the pundits will always ask, "How could be have been so stupid?", but the issue is knowing when to bail. In the mean time, "what are economic fundamentals?" is the real question. The answer can only be "trust between all people of the world". The amount of trust needed so far exceeds the amount of precious metals available that they are only minor players in this global economy.

I join Pope Francis in his call for justice and good faith between all people. Otherwise, like Paul, I watch the markets nervously. I'm not re-entering the stock market until Easter or until the correction happens, and will defer that if the US keeps up their monetary policy of pumping cash.

[Paul]

The 11th of November came and went, and I was going to do a post and admit that my prediction was wrong. Unfortunately I was too busy with a trial at work.

The Python has admirably pointed out my error, and I cop everything he has thrown at me.

So what now? I still think the big crash is coming, and soon. I underestimated the extent to which the central banks would go to prop up their stock markets with both money printing and now blatant intervention. The prices are now so artificial, mostly because of selected strategic interventions which derive ultimately from the central banks, that they can hardly be called markets. These artificial markets are not a reflection of the health of the world economies, which continue to deteriorate, but for now are just preventing major bank runs and derivative calamities.

The economic fundamentals continue to get worse every month, and the misreporting of data to make things appear better has become a joke (aka the recent alleged US employment data). Gold and silver are manipulated, to prop up the US dollar, however the ratio of paper gold to real gold is now so large that only a moron would believe paper gold is as good as the real thing.

It is impossible to maintain a complete fantasy forever. Reality always catches up, and it will soon. But no more dates from me, only "soon".