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This page attempts to list various predictions made by Austrian economists about important economic and other developments. '''UNDER CONSTRUCTION.'''
This page attempts to list various predictions made by Austrian economists about important economic and other developments.


'''Important note:''' Austrian economists, as Austrian economists, or [[Praxeology|praxeologists]], do not predict. They can predict not as formal economists, or praxeologists, but, rather, in their role as [[Thymology|thymologists]], or economic historians. In praxeology, A causes B, other things remaining the same. But, in the real world, other things cannot be relied upon to always remain constant. Therefore, predictions of the "A will necessarily lead to B" type are strictly prohibited. Instead, praxeologists, but not thymologists, must limit themselves to statements of the if-A then-B variety.<ref name="Block_Thymologists">Walter Block. [http://www.lewrockwell.com/block/block168.html Austrian Thymologists Who Predicted the Housing Bubble], ''LRC.com'', December 22, 2010. Referenced 2011-11-29.</ref>
'''Important note:''' Austrian economists, as Austrian economists, or [[Praxeology|praxeologists]], do not predict. They can predict not as formal economists, or praxeologists, but, rather, in their role as [[Thymology|thymologists]], or economic historians. In praxeology, A causes B, other things remaining the same. But, in the real world, other things cannot be relied upon to always remain constant. Therefore, predictions of the "A will necessarily lead to B" type are strictly prohibited. Instead, praxeologists, but not thymologists, must limit themselves to statements of the if-A then-B variety.


With this in mind, it is interesting that Austrian economists have been quite successful at predicting major events.<ref name="Block_Thymologists">Walter Block. [http://www.lewrockwell.com/block/block168.html Austrian Thymologists Who Predicted the Housing Bubble], ''LRC.com'', December 22, 2010. Referenced 2011-11-29.</ref>
{{TOC right}}
==The Great Depression==
==The Great Depression==
The [[Great Depression]] was predicted by several Austrian economists:
The [[Great Depression]] was predicted by several Austrian economists:


* In Austria, economist [[Ludwig von Mises]] saw the problem developing in its early stages and predicted to his colleagues in 1924 that the large Austrian bank, [[Credit Anstalt]], would eventually crash. He wrote a full analysis of [[Irving Fisher|Irving Fisher’s]] monetary views, published in 1928, where he targeted Fisher’s reliance on price indexes as a key vulnerability that would bring about the Great Depression, concluding: "because of the imperfection of the index number, these calculations would necessarily lead in time to errors of very considerable proportions."<!-- could not find the actual source! (Mises, Ludwig von. [1928] 1978. Geldwertstabilisierung and Konjunkturpolitik [Monetary Stabilization and Cyclical Policy]. Jena: Gustav Fischer. English translation by Bettina Bien Greaves: in On the Manipulation of Money and Credit. Dobbs Ferry, NY: Free Market Books. ) But see also [http://mises.org/resources/3361 this] (recommended [http://www.lewrockwell.com/thornton/thornton21.html here]) -->
* In Austria, economist [[Ludwig von Mises]] saw the problem developing in its early stages and predicted to his colleagues in 1924 that the large Austrian bank, [[Creditanstalt]], would eventually crash. He wrote a full analysis of [[Irving Fisher|Irving Fisher’s]] monetary views, published in 1928, where he targeted Fisher’s reliance on price indexes as a key vulnerability that would bring about the Great Depression, concluding: "because of the imperfection of the index number, these calculations would necessarily lead in time to errors of very considerable proportions."<ref name="Mises_Causes">Ludwig von Mises. [http://mises.org/resources/3361 "The Causes of the Economic Crisis, and Other Essays Before and After the Great Depression"], collection of works reposted from 1923 and 1928. Referenced 2011-01-12.</ref><!-- could use more actual quotes, but good. Original source said to be: Mises, Ludwig von. [1928] 1978. Geldwertstabilisierung and Konjunkturpolitik [Monetary Stabilization and Cyclical Policy]. Jena: Gustav Fischer. English translation by Bettina Bien Greaves: in On the Manipulation of Money and Credit. Dobbs Ferry, NY: Free Market Books. ) But see also [http://mises.org/resources/3361 this] (recommended [http://www.lewrockwell.com/thornton/thornton21.html here]) -->
* [[F. A. Hayek]] published several articles in early 1929 in which he predicted the collapse of the American boom. [[Felix Somary]], who like Mises was a student at the University of Vienna, issued several dire warnings in the late 1920s.
* [[F. A. Hayek]] published several articles in early 1929 in which he predicted the collapse of the American boom.{{Citation needed|Could really use the original resource}}  [[Felix Somary]], who like Mises was a student at the University of Vienna, issued several dire warnings in the late 1920s.{{Citation needed|Could really use the original resource}}<ref name="Thornton_Mises">Mark Thornton. [http://mises.org/journals/scholar/Thornton16.pdf "Mises vs. Fisher on Money, Method, and Prediction: The Case of the Great Depression"] (pdf), p.13-15; December 2006. Referenced 2011-12-13.</ref>
* In America economists [[Benjamin Anderson]] and [[E.C. Harwood]] also warned that the Federal Reserve policies would cause a crisis, and like Somary, they were largely ignored.<!-- (Skousen, Mark 1991. Economics on Trial: Lies, Myths, and Realities, Homewood, IL: Business One Irvin. p. 104-6) --><ref name="Thornton_Mises">Mark Thornton. [http://mises.org/journals/scholar/Thornton16.pdf "Mises vs. Fisher on Money, Method, and Prediction: The Case of the Great Depression"] (pdf), p.13-15; December 2006. Referenced 2011-12-13.</ref> Albert H. Wiggin summed up in 1931 that the "depression has been prolonged and not alleviated by delay in making necessary readjustments."<ref name="Rothbard_Wiggin">Murray N. Rothbard. [[America's Great Depression]], Chapter 9, referenced 2011-01-11.</ref>
* In America economists [[Benjamin Anderson]] and [[E.C. Harwood]] also warned that the Federal Reserve policies would cause a crisis, and like Somary, they were largely ignored.<!-- (Skousen, Mark 1991. Economics on Trial: Lies, Myths, and Realities, Homewood, IL: Business One Irvin. p. 104-6) --><ref name="Thornton_Mises" /> Albert H. Wiggin summed up in 1931 that the "depression has been prolonged and not alleviated by delay in making necessary readjustments."<ref name="Rothbard_Wiggin">Murray N. Rothbard. [[America's Great Depression]], Chapter 9, referenced 2011-01-11.</ref>
 
==Post-WWII recovery==
In the 1945 symposium ''Financing American Prosperity'', several prominent economists discussed the financial and other economic problems of the transition after [[World War II]] and suggested solutions. With the exception of [[Benjamin Anderson]], who called for "drastic economies in the postwar period" and insisted that "proposals for expanding federal expenditures after the war must be fought all along the line", the contributors all advocated a scope of federal expenditures much larger than that before the war.<ref name="Financing_Prosperity">Contributors: Benjamin M. Anderson, John Maurice Clark, Howard S. Ellis, Alvin H. Hansen, Sumner H. Slichter and John H. Williams. Editors: Paul T. Homan, Fritz Machlup.  [[Financing American Prosperity]], A Symposium of Economists. The Twentieth Century Fund, first published October 1945. Referenced 2012-05-04.</ref>
 
The "Depression of 1946" may be one of the most widely predicted events that never happened in American history. As the war was winding down, leading Keynesian economists of the day argued, as [[Alvin Hansen]] did, that "the government cannot just disband the Army, close down munitions factories, stop building ships, and remove all economic controls." After all, the belief was that the only thing that finally ended the Great Depression of the 1930s was the dramatic increase in government involvement in the economy. However, the government canceled war contracts, and its spending fell from $84 billion in 1945 to under $30 billion in 1946. By 1947, the government was paying back its massive wartime debts by running a budget surplus of close to 6 percent of GDP. The military released around 10 million Americans back into civilian life. Most economic controls were lifted, and all were gone less than a year after V-J Day. In short, the economy underwent what the historian Jack Stokes Ballard referred to as the "shock of peace."
 
If the wartime government stimulus had ended the Great Depression, its winding down would certainly lead to its return. At least that was the consensus of almost every economic forecaster, government and private. In August 1945, the Office of War Mobilization and Reconversion forecast that 8 million would be unemployed by the spring of 1946, which would have amounted to a 12 percent unemployment rate. In September 1945, Business Week predicted unemployment would peak at 9 million, or around 14 percent. Leo Cherne of the Research Institute of America and Boris Shishkin, an economist for the American Federation of Labor, forecast 19 and 20 million unemployed respectively — rates that would have been in excess of 35 percent!
 
After the Second World War, unemployment rates, artificially low because of wartime conscription, rose a bit, but remained under 4.5 percent in the first three postwar years — below the long-run average rate of unemployment during the 20th century. Some workers voluntarily withdrew from the labor force, choosing to go to school or return to prewar duties as housewives. But, many who lost government-supported jobs in the military or in munitions plants found employment as civilian industries expanded production—in fact civilian employment grew, on net, by over 4 million between 1945 and 1947. Household consumption, business investment, and net exports all boomed as government spending receded.<ref name="Taylor_Stimulus">Jason E. Taylor and Richard K. Vedder. [http://www.cato.org/pubs/policy_report/v32n3/cpr32n3-1.pdf "Stimulus by Spending Cuts: Lessons from 1946"] (pdf), ''Cato Policy Report'', May/June 2010, Vol. XXXII No.3, referenced 2012-05-04.</ref>


==End of the Bretton Woods system==
==End of the Bretton Woods system==
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* Hazlitt, Henry. 1934 until 1946 [http://mises.org/resources/3967 From Bretton Woods to World Inflation: A Study of Causes and Consequences] (editorials for New York Times) <!-- see [http://mises.org/daily/4511/Hazlitts-Battle-with-Bretton-Woods here] for a summary, would be nice to find the actual NYT editorials -->
* Hazlitt, Henry. 1934 until 1946 [http://mises.org/resources/3967 From Bretton Woods to World Inflation: A Study of Causes and Consequences] (editorials for New York Times) <!-- see [http://mises.org/daily/4511/Hazlitts-Battle-with-Bretton-Woods here] for a summary, would be nice to find the actual NYT editorials -->
==Savings and loan crisis==
In his 1982 [http://mises.org/rothbard/agd/introduction.asp#fourth introduction] to [[America's Great Depression]], Murray Rothbard predicted the [[Savings and loan crisis]] and hinted at [[Black Monday (1987)|trouble in the stock market]]:
: "... The fact that Reaganomics cannot bring down interest rates for long puts a permanent brake on the stock market, which has been in chronic trouble since the mid-1960s and is increasingly in shaky shape. The bond market is already on the way to collapse. The housing market has at last been stopped short by the high mortgage rates, and the same has happened to many collectibles. Unemployment is chronically higher each decade, and is now at the highest since the Great Depression, with no sign of improvement. The accelerating inflationary boom of the three decades since the end of World War II has loaded the economy with unsound investments and with an oppressive mountain of debt: consumer, homeowner, business, and international. In recent decades, business has in effect relied on inflation to liquidate the debt, but if "disinflation" (the lessening of inflation in 1981 and at least the first half of 1982) is to continue, what will happen to the debt? Increasingly, the answer will be bankruptcies, and deeper depression. The bankruptcy rate is already the highest since the Great Depression of the 1930s. [[Savings and loan association|Thrift institutions]] caught between high interest rates to their depositors and low rates earned on long-time mortgages, will increasingly become bankrupt or be forced into quasi-bankrupt mergers with other thrifts which will be dragged down by the new burdens. Even commercial banks, protected by the safety blanket of the FDIC for half a century, are now beginning to go down the drain, dragged down by their unsound loans of the past decade."
<!--
Full paragraph:
: "But if Reaganomics is doomed to be a fiasco, what is likely to happen? Will we suffer a replay, as many voices are increasingly predicting, of the Great Depression of the 1930s? Certainly there are many ominous signs and parallels. The fact that Reaganomics cannot bring down interest rates for long puts a permanent brake on the stock market, which has been in chronic trouble since the mid-1960s and is increasingly in shaky shape. The bond market is already on the way to collapse. The housing market has at last been stopped short by the high mortgage rates, and the same has happened to many collectibles. Unemployment is chronically higher each decade, and is now at the highest since the Great Depression, with no sign of improvement. The accelerating inflationary boom of the three decades since the end of World War II has loaded the economy with unsound investments and with an oppressive mountain of debt: consumer, homeowner, business, and international. In recent decades, business has in effect relied on inflation to liquidate the debt, but if "disinflation" (the lessening of inflation in 1981 and at least the first half of 1982) is to continue, what will happen to the debt? Increasingly, the answer will be bankruptcies, and deeper depression. The bankruptcy rate is already the highest since the Great Depression of the 1930s. [[Savings and loan association|Thrift institutions]] caught between high interest rates to their depositors and low rates earned on long-time mortgages, will increasingly become bankrupt or be forced into quasi-bankrupt mergers with other thrifts which will be dragged down by the new burdens. Even commercial banks, protected by the safety blanket of the FDIC for half a century, are now beginning to go down the drain, dragged down by their unsound loans of the past decade."
-->


==Dot-com bubble==
==Dot-com bubble==
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The [[Dot-com bubble]] and its bust was foreseen by several Austrian economists.<ref name="Thornton_Bubble">Mark Thornton. [http://www.independent.org/pdf/tir/tir_09_1_1_thornton.pdf "Who Predicted the Bubble? Who Predicted the Crash?"] (pdf), ''The Independent Review'', v. IX, n. 1, Summer 2004, ISSN 1086-1653, Copyright © 2004, pp. 5–30. Referenced 2011-12-13.</ref> In October, 1999, [[Sean Corrigan]] pointed out a massive bubble and implied it will burst. He compared the conditions to those during the late summer of [[Black Monday (1987)|1987]], the [[Japanese asset price bubble|Japanese bubble]] of the late 1980s, and the "[[roaring Twenties]]" in the United States. <ref name="Corrigan_Pop">Sean Corrigan. [http://mises.org/daily/317 "Will the Bubble Pop?"], ''Mises Daily'', October 18, 1999. Referenced 2012-01-08.</ref> In March, 2000, [[Christopher Mayer]] noted that all the ingredients of a bubble - fundamental (i.e., a technological revolution), financial (i.e., a surge in money and credit) and psychological (i.e., a suspension of belief in traditional valuation measures) - appear to exist in the current bull market and predicted it will end with a bust.<ref name="Mayer_Over-Valued">Christopher Mayer. [http://mises.org/daily/405 "The Meaning of 'Over-Valued'"], ''Mises Daily'', March 30, 2000. Referenced 2011-12-13.</ref> In August, 2000, [[William Anderson]] pointed to the bubble in the high-technology sector, mentioned the negative consequences of a regulatory attack at Microsoft<ref name="Anderson_Delusion">William L. Anderson. [http://mises.org/freemarket_detail.aspx?control=316 "New Economy, Old Delusion"], ''The Free market'', August 2000, Volume 18, Number 8. Referenced 2012-01-08.</ref> (which was analyzed a year earlier by [[Thomas DiLorenzo]]<ref name="DiLorenzo_Sneak">DiLorenzo, Thomas J. [http://mises.org/daily/297 "Regulatory Sneak Attack."], ''Mises Daily'', September 16, 1999. Referenced 2012-01-08.</ref>). There were others.
The [[Dot-com bubble]] and its bust was foreseen by several Austrian economists.<ref name="Thornton_Bubble">Mark Thornton. [http://www.independent.org/pdf/tir/tir_09_1_1_thornton.pdf "Who Predicted the Bubble? Who Predicted the Crash?"] (pdf), ''The Independent Review'', v. IX, n. 1, Summer 2004, ISSN 1086-1653, Copyright © 2004, pp. 5–30. Referenced 2011-12-13.</ref> In October, 1999, [[Sean Corrigan]] pointed out a massive bubble and implied it will burst. He compared the conditions to those during the late summer of [[Black Monday (1987)|1987]], the [[Japanese asset price bubble|Japanese bubble]] of the late 1980s, and the "[[roaring Twenties]]" in the United States. <ref name="Corrigan_Pop">Sean Corrigan. [http://mises.org/daily/317 "Will the Bubble Pop?"], ''Mises Daily'', October 18, 1999. Referenced 2012-01-08.</ref> In March, 2000, [[Christopher Mayer]] noted that all the ingredients of a bubble - fundamental (i.e., a technological revolution), financial (i.e., a surge in money and credit) and psychological (i.e., a suspension of belief in traditional valuation measures) - appear to exist in the current bull market and predicted it will end with a bust.<ref name="Mayer_Over-Valued">Christopher Mayer. [http://mises.org/daily/405 "The Meaning of 'Over-Valued'"], ''Mises Daily'', March 30, 2000. Referenced 2011-12-13.</ref> In August, 2000, [[William Anderson]] pointed to the bubble in the high-technology sector, mentioned the negative consequences of a regulatory attack at Microsoft<ref name="Anderson_Delusion">William L. Anderson. [http://mises.org/freemarket_detail.aspx?control=316 "New Economy, Old Delusion"], ''The Free market'', August 2000, Volume 18, Number 8. Referenced 2012-01-08.</ref> (which was analyzed a year earlier by [[Thomas DiLorenzo]]<ref name="DiLorenzo_Sneak">DiLorenzo, Thomas J. [http://mises.org/daily/297 "Regulatory Sneak Attack."], ''Mises Daily'', September 16, 1999. Referenced 2012-01-08.</ref>). There were others.


<small>Anderson, 2000; Corrigan, 1999; Deden, 1999; DiLorenzo, 1999; Grant, 1996A, 1996B; Hülsmann, 2000; Mayer, 2000; Reisman, 1999; Sennholz, 2000; Shostak, 1999; Thornton, 2000.</small>
'''Reference shortlist:'''<br>
<small>Anderson, 2000; Corrigan, 1999; Deden, 1999; DiLorenzo, 1999; Grant, 1996A, 1996B; Hülsmann, 2000; Mayer, 2000; Paul, 2000; Reisman, 1999; Sennholz, 2000; Shostak, 1999; Thornton, 2000.</small>


* Anderson, William. 2000. "[http://mises.org/freemarket_detail.aspx?control=316 New Economy, Old Delusion.]" The Free Market, August
* Anderson, William. 2000. "[http://mises.org/freemarket_detail.aspx?control=316 New Economy, Old Delusion.]" The Free Market, August
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==Housing bubble==
==Housing bubble==
{{Main|Austrian predictions/Housing bubble}}
During and after the burst of the [[Dot-com bubble]], numerous economists predicted the 2000s housing bubble that culminated in the [[Great Recession]] from 2008 onward.
During and after the burst of the [[Dot-com bubble]], numerous economists predicted the 2000s housing bubble that culminated in the [[Great Recession]] from 2008 onward.


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Investor [[Peter Schiff]] acquired fame in a series of TV appearances (most in 2006 and 2007), where he opposed a multitude of financial experts and claimed that a bust was to come.<ref name="Schiff_Right">Schiff, Peter. "[http://www.youtube.com/watch?v=2I0QN-FYkpw&feature=related Peter Schiff Was Right]" (video). Referenced 2011-01-10.</ref> He was warning about the speculation, ARMs, houses that couldn't be sold, people walking away from them and coming bailouts for several years before in print.<ref name="Schiff_Commentary_2003">Schiff, Peter. [http://www.europac.net/commentaries/fed_official_admits_emperor_has_no_clothes "Fed official admits the emperor has no clothes!"], Commentary, March 10, 2003. Referenced 2011-01-10.</ref><ref name="Schiff_Commentary_2004">Schiff, Peter. [http://www.europac.net/commentaries/arms_way_tender_trap_adjustable_rate_mortgages "In Arm's Way: The Tender Trap of Adjustable Rate Mortgages."], Commentary, May 7, 2004. Referenced 2011-01-10.</ref><ref name="Schiff_Commentary_2005">Schiff, Peter. [http://www.europac.net/commentaries/housing_speculation_more_rampant_you_think "Housing Speculation is More Rampant Than You Think."], Commentary, July 5, 2005. Referenced 2011-01-10.</ref>
Investor [[Peter Schiff]] acquired fame in a series of TV appearances (most in 2006 and 2007), where he opposed a multitude of financial experts and claimed that a bust was to come.<ref name="Schiff_Right">Schiff, Peter. "[http://www.youtube.com/watch?v=2I0QN-FYkpw&feature=related Peter Schiff Was Right]" (video). Referenced 2011-01-10.</ref> He was warning about the speculation, ARMs, houses that couldn't be sold, people walking away from them and coming bailouts for several years before in print.<ref name="Schiff_Commentary_2003">Schiff, Peter. [http://www.europac.net/commentaries/fed_official_admits_emperor_has_no_clothes "Fed official admits the emperor has no clothes!"], Commentary, March 10, 2003. Referenced 2011-01-10.</ref><ref name="Schiff_Commentary_2004">Schiff, Peter. [http://www.europac.net/commentaries/arms_way_tender_trap_adjustable_rate_mortgages "In Arm's Way: The Tender Trap of Adjustable Rate Mortgages."], Commentary, May 7, 2004. Referenced 2011-01-10.</ref><ref name="Schiff_Commentary_2005">Schiff, Peter. [http://www.europac.net/commentaries/housing_speculation_more_rampant_you_think "Housing Speculation is More Rampant Than You Think."], Commentary, July 5, 2005. Referenced 2011-01-10.</ref>


'''Reference shortlist:'''<br>
<small>Anderson, 2001, 2003, 2007; Armentano, 2004; Beale, 2009; Blumen, 2002, 2004, 2005; Corrigan, 2002; Crovelli, 2006; DeCoster, 2003; Duffy, 2005A, 2005B, 2005C, 2005D, 2006, 2007A, 2007B, 2007C, 2007D; Economics of contempt, 2008; Englund, 2004, 2005A, 2005B, 2005C, 2005D, 2006, 2007, 2008; French, 2005; Grant, 2001; Karlsson, 2004; MacKenzie, 2003; Mayer, 2003; Mueller, 2004; Murphy, 2007, 2008; North, 2002, 2005; Paul, 2000, 2002, 2003; Polleit, 2006; Ptak, 2003; Rockwell, 2002, 2008; Rogers, 2005; Schiff, Undated A, Undated B, Undated C, Undated D, 2003A, 2003B, 2003C, 2004A, 2004B, 2005A, 2005B, 2005C, 2005D, 2006A, 2006B, 2006C, 2007A, 2007B; Sennholz, 2002; Shostak, 2003, 2005; Thornton, 2004A, 2004B, 2005A, 2005B, 2005C, 2006, 2007A, 2007B, 2007C, 2007D; Trask, 2003; Wenzel, 2004; See also Woods (2009, p. 188 for further bibliography).</small>


<small>Anderson, 2001, 2003, 2007; Armentano, 2004; Beale, 2009; Blumen, 2002, 2004, 2005; Corrigan, 2002; Crovelli, 2006; DeCoster, 2003; Duffy, 2005A, 2005B, 2005C, 2005D, 2006, 2007A, 2007B, 2007C, 2007D; Economics of contempt, 2008; Englund, 2004, 2005A, 2005B, 2005C, 2005D, 2006, 2007, 2008; French, 2005; Grant, 2001; Karlsson, 2004; Mayer, 2003; Murphy, 2007, 2008; North, 2002, 2005; Paul, 2000, 2002; Polleit, 2006; Ptak, 2003; Rockwell, 2008; Rogers, 2005; Schiff, Undated A, Undated B, Undated C, Undated D, 2003A, 2003B, 2003C, 2004A, 2004B, 2005A, 2005B, 2005C, 2005D, 2006A, 2006B, 2006C, 2007A, 2007B; Sennholz, 2002; Shostak, 2003, 2005; Thornton, 2004A, 2004B, 2005, 2006; Trask, 2003; Wenzel, 2004; See also Woods (2009, p. 188 for further bibliography).</small>
* Anderson, William L. 2001. "[http://mises.org/daily/617 The Party is Over]," February 20
 
* Anderson, William L. 2003. "[http://mises.org/daily/1265 Recovery or Boomlet?]" July 07
Anderson, William L. 2001. "[http://mises.org/daily/617 The Party is Over]," February 20 <!-- more of a summary of the preceding boom and a hint about a coming bust -->
* Anderson, William L. 2007. "[http://mises.org/daily/2675 The Party is Over – Again]," August 30
 
* Armentano, Dominick. 2004. "[http://www.cato.org/pub_display.php?pub_id=2510 Memo to Federal Reserve: Increase Interest Rates Now!]"
Anderson, William L. 2003. "[http://mises.org/daily/1265 Recovery or Boomlet?]" July 07 <!-- noting the temporary recovery is not a recovery -->
* Beale, Theodore. 2009. "[http://superstore.wnd.com/books/WND-Books/The-Return-of-the-Great-Depression-Autographed-Hardcover The Return of the Great Depression]"
 
* Blumen, Robert. 2002. "[http://mises.org/daily/986 Fannie Mae Distorts Markets.]" Mises Daily, June 17
Anderson, William L. 2007. "[http://mises.org/daily/2675 The Party is Over – Again]," August 30 <!-- predicts the coming stock market meltdown -->
* Blumen, Robert. 2004. "[http://www.lewrockwell.com/orig3/blumen4.html All Real Estate, All the Time]". March 8
 
* Blumen, Robert. 2005. "[http://blog.mises.org/3566/housing-bubble-are-we-there-yet/ Housing Bubble: Are We There Yet?]" May 8
Armentano, Dominick. 2004. "[http://www.cato.org/pub_display.php?pub_id=2510 Memo to Federal Reserve: Increase Interest Rates Now!]" <!-- notes the rise of the housing bubble and foretells a bust -->
* Corrigan, Sean. 2002. "[http://mises.org/daily/994 The Trouble with Debt]". July 01
 
* Crovelli, Mark R. 2006. "[http://www.kitco.com/ind/crovelli/may312006.html Gold, Inflation, And... Austria?]" May 31
Beale, Theodore. 2009. "[http://superstore.wnd.com/books/WND-Books/The-Return-of-the-Great-Depression-Autographed-Hardcover The Return of the Great Depression]" <!-- according to the book description, the then unfolding recession will be much larger than expected -->
* De Coster, Karen. 2003. "[http://karendecoster.com/the-house-that-greenspan-built-irrationally-exuberant-wall-street-welfare-parasites-and-their-fed-god.html The House that Greenspan Built: Irrationally Exuberant Wall Street Welfare Parasites and Their Fed-God.]" September 12
 
* Duffy, Kevin. 2005A "[http://www.lewrockwell.com/orig5/duffy2.html The Super Bowl Indicator,]" February 5
Blumen, Robert. 2002. "[http://mises.org/daily/986 Fannie Mae Distorts Markets.]" Mises Daily, June 17 <!-- spells out the effect of Fannie and Freddie on the housing market, shows the systemic risk and foresees the coming bailout -->
* Duffy, Kevin. 2005B. "[http://www.lewrockwell.com/orig5/duffy3.html Honey, I Shrunk the Net Worth]," March 3
 
* Duffy, Kevin. 2005C. "[http://www.lewrockwell.com/orig5/duffy4.html Alan, We Have a Problem,]" August 2
Blumen, Robert. 2004. "[http://www.lewrockwell.com/orig3/blumen4.html All Real Estate, All the Time]". March 8 <!-- housing as the unstable driver of economic activity in the US -->
* Duffy, Kevin. 2005D. "[http://www.lewrockwell.com/orig5/duffy5.html Panic Now and Beat the Rush,]" September 24
 
* Duffy, Kevin. 2006. "[http://www.lewrockwell.com/orig5/duffy8.html Are Mortgage Borrowers Rational?]" June 24
Blumen, Robert. 2005. "[http://blog.mises.org/3566/housing-bubble-are-we-there-yet/ Housing Bubble: Are We There Yet?]" May 8 <!-- documents rise of the bubble with many resources -->
* Duffy, Kevin. 2007A. "[http://www.lewrockwell.com/duffy/duffy10.html It’s a Mad, Mad, Mad, Mad World,]" May 22
 
* Duffy, Kevin. 2007B. "[http://www.bearingasset.com/media/media_barrons_20070618.pdf For Whom Do the Bells Toll?]" Barron’s, June 18
Corrigan, Sean. 2002. "[http://mises.org/daily/994 The Trouble with Debt]". July 01 <!-- Shows the blooming business among all the bankruptcies, notes that real estate bubbles tend to pop several years after stock market bubbles, and that mortgages may fare much worse compared to stocks... along with their owners. -->
* Duffy, Kevin. 2007C. "[http://www.lewrockwell.com/duffy/duffy11.html Financial Markets on Crack,]" August 22
 
* Duffy, Kevin. 2007D. "[http://www.lewrockwell.com/duffy/duffy12.html Mr. Mozilo Goes to Washington,]" September 15
Crovelli, Mark R. 2006. "[http://www.kitco.com/ind/crovelli/may312006.html Gold, Inflation, And... Austria?]" May 31 <!-- summarizes the ABCT and says commercial and residential real estate markets are poised to rupture violently -->
* Economics of contempt. 2008. "[http://economicsofcontempt.blogspot.com/2008/07/official-list-of-punditsexperts-who.html The Unofficial List of Pundits/Experts Who Were Wrong on the Housing Bubble.]" July 16
 
* Englund, Eric. 2004. "[http://www.lewrockwell.com/englund/englund13.html Monetizing Envy and America’s Housing Bubble]". July 19
De Coster, Karen. 2003. "[http://karendecoster.com/the-house-that-greenspan-built-irrationally-exuberant-wall-street-welfare-parasites-and-their-fed-god.html The House that Greenspan Built: Irrationally Exuberant Wall Street Welfare Parasites and Their Fed-God.]" September 12 <!-- really just a series of links to other resources -->
* Englund, Eric. 2005A. "[http://www.lewrockwell.com/englund/englund24.html Houses Are Consumer Durables, Not Investments,]" June 8
 
* Englund, Eric. 2005B. "[http://www.lewrockwell.com/englund/englund25.html Diminishing Property Rights Will Lead to a Higher Rate of Mortgage Defaults.]" June 28
Duffy, Kevin. 2005A "[http://www.lewrockwell.com/orig5/duffy2.html The Super Bowl Indicator,]" February 5 <!-- likens the boom to the dot-com bubble, hinting that the result will be the same -->
* Englund, Eric. 2005C. "[http://www.lewrockwell.com/englund/englund27.html When the Housing Bubble Bursts, Will President Bush Practice Mugabenomics?]" July, 19
 
* Englund, Eric. 2005D. "[http://www.lewrockwell.com/englund/englund30.html When Will America's Housing Bubble Burst?]" November 4
Duffy, Kevin. 2005B. "[http://www.lewrockwell.com/orig5/duffy3.html Honey, I Shrunk the Net Worth]," March 3 <!-- likens the boom to the dot-com bubble, hinting that the result will be the same -->
* Englund, Eric. 2006. "[http://www.lewrockwell.com/englund/englund34.html The Federal Reserve and Housing: A Cluster of Errors?]" April 22
 
* Englund, Eric. 2007. "[http://www.lewrockwell.com/englund/englund41.html From Prime to Subprime, America's Home-Mortgage Meltdown Has Just Begun.]" September 24
Duffy, Kevin. 2005C. "[http://www.lewrockwell.com/orig5/duffy4.html Alan, We Have a Problem,]" August 2 <!-- about the bubble reaching its peak, hinting at trouble -->
* Englund, Eric. 2008. "[http://www.lewrockwell.com/englund/englund43.html Countrywide Financial Corporation and the Failure of Mortgage Socialism.]" January 28
 
* French, Doug. 2005. "[http://mises.org/daily/4403 Condo-mania.]" July 11
Duffy, Kevin. 2005D. "[http://www.lewrockwell.com/orig5/duffy5.html Panic Now and Beat the Rush,]" September 24 <!-- about the coming financial storm -->
* Grant, James. 2001. "[http://www.nytimes.com/2001/09/09/opinion/09GRAN.html?ex=1001147153&ei=1&en=898b/8611aaca6946 Sometimes the Economy Needs a Setback.]" New York Times. September 9
 
* Karlsson, Stefan. 2004. "[http://mises.org/daily/1670 America's Unsustainable Boom.]" November 8
Duffy, Kevin. 2006. "[http://www.lewrockwell.com/orig5/duffy8.html Are Mortgage Borrowers Rational?]" June 24 <!-- about the irrationality of crowds -->
* MacKenzie, D.W. 2003. "[http://mises.org/daily/1337/Doubts-about-Recovery Doubts about Recovery]" October 08
 
* Mayer, Chris. 2003. "[http://mises.org/freemarket_detail.aspx?control=450&sortorder=articledate The Housing Bubble.]" The Free Market. Volume 23, Number 8 August
Duffy, Kevin. 2007A. "[http://www.lewrockwell.com/duffy/duffy10.html It’s a Mad, Mad, Mad, Mad World,]" May 22 <!-- monitors the progress of the bubble -->
* Mueller, Antony P. 2004. "[http://mises.org/daily/1627 Mr Bailout]", September 30
 
* Murphy, Robert P. 2007 "[http://blog.mises.org/7590/the-feds-role-in-the-housing-bubble/ The Fed’s Role in the Housing Bubble.]" December 28
Duffy, Kevin. 2007B. "[http://www.bearingasset.com/media/media_barrons_20070618.pdf For Whom Do the Bells Toll?]" Barron’s, June 18 <!-- bubble in the stock markets -->
* Murphy, Robert P. 2008. "[http://mises.org/daily/3203 Did the Fed, or Asian Saving, Cause the Housing Bubble?]" November 19
 
* North, Gary. 2002. "[http://www.garynorth.com/members/login.cfm?hpage=351.cfm How the FED Inflated the Real Estate Bubble by Pushing Down Mortgage Rates: Report As of 2002,]" Reality Check, March 4
Duffy, Kevin. 2007C. "[http://www.lewrockwell.com/duffy/duffy11.html Financial Markets on Crack,]" August 22 <!-- bubble bursting despite Fed interventions -->
* North, Gary. 2005. "[http://www.lewrockwell.com/north/north416.html Surreal Estate on the San Andreas Fault.]" November 25, 2005
 
* Paul, Ron. 2000. "[http://ronpaulforcongress.com/html/republic.html A Republic, If You Can Keep It]" January 31
Duffy, Kevin. 2007D. "[http://www.lewrockwell.com/duffy/duffy12.html Mr. Mozilo Goes to Washington,]" September 15 <!-- about the outlook for Countrywide -->
* Paul, Ron, 2002. [http://paul.house.gov/index.php?option=com_content&task=view&id=323&Itemid=60 "Testimony to U.S. House of Representatives"], July 16
 
* Paul, Ron, 2003. [http://paul.house.gov/index.php?option=com_content&task=view&id=258&Itemid=60 "Testimony to U.S. House Financial Services Committee"], September 10
Economics of contempt. 2008. "[http://economicsofcontempt.blogspot.com/2008/07/official-list-of-punditsexperts-who.html The Unofficial List of Pundits/Experts Who Were Wrong on the Housing Bubble.]" July 16 <!-- documents precisely what it says -->
* Polleit, Thorsten. 2006. "[http://mises.org/daily/2111 Sowing the Seeds of the Next Crisis.]" April 25
 
* Ptak, Justin. 2003. "[http://www.lewrockwell.com/orig4/ptak3.html Government Employees, Go Home!]" November 12
Englund, Eric. 2004. "[http://www.lewrockwell.com/englund/englund13.html Monetizing Envy and America’s Housing Bubble]". July 19 <!-- interventions in the housing market since 1934, mortgage defaults will rise dramatically -->
* Rockwell, Llewellyn H, Jr. 2002. "[http://mises.org/daily/929 The Marvel That Is Capitalism]" April 08
 
* Rockwell, Llewellyn H, Jr. 2008. [http://mises.org/resources/3861 The Left, the Right, and the State]. Auburn, AL: The Mises Institute, 2008
Englund, Eric. 2005A. "[http://www.lewrockwell.com/englund/englund24.html Houses Are Consumer Durables, Not Investments,]" June 8 <!-- what it says; the bubble shall burst -->
* Rogers, Jim. 2005. "[http://thehousingbubble.blogspot.com/2005/04/jim-rogers-on-housing-bubble.html Interview with Jim Rogers on the housing bubble.]" April 22
 
* Schiff, Peter. "[http://www.youtube.com/watch?v=9h2x7R8pxUs Peter Schiff predictions]" (video) Undated A.
Englund, Eric. 2005B. "[http://www.lewrockwell.com/englund/englund25.html Diminishing Property Rights Will Lead to a Higher Rate of Mortgage Defaults.]" June 28 <!-- predicts massive mortgage defaults followed by bailouts -->
* Schiff, Peter. "[http://www.youtube.com/watch?v=2I0QN-FYkpw&feature=related Peter Schiff Was Right]" (video). Undated B.
 
* Schiff, Peter. "[http://www.youtube.com/watch?v=Z0YTY5TWtmU Peter Schiff was right 2006-2007 - CNBC edition]" (video). Undated C.
Englund, Eric. 2005C. "[http://www.lewrockwell.com/englund/englund27.html When the Housing Bubble Bursts, Will President Bush Practice Mugabenomics?]" July, 19 <!-- with what must have been poetic license, predicts also that Paul Krugman will call for more "creative destruction" -->
* Schiff, Peter. "[http://www.youtube.com/watch?v=Aq1N70vym1g Peter Schiff Was Right Again ]" (video). Undated D.
 
* Schiff, Peter. 2003A. [http://www.europac.net/commentaries/fed_official_admits_emperor_has_no_clothes Commentary, March]
Englund, Eric. 2005D. "[http://www.lewrockwell.com/englund/englund30.html When Will America's Housing Bubble Burst?]" November 4 <!-- labor and material shortages, price inflation; specific timeframe for the bust! -->
* Schiff, Peter. 2003B. [http://www.europac.net/commentaries/lies_fed_chairman_tells Commentary, April]
 
* Schiff, Peter. 2003C. [http://www.europac.net/commentaries/fed_policy_indicates_belief_real_estate_bubble_too_big_burst Commentary, June]
Englund, Eric. 2006. "[http://www.lewrockwell.com/englund/englund34.html The Federal Reserve and Housing: A Cluster of Errors?]" April 22 <!-- human mistakes and what will be the consequences -->
* Schiff, Peter. 2004A. [http://www.europac.net/commentaries/arms_way_tender_trap_adjustable_rate_mortgages Commentary, May]
 
* Schiff, Peter. 2004B. [http://www.europac.net/commentaries/ny_fed_sees_no_evidence_housing_bubble_are_they_blind Commentary, June]
Englund, Eric. 2007. "[http://www.lewrockwell.com/englund/englund41.html From Prime to Subprime, America's Home-Mortgage Meltdown Has Just Begun.]" September 24 <!-- financial situation of the lenders -->
* Schiff, Peter. 2005A. [http://www.europac.net/commentaries/still_not_convinced_theres_real_estate_bubble_read Commentary, April]
 
* Schiff, Peter. 2005B. [http://www.europac.net/commentaries/housing_speculation_more_rampant_you_think Commentary, July]
Englund, Eric. 2008. "[http://www.lewrockwell.com/englund/englund43.html Countrywide Financial Corporation and the Failure of Mortgage Socialism.]" January 28 <!-- the Countrywide collapse -->
* Schiff, Peter. 2005C. [http://www.europac.net/commentaries/home_equity_not_savings Commentary, August]
 
* Schiff, Peter. 2005D. [http://www.europac.net/commentaries/wall_street_wakes Commentary, October]
French, Doug. 2005. "[http://mises.org/daily/4403 Condo-mania.]" July 11 <!-- mania in Vegas; "condos are the last segment of the housing market to catch fire in a boom and the first to crater in a bust." -->
* Schiff, Peter. 2006A. [http://www.europac.net/media/tv_interviews/peter_schiff_january_10_2006_cnbc_morning_call&type=wmv Appearance on CNBC, January] (video)
 
* Schiff, Peter. 2006B. [http://www.europac.net/media/lectures_amp_debates/february_2006_peter_schiff_us_bubble_economy Speech to the Money Show Conference, February] (video)
Grant, James. 2001. "[http://www.nytimes.com/2001/09/09/opinion/09GRAN.html?ex=1001147153&ei=1&en=898b/8611aaca6946 Sometimes the Economy Needs a Setback.]" New York Times. September 9 <!-- basically sums up the dot-com bubble - any particular prediction here? -->
* Schiff, Peter. 2006C. [http://www.europac.net/media/lectures_amp_debates/november_2006_mortgage_bankers_association_speech Speech to the Western Regional Mortgage Bankers Conference in Las Vegas] November (video, [http://www.csaba.se/2009/09/26/peter-schiff-mortgage-bankers-speech-2006-complete-transcript/ transcript])
 
* Schiff, Peter. 2007A. [http://books.google.com/books?id=gUbvPPD9QkUC&printsec=frontcover&source=gbs_atb#v=onepage&q&f=false Crash Proof: How to Profit From the Coming Economic Collapse] (1st edition) New York, N.Y.: Wiley, February 2007
Karlsson, Stefan. 2004. "[http://mises.org/daily/1670 America's Unsustainable Boom.]" November 8 <!-- the next crisis more serious than the last one; actually, it is postponed -->
* Schiff, Peter. 2007B. [http://www.europac.net/media/tv_interviews/peter_schiff_january_12_2007_fox Appearance on Fox News – January 12] (video)
 
* Sennholz, Hans F. 2002. "[http://mises.org/daily/1089 The Fed is Culpable.]" November 11
Mayer, Chris. 2003. "[http://mises.org/freemarket_detail.aspx?control=450&sortorder=articledate The Housing Bubble.]" The Free Market. Volume 23, Number 8 August <!-- about housing bubbles bursting in general -->
* Shostak, Frank. 2003. "[http://mises.org/daily/1177 Housing Bubble: Myth or Reality?]" March 4
 
* Shostak, Frank. 2005 "[http://mises.org/daily/1882 Is There a Glut of Saving?]" August 4
Murphy, Robert P. 2007 "[http://blog.mises.org/7590/the-feds-role-in-the-housing-bubble/ The Fed’s Role in the Housing Bubble.]" December 28 <!-- nice cause-and-effect demonstration, but no prediction -->
* Thornton, Mark. 2004A. "[http://www.lewrockwell.com/thornton/thornton11.html 'Bull' Market?]" February 9.
 
* Thornton, Mark. 2004B. "[http://mises.org/daily/1533 Housing: too good to be true.]" June 4
Murphy, Robert P. 2008. "[http://mises.org/daily/3203 Did the Fed, or Asian Saving, Cause the Housing Bubble?]" November 19 <!-- summary of the housing bubble, no predictions but links to some -->
* Thornton, Mark. 2004C. "[http://www.lewrockwell.com/thornton/thornton18.html A Bull Market in Gold — Technically Speaking]", March.
 
* Thornton, Mark. 2005A. "[http://www.lewrockwell.com/thornton/thornton27.html Is the Housing Bubble Popping?]" , August.
North, Gary. 2002. "[http://www.garynorth.com/members/login.cfm?hpage=351.cfm How the FED Inflated the Real Estate Bubble by Pushing Down Mortgage Rates: Report As of 2002,]" Reality Check, March 4 <!-- unknown, access restricted by subscription -->
* Thornton, Mark. 2005B. "[http://www.lewrockwell.com/thornton/thornton29.html The Price of Gold: How High Can it Go?]", August.
 
* Thornton, Mark. 2006. "[http://mises.org/journals/scholar/Thornton13.pdf The Economics of Housing Bubbles.]", June
North, Gary. 2005. "[http://www.lewrockwell.com/north/north416.html Surreal Estate on the San Andreas Fault.]" November 25, 2005 <!-- about housing bubbles, notes the danger of ARMs -->
* Thornton, Mark. 2007A. "[http://www.lewrockwell.com/thornton/thornton33.html "We Told You So"], March.
 
* Thornton, Mark. 2007B. "[http://www.lewrockwell.com/thornton/thornton32.html Illegal Immigrants and the Housing Bubble]", March.
Paul, Ron. 2000. "[http://ronpaulforcongress.com/html/republic.html A Republic, If You Can Keep It]" January 31 <!-- "If one cares about providing the maximum and best housing for the maximum number of people, one must consider a free-market approach in association with a sound non-depreciating currency. We have been operating a public housing program directly opposite to this, and along with steady inflation and government promotion of housing since the 1960s, the housing market has been grossly distorted. We can soon expect a major downward correction in the housing industry, prompted by rising interest rates." -->
* Thornton, Mark. 2007C. "[http://blog.mises.org/6948/new-record-skyscraper-and-depression-in-the-making/ New Record Skyscraper (and depression?) in the making]", August
 
* Thornton, Mark. 2007D. "[http://www.lewrockwell.com/thornton/thornton38.html You Heard It Here First]", August
Paul, Ron, 2002. [http://paul.house.gov/index.php?option=com_content&task=view&id=323&Itemid=60 "Testimony to U.S. House of Representatives"], July 16 <!--
* Trask, H.A. Scott. 2003. "[http://mises.org/daily/1363 Reflation in American History.]" October 31
:"Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
* Wenzel, Robert. 2004. "[http://www.economicpolicyjournal.com/2008/07/government-isnt-god-fdic-sticks-banks.html Government Isn't God: FDIC Sticks Banks With Bad Loans and Sticks Borrowers With Subprime Junk.]"
 
* Woods, Thomas E. Jr. 2009. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. Washington D.C.: Regnery Publishing
:"However, despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged overinvestment in housing." -->
 
Polleit, Thorsten. 2006. "[http://mises.org/daily/2111 Sowing the Seeds of the Next Crisis.]" April 25 <!-- crises follow expansions of money supply -->
 
Ptak, Justin. 2003. "[http://www.lewrockwell.com/orig4/ptak3.html Government Employees, Go Home!]" November 12 <!-- "I am tired of an inflated mortgage market sapping funds from original development. I hope and pray we don’t see a crash." Not exactly a prediction. -->
 
Rockwell, Llewellyn H, Jr. 2008. [http://mises.org/resources/3861 The Left, the Right, and the State]. Auburn, AL: The Mises Institute, 2008 <!-- collection of articles from various dates, can't read it all; the only mention of a possible housing bubble seems to be in p.462-463 (article from April 2008) -->
 
Rogers, Jim. 2005. "[http://thehousingbubble.blogspot.com/2005/04/jim-rogers-on-housing-bubble.html Interview with Jim Rogers on the housing bubble.]" April 22 <!-- A short Q&A on some random blog, basically says Jim Rogers says there is a bubble. There should be something better out there! -->
 
Schiff, Peter. "[http://www.youtube.com/watch?v=9h2x7R8pxUs Peter Schiff predictions]" (video) Undated A. <!-- a 2009 interview about past predictions -->
 
Schiff, Peter. "[http://www.youtube.com/watch?v=2I0QN-FYkpw&feature=related Peter Schiff Was Right]" (video).
Undated B. <!-- Nov 2, 2008, a series of interviews with predictions from 2006-2007 -->
 
Schiff, Peter. "[http://www.youtube.com/watch?v=Z0YTY5TWtmU Peter Schiff was right 2006-2007 - CNBC edition]" (video). Undated C. <!-- Feb 20, 2009, a series of past interviews with predictions -->
 
Schiff, Peter. "[http://www.youtube.com/watch?v=Aq1N70vym1g Peter Schiff Was Right Again ]" (video). Undated D. <!-- Nov 25, 2008, a series of past interviews with predictions  -->
 
Schiff, Peter. 2003A. [http://www.europac.net/commentaries/fed_official_admits_emperor_has_no_clothes Commentary, March] <!-- points out serious weakness of Fannie and Freddie, "even a minor recession... would send both into bankruptcy" -->
 
Schiff, Peter. 2003B. [http://www.europac.net/commentaries/lies_fed_chairman_tells Commentary, April] <!-- simply mentions the housing bubble -->
 
Schiff, Peter. 2003C. [http://www.europac.net/commentaries/fed_policy_indicates_belief_real_estate_bubble_too_big_burst Commentary, June] <!-- talks more about the other possible end of a housing bubble - a hyperinflation -->
 
Schiff, Peter. 2004A. [http://www.europac.net/commentaries/arms_way_tender_trap_adjustable_rate_mortgages Commentary, May] <!-- ARMs, speculation, houses that can't be sold, coming bailouts -->
 
Schiff, Peter. 2004B. [http://www.europac.net/commentaries/ny_fed_sees_no_evidence_housing_bubble_are_they_blind Commentary, June] <!-- bubble example, what will happen to a typical investor when interest rates rise -->
 
Schiff, Peter. 2005A. [http://www.europac.net/commentaries/still_not_convinced_theres_real_estate_bubble_read Commentary, April] <!-- 'irrational exuberance' of the markets -->
 
Schiff, Peter. 2005B. [http://www.europac.net/commentaries/housing_speculation_more_rampant_you_think Commentary, July] <!-- the purely speculative nature of many real estate purchases and mortgages, anyone can join, gambling without risk should the prices fall, "...when the trend turns, prices will drop precipitously. Far from holding on to their homes, as even most housing bears suggest, owner/speculators will sell in droves, or worse, simply walk away from their bets, leaving lenders and tax payers to cover their losses." -->
 
Schiff, Peter. 2005C. [http://www.europac.net/commentaries/home_equity_not_savings Commentary, August] <!-- equity is not savings but credit from somebody else; this source of investment can easily evaporate once others withdraw their credit -->
 
Schiff, Peter. 2005D. [http://www.europac.net/commentaries/wall_street_wakes Commentary, October] <!-- a burst of the bubble imminent? -->
 
Schiff, Peter. 2006A. [http://www.europac.net/media/tv_interviews/peter_schiff_january_10_2006_cnbc_morning_call&type=wmv Appearance on CNBC, January] (video) <!-- about the fall of the value of the dollar -->
 
Schiff, Peter. 2006B. [http://www.europac.net/media/lectures_amp_debates/february_2006_peter_schiff_us_bubble_economy Speech to the Money Show Conference, February] (video) <!-- long video, to be checked later -->
 
Schiff, Peter. 2006C. [http://www.europac.net/media/lectures_amp_debates/november_2006_mortgage_bankers_association_speech Speech to the Western Regional Mortgage Bankers Conference in Las Vegas] November (video, [http://www.csaba.se/2009/09/26/peter-schiff-mortgage-bankers-speech-2006-complete-transcript/ transcript]) <!-- long video, to be checked later -->
 
Schiff, Peter. 2007A. [http://books.google.com/books?id=gUbvPPD9QkUC&printsec=frontcover&source=gbs_atb#v=onepage&q&f=false Crash Proof: How to Profit From the Coming Economic Collapse] (1st edition) New York, N.Y.: Wiley, February 2007 <!-- book, to be checked later -->
 
Schiff, Peter. 2007B. [http://www.europac.net/media/tv_interviews/peter_schiff_january_12_2007_fox Appearance on Fox News – January 12] (video) <!-- sparring about whether there is a bubble or not -->
 
Sennholz, Hans F. 2002. "[http://mises.org/daily/1089 The Fed is Culpable.]" November 11 <!-- if a limit is put on stock market speculation: "The credits created by the Fed and the bank credits resting on the Fed funds undoubtedly would have found other uses and created other investment bubbles, such as in real estate, precious metals, or objects of art and collection." -->
 
Shostak, Frank. 2003. "[http://mises.org/daily/1177 Housing Bubble: Myth or Reality?]" March 4 <!-- shows the reality of the housing bubble; basically says it could burst anytime -->
 
Shostak, Frank. 2005 "[http://mises.org/daily/1882 Is There a Glut of Saving?]" August 4 <!-- a glut of saving didn't cause the bubble, the Fed did - no predictions -->
 
Thornton, Mark. 2004A. "[http://www.lewrockwell.com/thornton/thornton11.html 'Bull' Market?]" February 9. <!-- basic analysis of a large housing bubble -->
 
Thornton, Mark. 2004B. "[http://mises.org/daily/1533 Housing: too good to be true.]" June 4 <!-- "It has now been three years since the U.S. stock market crash. Greenspan has indicated that interest rates could soon reverse their course, while longer-term interest rates have already moved higher. Higher interest rates should trigger a reversal in the housing market and expose the fallacies of the new paradigm, including how the housing boom has helped cover up increases in price inflation. Unfortunately, this exposure will hurt homeowners and the larger problem could hit the American taxpayer, who could be forced to bailout the banks and government-sponsored mortgage guarantors who have encouraged irresponsible lending practices." -->
 
Thornton, Mark. 2005. "[http://www.lewrockwell.com/thornton/thornton27.html Is the Housing Bubble Popping?]" , August <!-- "the housing bubble might be coming to an end" -->
 
Thornton, Mark. 2006. "[http://mises.org/journals/scholar/Thornton13.pdf The Economics of Housing Bubbles.]", June  <!-- America’s Housing Crisis: A Case of Government Failure, Benjamin Powell and Randall Holcombe, eds., Transaction Publishers - an extensive history of the housing bubble; predictions p. 27, 29, 31: construction industry, unemployment, foreclosures, bankruptcies, bailouts of banks and GSEs, a long recession -->
 
Trask, H.A. Scott. 2003. "[http://mises.org/daily/1363 Reflation in American History.]" October 31 <!-- analyzes some bubbles in history and remarks the next one should be similar -->
 
Wenzel, Robert. 2004. "[http://www.economicpolicyjournal.com/2008/07/government-isnt-god-fdic-sticks-banks.html Government Isn't God: FDIC Sticks Banks With Bad Loans and Sticks Borrowers With Subprime Junk.]" <!-- (2008 article refers to another [http://web.archive.org/web/20040816043836/www.economicbriefing.com/sabat/fedbubble.html archived] 2004 article) predicts people walking away from their houses; "when this growth in money supply begins to slow in earnest to under 5%, as the Fed slowly begins to raise rates, that you will see the real estate bubble begin to burst and then cascade downward." -->
 
Woods, Thomas E. Jr. 2009. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. Washington D.C.: Regnery Publishing <!-- reported to contain some examples of predictions --><ref name="Block_Thymologists" />


==Other predictions==
==Other predictions==
Line 214: Line 173:


==Links==
==Links==
* [http://economicsofcontempt.blogspot.com/2008/07/official-list-of-punditsexperts-who.html The Unofficial List of Pundits/Experts Who Were Wrong on the Housing Bubble] by Posted by Economics of Contempt, July 2008
* [http://economicsofcontempt.blogspot.com/2008/07/official-list-of-punditsexperts-who.html The Unofficial List of Pundits/Experts Who Were Wrong on the Housing Bubble] by "Economics of Contempt", July 2008
* [http://www.youtube.com/watch?v=6XbG6aIUlog Keynesian Predictions vs. American History | Thomas E. Woods, Jr.] (video), January 2010 <!-- mention of Benjamin Anderson's prediction; from 17:30 wrong predictions of Soviet Union's success; the "end of recessions" as a signal of trouble; stagflation; Krugman; but few mentions of successful predictions -->
* [http://www.youtube.com/watch?v=6XbG6aIUlog Keynesian Predictions vs. American History | Thomas E. Woods, Jr.] (video), January 2010 <!-- mention of Benjamin Anderson's prediction; from 17:30 wrong predictions of Soviet Union's success; the "end of recessions" as a signal of trouble; stagflation; Krugman; but few mentions of successful predictions -->
* [http://mises.org/daily/4177 The Federal Reserve as a Confidence Game: What They Were Saying in 2007] by Mark Thornton, March 2010
* [http://www.youtube.com/watch?v=HegiGuJlzTQ The Austrian School on Business Cycles: 100 Years of Being Right] (video) by Mark Thornton, March 2010


[[Category:Austrian School of Economics]]
[[Category:Austrian School of Economics]]
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Latest revision as of 18:12, 12 May 2013

This page attempts to list various predictions made by Austrian economists about important economic and other developments.

Important note: Austrian economists, as Austrian economists, or praxeologists, do not predict. They can predict not as formal economists, or praxeologists, but, rather, in their role as thymologists, or economic historians. In praxeology, A causes B, other things remaining the same. But, in the real world, other things cannot be relied upon to always remain constant. Therefore, predictions of the "A will necessarily lead to B" type are strictly prohibited. Instead, praxeologists, but not thymologists, must limit themselves to statements of the if-A then-B variety.

With this in mind, it is interesting that Austrian economists have been quite successful at predicting major events.[1]

The Great Depression

The Great Depression was predicted by several Austrian economists:

  • In Austria, economist Ludwig von Mises saw the problem developing in its early stages and predicted to his colleagues in 1924 that the large Austrian bank, Creditanstalt, would eventually crash. He wrote a full analysis of Irving Fisher’s monetary views, published in 1928, where he targeted Fisher’s reliance on price indexes as a key vulnerability that would bring about the Great Depression, concluding: "because of the imperfection of the index number, these calculations would necessarily lead in time to errors of very considerable proportions."[2]
  • F. A. Hayek published several articles in early 1929 in which he predicted the collapse of the American boom.[citation needed] Felix Somary, who like Mises was a student at the University of Vienna, issued several dire warnings in the late 1920s.[citation needed][3]
  • In America economists Benjamin Anderson and E.C. Harwood also warned that the Federal Reserve policies would cause a crisis, and like Somary, they were largely ignored.[3] Albert H. Wiggin summed up in 1931 that the "depression has been prolonged and not alleviated by delay in making necessary readjustments."[4]

Post-WWII recovery

In the 1945 symposium Financing American Prosperity, several prominent economists discussed the financial and other economic problems of the transition after World War II and suggested solutions. With the exception of Benjamin Anderson, who called for "drastic economies in the postwar period" and insisted that "proposals for expanding federal expenditures after the war must be fought all along the line", the contributors all advocated a scope of federal expenditures much larger than that before the war.[5]

The "Depression of 1946" may be one of the most widely predicted events that never happened in American history. As the war was winding down, leading Keynesian economists of the day argued, as Alvin Hansen did, that "the government cannot just disband the Army, close down munitions factories, stop building ships, and remove all economic controls." After all, the belief was that the only thing that finally ended the Great Depression of the 1930s was the dramatic increase in government involvement in the economy. However, the government canceled war contracts, and its spending fell from $84 billion in 1945 to under $30 billion in 1946. By 1947, the government was paying back its massive wartime debts by running a budget surplus of close to 6 percent of GDP. The military released around 10 million Americans back into civilian life. Most economic controls were lifted, and all were gone less than a year after V-J Day. In short, the economy underwent what the historian Jack Stokes Ballard referred to as the "shock of peace."

If the wartime government stimulus had ended the Great Depression, its winding down would certainly lead to its return. At least that was the consensus of almost every economic forecaster, government and private. In August 1945, the Office of War Mobilization and Reconversion forecast that 8 million would be unemployed by the spring of 1946, which would have amounted to a 12 percent unemployment rate. In September 1945, Business Week predicted unemployment would peak at 9 million, or around 14 percent. Leo Cherne of the Research Institute of America and Boris Shishkin, an economist for the American Federation of Labor, forecast 19 and 20 million unemployed respectively — rates that would have been in excess of 35 percent!

After the Second World War, unemployment rates, artificially low because of wartime conscription, rose a bit, but remained under 4.5 percent in the first three postwar years — below the long-run average rate of unemployment during the 20th century. Some workers voluntarily withdrew from the labor force, choosing to go to school or return to prewar duties as housewives. But, many who lost government-supported jobs in the military or in munitions plants found employment as civilian industries expanded production—in fact civilian employment grew, on net, by over 4 million between 1945 and 1947. Household consumption, business investment, and net exports all boomed as government spending receded.[6]

End of the Bretton Woods system

The collapse of the Bretton Woods System and the following rise of the gold price has been predicted by several Austrian economists and is covered in the following:

Savings and loan crisis

In his 1982 introduction to America's Great Depression, Murray Rothbard predicted the Savings and loan crisis and hinted at trouble in the stock market:

"... The fact that Reaganomics cannot bring down interest rates for long puts a permanent brake on the stock market, which has been in chronic trouble since the mid-1960s and is increasingly in shaky shape. The bond market is already on the way to collapse. The housing market has at last been stopped short by the high mortgage rates, and the same has happened to many collectibles. Unemployment is chronically higher each decade, and is now at the highest since the Great Depression, with no sign of improvement. The accelerating inflationary boom of the three decades since the end of World War II has loaded the economy with unsound investments and with an oppressive mountain of debt: consumer, homeowner, business, and international. In recent decades, business has in effect relied on inflation to liquidate the debt, but if "disinflation" (the lessening of inflation in 1981 and at least the first half of 1982) is to continue, what will happen to the debt? Increasingly, the answer will be bankruptcies, and deeper depression. The bankruptcy rate is already the highest since the Great Depression of the 1930s. Thrift institutions caught between high interest rates to their depositors and low rates earned on long-time mortgages, will increasingly become bankrupt or be forced into quasi-bankrupt mergers with other thrifts which will be dragged down by the new burdens. Even commercial banks, protected by the safety blanket of the FDIC for half a century, are now beginning to go down the drain, dragged down by their unsound loans of the past decade."

Dot-com bubble

Main article: Austrian predictions/Dot-com bubble

The Dot-com bubble and its bust was foreseen by several Austrian economists.[7] In October, 1999, Sean Corrigan pointed out a massive bubble and implied it will burst. He compared the conditions to those during the late summer of 1987, the Japanese bubble of the late 1980s, and the "roaring Twenties" in the United States. [8] In March, 2000, Christopher Mayer noted that all the ingredients of a bubble - fundamental (i.e., a technological revolution), financial (i.e., a surge in money and credit) and psychological (i.e., a suspension of belief in traditional valuation measures) - appear to exist in the current bull market and predicted it will end with a bust.[9] In August, 2000, William Anderson pointed to the bubble in the high-technology sector, mentioned the negative consequences of a regulatory attack at Microsoft[10] (which was analyzed a year earlier by Thomas DiLorenzo[11]). There were others.

Reference shortlist:
Anderson, 2000; Corrigan, 1999; Deden, 1999; DiLorenzo, 1999; Grant, 1996A, 1996B; Hülsmann, 2000; Mayer, 2000; Paul, 2000; Reisman, 1999; Sennholz, 2000; Shostak, 1999; Thornton, 2000.

Housing bubble

Main article: Austrian predictions/Housing bubble

During and after the burst of the Dot-com bubble, numerous economists predicted the 2000s housing bubble that culminated in the Great Recession from 2008 onward.

In 2002, Robert Blumen summed up the effect of the activities of Fannie and Freddie on the housing market as shows the systemic risk and foresaw a coming bailout.[12] Sean Corrigan pointed to the blooming real estate business among all the bankruptcies, and noted that real estate bubbles tend to pop several years after stock market bubbles, and that mortgages may fare much worse compared to stocks... along with their owners.[13] Congressman Ron Paul criticized government involvement in housing, and said that like all artificially created bubbles, the boom in housing prices cannot last forever.[14]

In 2004, Mark Thornton wrote that higher interest rates (indicated by the Fed) "should trigger a reversal in the housing market and expose the fallacies of the new paradigm, including how the housing boom has helped cover up increases in price inflation. Unfortunately, this exposure will hurt homeowners and the larger problem could hit the American taxpayer, who could be forced to bailout the banks and government-sponsored mortgage guarantors who have encouraged irresponsible lending practices."[15] Later on, he spelled out the consequences for the construction industry, unemployment, foreclosures, bankruptcies, bailouts of banks and GSEs, and a long recession.[16]

Stefan Karlsson wrote that the next crisis will be more serious than the mild recession of 2001 one; as it is, in fact, that very same crisis, only postponed.[17]

In 2005, Doug French after observing the mania in Vegas, quipped "condos are the last segment of the housing market to catch fire in a boom and the first to crater in a bust.", and concluded that the bust must be close.[18] Gary North warned against the danger of ARMs (adjustable rate mortgages).[19]

Investor Peter Schiff acquired fame in a series of TV appearances (most in 2006 and 2007), where he opposed a multitude of financial experts and claimed that a bust was to come.[20] He was warning about the speculation, ARMs, houses that couldn't be sold, people walking away from them and coming bailouts for several years before in print.[21][22][23]

Reference shortlist:
Anderson, 2001, 2003, 2007; Armentano, 2004; Beale, 2009; Blumen, 2002, 2004, 2005; Corrigan, 2002; Crovelli, 2006; DeCoster, 2003; Duffy, 2005A, 2005B, 2005C, 2005D, 2006, 2007A, 2007B, 2007C, 2007D; Economics of contempt, 2008; Englund, 2004, 2005A, 2005B, 2005C, 2005D, 2006, 2007, 2008; French, 2005; Grant, 2001; Karlsson, 2004; MacKenzie, 2003; Mayer, 2003; Mueller, 2004; Murphy, 2007, 2008; North, 2002, 2005; Paul, 2000, 2002, 2003; Polleit, 2006; Ptak, 2003; Rockwell, 2002, 2008; Rogers, 2005; Schiff, Undated A, Undated B, Undated C, Undated D, 2003A, 2003B, 2003C, 2004A, 2004B, 2005A, 2005B, 2005C, 2005D, 2006A, 2006B, 2006C, 2007A, 2007B; Sennholz, 2002; Shostak, 2003, 2005; Thornton, 2004A, 2004B, 2005A, 2005B, 2005C, 2006, 2007A, 2007B, 2007C, 2007D; Trask, 2003; Wenzel, 2004; See also Woods (2009, p. 188 for further bibliography).

Other predictions

  • The Skyscraper index shows a correlation between the construction of the world's tallest buildings and impending financial crises. While not developed by Austrian economists, it is compatible with their views about the business cycle.[24]

References

  1. ↑ Walter Block. Austrian Thymologists Who Predicted the Housing Bubble, LRC.com, December 22, 2010. Referenced 2011-11-29.
  2. ↑ Ludwig von Mises. "The Causes of the Economic Crisis, and Other Essays Before and After the Great Depression", collection of works reposted from 1923 and 1928. Referenced 2011-01-12.
  3. ↑ 3.0 3.1 Mark Thornton. "Mises vs. Fisher on Money, Method, and Prediction: The Case of the Great Depression" (pdf), p.13-15; December 2006. Referenced 2011-12-13.
  4. ↑ Murray N. Rothbard. America's Great Depression, Chapter 9, referenced 2011-01-11.
  5. ↑ Contributors: Benjamin M. Anderson, John Maurice Clark, Howard S. Ellis, Alvin H. Hansen, Sumner H. Slichter and John H. Williams. Editors: Paul T. Homan, Fritz Machlup. Financing American Prosperity, A Symposium of Economists. The Twentieth Century Fund, first published October 1945. Referenced 2012-05-04.
  6. ↑ Jason E. Taylor and Richard K. Vedder. "Stimulus by Spending Cuts: Lessons from 1946" (pdf), Cato Policy Report, May/June 2010, Vol. XXXII No.3, referenced 2012-05-04.
  7. ↑ Mark Thornton. "Who Predicted the Bubble? Who Predicted the Crash?" (pdf), The Independent Review, v. IX, n. 1, Summer 2004, ISSN 1086-1653, Copyright © 2004, pp. 5–30. Referenced 2011-12-13.
  8. ↑ Sean Corrigan. "Will the Bubble Pop?", Mises Daily, October 18, 1999. Referenced 2012-01-08.
  9. ↑ Christopher Mayer. "The Meaning of 'Over-Valued'", Mises Daily, March 30, 2000. Referenced 2011-12-13.
  10. ↑ William L. Anderson. "New Economy, Old Delusion", The Free market, August 2000, Volume 18, Number 8. Referenced 2012-01-08.
  11. ↑ DiLorenzo, Thomas J. "Regulatory Sneak Attack.", Mises Daily, September 16, 1999. Referenced 2012-01-08.
  12. ↑ Blumen, Robert. "Fannie Mae Distorts Markets", Mises Daily, June 17, 2002. Referenced 2011-01-10.
  13. ↑ Corrigan, Sean. "The Trouble with Debt", Mises Daily, July 01, 2002. Referenced 2011-01-10.
  14. ↑ Paul, Ron. "Testimony to U.S. House of Representatives", July 16, 2002. Referenced 2011-01-10.
  15. ↑ Thornton, Mark. "Housing: too good to be true." June 4, 2004. Referenced 2011-01-10.
  16. ↑ Thornton, Mark. "The Economics of Housing Bubbles", June 2006, p. 27, 29, 31. Referenced 2011-01-10.
  17. ↑ Karlsson, Stefan. "America's Unsustainable Boom", Mises Daily, November 8, 2004. Referenced 2011-01-10.
  18. ↑ French, Doug. "Condo-mania.", Mises Daily, July 11, 2005. Referenced 2011-01-10.
  19. ↑ North, Gary. "Surreal Estate on the San Andreas Fault.", November 25, 2005. Referenced 2011-01-10.
  20. ↑ Schiff, Peter. "Peter Schiff Was Right" (video). Referenced 2011-01-10.
  21. ↑ Schiff, Peter. "Fed official admits the emperor has no clothes!", Commentary, March 10, 2003. Referenced 2011-01-10.
  22. ↑ Schiff, Peter. "In Arm's Way: The Tender Trap of Adjustable Rate Mortgages.", Commentary, May 7, 2004. Referenced 2011-01-10.
  23. ↑ Schiff, Peter. "Housing Speculation is More Rampant Than You Think.", Commentary, July 5, 2005. Referenced 2011-01-10.
  24. ↑ Mark Thornton. "Skyscrapers and Business Cycles", Mises Daily, August 23, 2008. Originally appeared in the Quarterly Journal of Austrian Economics vol. 8, no. 1 (Spring 2005) - PDF. There is also an MP3 audio file read by the author. Referenced 2011-12-13.

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