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Has The Fed Ever (Accurately) Predicted A Recession?
Submitted by Peter Diekmeyer via SprottMoney.com,
In a recent survey not a single major central bank could provide an example of an accurate “a priori” recession forecast. The silence from the Federal Reserve, European Central Bank, BOE, BOJ and the Bank of Canada is deafening.
Precious metals investors rely heavily on economic projections when deciding where to put their money. But there’s something fishy in the land of mainstream forecasting. The US economy is now in its seventh year of recovery; however, Fed officials project growth as far ahead as the eye can see.
The Fed isn’t alone. Despite the fact that the US economy contracts for two consecutive quarters every six or seven years and is on schedule to do so again soon, not a single major central bank is forecasting a US recession as its baseline scenario. Why is that?
A miserable forecasting record
The Fed’s lousy forecasting record is well known. The US central bank completely missed predicting the 2008–2009 financial crisis and ensuing recession. Worse, it has consistently issued over-optimistic projections since then. Less well known is the fact that the US central bank appears to have never accurately forecast a recession before the country was already in one.
Two weeks ago I surveyed five major central banks, and not a single one could provide an example of an accurate “a priori” recession forecast. The silence from the US Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan and the Bank of Canada was deafening.
Signs of a slowdown abound
The lousy forecasting records of major banks is of particular concern these days because signs of imminent trouble are everywhere. According to the Bank for International Settlements global personal, business and government debt has risen by more than 40% since the 2008 recession. Central banks have been printing money at their fastest pace since the Weimar Republic. The S&P 500 index continues to flirt with record highs.
Trade barriers, which caused immense damage during the Great Depression, are popping up everywhere, a sign of worse things to come. These include “Buy America” and other similar policies, as well as investment and capital flow restrictions.
For example, the office of Jeff Sessions, a US senator, printed out a copy of the recently signed Trans Pacific Partnership Agreement. The 5,544-page document stood over two feet tall. The TPP is so filled with fine print that even its writers didn’t use the words “free trade” in its title. “Managed trade” (by bureaucrats) would be a better term.
Consulting a range of opinions
According to one of Canada’s top economists, who I spoke to at a recent symposium held by the Association of Quebec Economists, governments worry that if central banks issue a recession forecast, businesses and consumers will pare back their investing and purchasing; this alone could cause a recession even if one weren’t already on the way. Large financial institutions have similar worries. If they predict a recession, their borrowing business will drop.
There is a good argument to be made that the more independent the forecaster, the better they are able to “call a spade a spade.” For example, Glen Hodgson of the Conference Board of Canada (a mainstream organization, but one that is outside the financial sector) was one of the first economists to suggest that Alberta had entered its most recent recession.
In short, if precious metals investors are relying on central bank forecasts to guide their investment decisions, they may be in for a rude surprise. By the time the Fed “projects” the next recession, there is a good chance that the US economy will already be in one.
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i thought the recession started in 1913, when did it end?
it will end if we let in 400 million muslims into the us, until they replace/kill us all and establish and islamic north american state
I'm certainly not waiting on a recession to buy precious metals. I'm certain that eventually the central banks themselves will be the cause of a depression worse than anyone has ever seen. The timing really isn't that important.
Clearly it ended in 1971 when Nixon decided to take it out of the closet and party big time.
For a central bank to admit it can predict a recession implies it can change policy to prevent one. They are not in the business of stopping recession, just to keep the taps wide open until they bust.
True. Predicting recessions would be antithetical to their business model. Not only that it would tip off the sheeple.
Lol, already in one? More than likely we,ll already be both in and OUT of the recession by the time the Fed admits it...if you're lucky and they actually admit that there was in fact a recession.
If a recession comes and the Fed doesn't admit it did it really happen?
Association of Quebec Economists...ranks right up there with the Association of Samoan Pole Dancers.
Would that be better or worse than the NAR?
Silly child they dont predict those. They trigger them making sure all their friends make bank off it.
If they told people the truth people would not invest in anything but gunpowder, shells, bullets, beans, bullion, bacon, booze, and guns.
This is critical to understanding the optimism bias in economists, bankers, and the financial / mainstream news media. They are cheerleaders and nothing more. They should never be trusted or believed.
MY FELLOW. trusting and believing is a fargone idea. THEY SHOULD ALL BE SENT TO SOME SLAUGHTERHOUSE with a pink slip.
Canada has no need for BOC. Court case is proceeding and getting no press...Canada has the ability to ditch these idiots. So why is gov. of Canada....gov. of US? supporting these Central Bankers and giving them God-like control?
It is a simple question. And the electorate needs to ask it. Electorate needs to scream it and not quit screaming until an honest answer is given. NO reason for Central Banking. Period and end of lies.
Why ruin a good slaughterhouse? Make them begin work to clean up Fukushima with radioactive suits with plenty of holes..no one will notice nor care.
http://www.seattlepi.com/local/science/article/More-Fukushima-radiation-...
The clowns are telling us WE are responsible for "Global Warming"; the best proof of the farce is to see the "Glorified Meteorologist" (AKA: lying Climatologists) debate each other on the "issue"..the truth comes out in these.
It retroactively predicts recessions.
That's what you plebes still dont get. It's like Barry Soetoro. Who gives a fuck he fucked the country and has reneged on every campaign promise he ever made. He's the fucking prez. It. DON'T. Matter.
The only people who suffer consequences for fucking shit up are low class plebes scumbags... like us. When you hit that 1% boooooy, that shit don't apply anymore. You can be a black man in LA and murder your white wife in front of the entire country and walk away laughing. “If it doesn't fit, you must acquit."
That's how that works.
BOOOYEAH.
It's not like OJ was part of the 1%. Plus it's become pretty common knowledge that the son was more likely to be guilty.
What a liberal way of seeing things .... cheerleaders and coaches and team members .... don't root for the other team .... nor show their playbook ?
New England Patriots playbook?
Just all coincidence - NOT! Always planned; why else would they not allow the meeting discussions to be heard until 5 years have passed?
These central banks can't even give you an accurate forecast of the past, never mind the future!
If the patient is brain dead and on life support, but still has a heart beat, is he still alive?
Has Any Government Employee Ever (Successfully) Tied Their Own Shoes?
I know the Fed knew about the crash coming in 2008, not the exact date/month but the general time frame. How do I know? Because a friend was an analyst that personally told the Fed what was going to happen. The Fed was their client.
Just becasue the Fed didn't actually tell anyone, isn't the same as saying they didn't know.
MADE a recession ... every fucking time!
Predicted one (accurately) NEVER ...counter productive to SOP.
Predicted, no. Created, yes.
To predict accurately would be to admit that they had foreknowledge. Since the bankers, including the Fed, actually create recessions, the last thing they would want to do is predict their own actions. It would be admitting criminality.
When job #1 is protecting the banks, a recession is just a disturbance in the force.
predicted any recessions? no
they have created a few tho
too my knowledge, all their predictions on GDP, inflation, and unemployment have all been way off
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The fact is that Fed forecasts can't be trusted and all the insiders know it.
The other night in a Freakonomics interview Bernanke said that he never publicly admitted that the US economy was in trouble in 2005-2006, because he was a "representative of the government" or words to that effect.
Greenspan said something similar last year, when he called comments that the Fed was independent "naive."
Do you really expect snake oil central bankster salesmen to say:
'Wait until next week, my snake oil will be cheaper then and you will get a bargain instead of buying today'
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Looks like Larry Summers reads Zero Hedge...in his most recent column he writes:
"No postwar recession has been predicted a year in advance by the Fed, the White House or the consensus forecast....."
https://www.washingtonpost.com/opinions/preparing-for-the-next-recession...