– Former Goldman Sachs employee and ECB President Mario Draghi, 4 December 2015.
“You have what degree of confidence in your ability to control this [inflation] ?”
“100%.”
– Ben Bernanke being interviewed on ’60 Minutes’, 5 December 2010.
“Do not arouse the wrath of the great and powerful Oz ! ..Pay no attention to that man behind the curtain.”
– The Wizard of Oz.
In economics, the fancy-sounding ‘general equilibrium theory’ holds that in a complex economy, a set of prices exists that will result in an overall (general) equilibrium. This theory was brought to you in large part by the economist and idiot Léon Walras, whose principles only exist in the first place because he stole them from the world of physics.
But ‘general equilibrium theory’ is not the only economic theory addressing order, or the lack of it, in markets. George Soros advocates an alternative which he terms ‘reflexivity’:
“..financial markets can create inaccurate expectations and then change reality to accord with them. This is the opposite of the process described in textbooks and built into economic models, which always assume that financial expectations adapt to reality, not the other way round.”
Walras spent his last years lonely, bitter and afflicted by dementia. George Soros is a billionaire. Draw your own conclusions as to which of these theories is more likely to be correct.
…click on the above link to read the rest of the article…
