Austrian predictions: Difference between revisions
Pestergaines (talk | contribs) Polished, sorted, sorted out short references. |
Pestergaines (talk | contribs) Bretton Woods. |
||
| Line 8: | Line 8: | ||
* 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, [[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]) --> | ||
* [[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, and 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> | * [[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, and 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> | ||
==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: | |||
* Rothbard, Murray. 1962. [[The Case for a 100 Percent Gold Dollar]] <!-- | |||
Could use more examples of the who and where predicted what. | |||
The minority of gold standard advocates during the 1960s were almost all friends and followers of the great Austrian school economist Ludwig von Mises. Mises himself, and such men as Henry Hazlitt, DeGaulle’s major economic adviser Jacques Rueff, and Michael Angelo Heilperin, pointed out that, as the dollar continued to inflate, it had become absurdly undervalued at $35 an ounce. Gold was worth a great deal more in terms of dollars and other currencies, and the United States, declared the Misesians, should return to a genuine gold standard at a realistic, much higher rate. These Austrian economists were ridiculed by all other schools of economists and financial writers for even mentioning that gold might even be worth the absurdly high price of $70 an ounce. The Misesians predicted that the Bretton Woods system would collapse, since relatively hard money countries, recognizing the continuing depreciation of the dollar, would begin to break the informal gentleman’s rules of Bretton Woods and insistently demand redemption in gold that the United States did not possess. | |||
There can be no genuine laboratory experiments in human affairs, but we came as close as we ever will in 1968, and still more definitively in 1971. Here were two firm and opposing sets of predictions: the Misesians, who stated that if the dollar and gold were cut loose, the price of gold in ever-more inflated dollars would zoom upward; and the massed economic Establishment, from Friedman to Samuelson, and even including such ex-Misesians as Fritz Machlup, maintaining that the price of gold would, if cut free, plummet from $35 to $6 an ounce. | |||
Flouting all the predictions of the economic Establishment, there was no contest as between themselves and the Misesians: not once did the price of gold on the free market fall below $35. Indeed it kept rising steadily, and after 1971 it vaulted upward, far beyond the once seemingly absurdly high price of $70 an ounce. --> | |||
==Dot-com bubble== | ==Dot-com bubble== | ||
Revision as of 14:42, 14 December 2011
This page attempts to list various predictions made by Austrian economists about important economic and other developments. UNDER CONSTRUCTION.
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.[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, Credit Anstalt, 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."
- 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, and 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.[2]
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:
- Rothbard, Murray. 1962. The Case for a 100 Percent Gold Dollar
Dot-com bubble
The Dot-com bubble and its bust was widely foreseen despite the hype:[3]
Anderson, 2000; Corrigan, 1999; Deden, 1999; Grant, 1996A, 1996B; Hülsmann, 2000; Mayer, 2000; Reisman, 1999; Sennholz, 2000; Shostak, 1999; Thornton, 2000.
- Anderson, William. 2000. "New Economy, Old Delusion." The Free Market, August
- Corrigan, Sean. 1999. "Will the Bubble Pop?", October 18
- Deden, Anthony. 1999. "Reflections On Prosperity" December 29
- Grant, James. 1996A. The Trouble with Prosperity, May
- Grant, James. 1996B The Trouble with Prosperity, Winter 1996, Interview
- Hülsmann, Jörg G. 2000. Schöne neue Zeichengeldwelt
- Mayer, Christopher. 2000. "The Meaning of 'Over-Valued'", March 30.
- Reisman, George. 1999. "When Will the Bubble Burst?", August 18
- Sennholz, Hans. 2000. "Can the Boom Last?", July 31
- Shostak, Frank. 1999. "Inflation, Deflation, and the Future". October 7
- Thornton, Mark. 2000. "Who Predicted the Bubble? Who Predicted the Crash?" (pdf), The Independent Review, Summer 2004
Housing bubble
During and after the burst of the Dot-com bubble, these economists predicted the 2000s housing bubble that culminated in the Great Recession from 2008 onward.
Anderson, 2001, 2003, 2007; Armentano, 2004; Beale, 2009; Blumen, 2002, 2004, 2005; Corrigan, 2002; Crovelli, 2006; DeCoster, 2003; DiLorenzo, 1999; 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).
Anderson, William L. 2001. "The Party is Over," February 20
Anderson, William L. 2003. "Recovery or Boomlet?" July 07
Anderson, William L. 2007. "The Party is Over – Again," August 30
Armentano, Dominick. 2004. "Memo to Federal Reserve: Increase Interest Rates Now!"
Beale, Theodore. 2009. "The Return of the Great Depression"
Blumen, Robert. 2002. "Fannie Mae Distorts Markets." Mises Daily, June 17
Blumen, Robert. 2004. "All Real Estate, All the Time". March 8
Blumen, Robert. 2005. "Housing Bubble: Are We There Yet?" May 8
Corrigan, Sean. 2002. "The Trouble with Debt". July 01
Crovelli, Mark R. 2006. "Gold, Inflation, And... Austria?" May 31
De Coster, Karen. 2003. "The House that Greenspan Built: Irrationally Exuberant Wall Street Welfare Parasites and Their Fed-God." September 12
DiLorenzo, Thomas J. 1999. "Regulatory Sneak Attack." September 16
Duffy, Kevin. 2005A "The Super Bowl Indicator," February 5
Duffy, Kevin. 2005B. "Honey, I Shrunk the Net Worth," March 3
Duffy, Kevin. 2005C. "Alan, We Have a Problem," August 2
Duffy, Kevin. 2005D. "Panic Now and Beat the Rush," September 24
Duffy, Kevin. 2006. "Are Mortgage Borrowers Rational?" June 24
Duffy, Kevin. 2007A. "It’s a Mad, Mad, Mad, Mad World," May 22
Duffy, Kevin. 2007B. "For Whom Do the Bells Toll?" Barron’s, June 18
Duffy, Kevin. 2007C. "Financial Markets on Crack," August 22
Duffy, Kevin. 2007D. "Mr. Mozilo Goes to Washington," September 15
Economics of contempt. 2008. "The Unofficial List of Pundits/Experts Who Were Wrong on the Housing Bubble." July 16
Englund, Eric. 2004. "Monetizing Envy and America’s Housing Bubble". July 19
Englund, Eric. 2005A. "Houses Are Consumer Durables, Not Investments," June 8
Englund, Eric. 2005B. "Diminishing Property Rights Will Lead to a Higher Rate of Mortgage Defaults." June 28
Englund, Eric. 2005C. "When the Housing Bubble Bursts, Will President Bush Practice Mugabenomics?" July, 19
Englund, Eric. 2005D. "When Will America's Housing Bubble Burst?" November 4
Englund, Eric. 2006. "The Federal Reserve and Housing: A Cluster of Errors?" April 22
Englund, Eric. 2007. "From Prime to Subprime, America's Home-Mortgage Meltdown Has Just Begun." September 24
Englund, Eric. 2008. "Countrywide Financial Corporation and the Failure of Mortgage Socialism." January 28
French, Doug. 2005. "Condo-mania." July 11
Grant, James. 2001. "Sometimes the Economy Needs a Setback." New York Times. September 9
Karlsson, Stefan. 2004. "America's Unsustainable Boom." November 8
Mayer, Chris. 2003. "The Housing Bubble." The Free Market. Volume 23, Number 8 August
Murphy, Robert P. 2007 "The Fed’s Role in the Housing Bubble." December 28
Murphy, Robert P. 2008. "Did the Fed, or Asian Saving, Cause the Housing Bubble?" November 19
North, Gary. 2002. "How the FED Inflated the Real Estate Bubble by Pushing Down Mortgage Rates: Report As of 2002," Reality Check, March 4
North, Gary. 2005. "Surreal Estate on the San Andreas Fault." November 25, 2005
Paul, Ron. 2000. "A Republic, If You Can Keep It" January 31
Paul, Ron, 2002. "Testimony to U.S. House of Representatives", July 16
Polleit, Thorsten. 2006. "Sowing the Seeds of the Next Crisis." April 25
Ptak, Justin. 2003. "Government Employees, Go Home!" November 12
Rockwell, Llewellyn H, Jr. 2008. The Left, the Right, and the State. Auburn, AL: The Mises Institute, 2008
Rogers, Jim. 2005. "Interview with Jim Rogers on the housing bubble." April 22
Schiff, Peter. "Peter Schiff predictions" (video) Undated A.
Schiff, Peter. "Peter Schiff Was Right" (video). Undated B.
Schiff, Peter. "Peter Schiff was right 2006-2007 - CNBC edition" (video). Undated C.
Schiff, Peter. "Peter Schiff Was Right Again " (video). Undated D.
Schiff, Peter. 2003A. Commentary, March
Schiff, Peter. 2003B. Commentary, April
Schiff, Peter. 2003C. Commentary, June
Schiff, Peter. 2004A. Commentary, May
Schiff, Peter. 2004B. Commentary, June
Schiff, Peter. 2005A. Commentary, April
Schiff, Peter. 2005B. Commentary, July
Schiff, Peter. 2005C. Commentary, August
Schiff, Peter. 2005D. Commentary, October
Schiff, Peter. 2006A. Appearance on CNBC, January (video)
Schiff, Peter. 2006B. Speech to the Money Show Conference, February (video)
Schiff, Peter. 2006C. Speech to the Western Regional Mortgage Bankers Conference in Las Vegas November (video, transcript)
Schiff, Peter. 2007A. Crash Proof: How to Profit From the Coming Economic Collapse (1st edition) New York, N.Y.: Wiley, February 2007
Schiff, Peter. 2007B. Appearance on Fox News – January 12 (video)
Sennholz, Hans F. 2002. "The Fed is Culpable." November 11
Shostak, Frank. 2003. "Housing Bubble: Myth or Reality?" March 4
Shostak, Frank. 2005 "Is There a Glut of Saving?" August 4
Thornton, Mark. 2004A. "'Bull' Market?" February 9.
Thornton, Mark. 2004B. "Housing: too good to be true." June 4
Thornton, Mark. 2005. "Is the Housing Bubble Popping?" , August
Thornton, Mark. 2006. "The Economics of Housing Bubbles.", June
Trask, H.A. Scott. 2003. "Reflation in American History." October 31
Wenzel, Robert. 2004. "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 [1]
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.[4]
References
- ↑ 1.0 1.1 Walter Block. Austrian Thymologists Who Predicted the Housing Bubble, LRC.com, December 22, 2010. Referenced 2011-11-29.
- ↑ 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.
- ↑ 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.
- ↑ 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.
Links
- The Unofficial List of Pundits/Experts Who Were Wrong on the Housing Bubble by Posted by Economics of Contempt, July 2008