A journalist friend, James Fergusson, recently visited the once-gorgeous art deco Montazat Al-Lido hotel on the Dead Sea's northern shore. In the 1920s, it was a cosmopolitan beach resort (think guests arriving by Imperial Airways sea planes). Today it is far from the beach; long-abandoned; and distinctly unglamorous. Yet it isn't entirely empty. From thick layers of dust in the lobby, James picked up a couple of books. One made him think of me: The Economics of the 1960s by Colin Clark, published by MacMillan and Co Ltd in London in 1942. Yes, a forecasting book and and one that should act as a salutary reminder to all writers to forecast as little as possible, even if John Maynard Keynes considers you a "bit of a genius" (and particularly, perhaps, in the middle of a world war).
Clark had a good go at estimating the "most probable course of world populations, industrial development, prices, capital movements and interest rates" 20 years out (he saw the US boom and Japan's overtaking of much of the West). But a flick through reveals just how much human behaviour can mess with perfectly sensible-looking numbers. For example, Clark notes the "stagnancy" of the UK population and the misery that would result. He didn't see just how long the war would last (he thought the post-war boom and depression would be over by 1945) nor how the West would react to its end (lots of sex) our population was around 47 million in 1939 and 52.5 million by 1960.
Remember this in the coming weeks as you are told what will happen to housing, the US economy, markets and to the Brexit-bemused UK in 2019. It isn't just the next 50 years that are mostly unfathomable, but the next 20, ten and five, too. It makes no sense to extrapolate current trends forever. But nor is it worth spending too much time on the mostly unknowable events that might disrupt those trends either.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
On the plus side, one thing we do know is that little is more often wrong than the consensus so for a hint of the future, it's better to think about the things that others are not. In this week's magazine, John Stepek talks you through some "grey swans" for 2019, and Matthew Lynn forecasts that Facebook will buy The Times (bold!). Then we look at the euro. Everyone recognises its horrible flaws. Everyone reckons it will muddle through. Will it? Our confused MPs seem to think they can legislate against a no-deal exit. They can't it is the default. So it is more likely than most think.
Finally, Bill Bonner has been telling you for years that the US market is ripe for collapse. This may be the year he is right (on valuation grounds, it should be). Or it might not be. Either way, that James found Clark's book where he did shows two things. First, that everyone everywhere is always intent on learning what the future holds. Second, that the future is remarkably unco-operative.
-
Beat the cost of living crisis – go on holidayEditor's letter As inflation rages, energy bills soar and the pound tanks, what’s a good way to save money this winter? Go on holiday, says Merryn Somerset Webb.
-
How capitalism has been undermined by poor governanceEditor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
-
Don't be scared by economic forecastingEditor's letter The Bank of England warned last week the UK will tip into recession this year. But predictions about stockmarkets, earnings or macroeconomic trends can be safely ignored, says Andrew Van Sickle.
-
The biggest change in the last 17 years – the death of the “Greenspan put”Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
-
The wolf returns to the eurozone’s doorEditor's letter The eurozone’s intrinsic flaws have been exposed again as investors’ fears about Italy’s ability to pay its debt sends bond yields soaring.
-
Things won't just return to normal – that's not how inflation worksEditor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
-
Car hire and the strangeness of the post-pandemic economyEditor's letter A global shortage of hire cars and unusually high hotel occupancy rates sum up the post-pandemic global economy in a nutshell, says Merryn Somerset Webb, with enhanced demand meeting restricted supply.
-
Why we need to get a grip on our governmentEditor's letter Our government is trying to do too much, enacting policies that are destructive to the private sector. It needs to drop the the feel-good nonsense and create policies that lead to long-term wealth, says Merryn Somerset Webb.
