{"id":42093,"date":"2018-12-30T09:14:48","date_gmt":"2018-12-30T14:14:48","guid":{"rendered":"https:\/\/olduvai.ca\/?p=42093"},"modified":"2018-12-30T09:14:48","modified_gmt":"2018-12-30T14:14:48","slug":"the-depression-of-2019-2021","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=42093","title":{"rendered":"The Depression of 2019-2021?"},"content":{"rendered":"

The Depression of 2019-2021?<\/a><\/h3>\n

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The profound question which transcends all this day-to-day market drama over the holidays is the nature of the economic slowdown now occurring globally. This slowdown can be seen both inside and outside the US. In reviewing the laboratory of history \u2014 especially those experiments featuring severe asset inflation, unaccompanied by high official estimates of consumer price inflation \u2014 three possible \u201cechoes\u201d deserve attention in coming weeks and months. (History echoes rather than repeats!)<\/p>\n

Will We Learn from History \u2014 And What Will Soon Be History?<\/strong><\/p>\n

The behavioral finance theorists tell us that which echo sounds and which outcome occurs is more obvious in hindsight than to anyone in real time. As Daniel Kahneman writes (in Thinking Fast and Slow<\/em>):<\/p>\n

The core of hindsight bias is that we believe we understand the past, which implies the future should also be knowable; but in fact we understand the past less than we believe we do \u2013 compelling narratives foster an illusion of inevitability; but no such story can include the myriad of events that would have caused a different outcome .<\/p><\/blockquote>\n

Whichever historical echo turns out to be loudest as the Great Monetary Inflation of 2011-18 enters its late dangerous phase.\u00a0 Whether we’re looking at 1927-9, 1930-3, or 1937-8, the story will seem obvious in retrospect, at least according to skilled narrators. There may be competing narratives about these events \u2014 even decades into the future, just as there still are today about each of the above mentioned episodes. Even today, the Austrian School, the Keynesians, and the monetarists, all tell very different historical narratives and the weight of evidence has not knocked out any of these competitors in the popular imagination.<\/p>\n

The Stories We Tell Ourselves Are Important<\/h4>\n

And while on the subject of behavioral finance\u2019s perspectives on potential historical echoes and actual market outcomes, we should consider Robert Shiller\u2019s insights into story-telling (in \u201cIrrational Exuberance\u201d):<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Depression of 2019-2021? The profound question which transcends all this day-to-day market drama over the holidays is the nature of the economic slowdown now occurring globally. This slowdown can be seen both inside and outside the US. In reviewing the laboratory of history \u2014 especially those experiments featuring severe asset inflation, unaccompanied by high […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[14985,2310,2500,7617],"class_list":["post-42093","post","type-post","status-publish","format-standard","hentry","category-economics","tag-brendan-brown","tag-depression","tag-history","tag-mises-institute"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42093","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42093"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42093\/revisions"}],"predecessor-version":[{"id":42094,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42093\/revisions\/42094"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42093"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42093"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42093"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}