Thursday, March 05, 2015

Diverging Predictions

Predicting the future can be hard. That's why Tomorrowland sucks so bad. But we like the idea that it's possible to do, with the right information. And so we hope that experts, who have studied all the information available, will come to agree.

Sometimes that works out. Now, no one knows who's going to win the Champions League this year, but no expert is predicting Basel, right? There's a range of legitimate expert opinion. A handful of teams are possible winners, and the rest is crazy talk.

One thing that bothers me is the areas in life where expert opinion is so wildly scattered. In the past few years, while some people worry about an impending U.S. hyperinflation, the Federal Reserve has been battling an impending deflation. This isn't a disagreement over -2% versus 3%. It's more like -2% versus 300%.

Here's an article with the reasonable title "Doomsday: Preparing for China's Collapse." Its opening paragraph calmly notes, "the Chinese Communist Party (CCP) [has] reached the final stage before collapse." Is it possible that the "Chinese century" will end before it's even a quarter of the way over?

Most people aren't talking about the collapse of China. Recession, okay, but not collapse. When expert opinions diverge so wildly, it's impossible to say what's coming next.

I guess we should expect more divergence, not less. After all, were any Communist bloc watchers saying in the summer of 1989, "Just a few more weeks now"? Crazy things happen in the world, quickly, with little warning. If there is a Chinese collapse in our future, and we saw it coming from months away, it wouldn't really be a "collapse," would it? But I wish opinion wouldn't be so widely scattered.

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