Economists seem to consistently get it wrong.
While there are a select few that nail big economic trends, most of the time their calls are way off.
I’ll give you an example…
Back in the fall of 2009, just after one of the worst financial crises of all-time, economists were calling for higher interest rates.
They said the worst was behind us. Many economists thought the economy would recover similar to past recoveries. That meant interest rates would slowly tick higher.
They thought rates would begin rising in 2010. They also thought rates would reach about 4% by 2015.
As we now know, this recovery was unlike anything we’ve ever seen. Rates were still basically at 0% in 2010. And they remained near zero until 2015. (Even after some raising by the Federal Reserve, they’re still pretty darn close to nothing at 1.75%.)
Rates have been nowhere close to 4% in more than 10 years.
What made it worse was that from 2009 to 2015, economists made the same higher interest rate prediction every year. And every year they were wrong.
As you can see below, economist’s projections of interest rates (the colored lines) have been consistently too high (and wrong) for the past decade…
It’s not just interest rates. Economists have been wrong about the health of the labor market, too.
Over the past decade, they have consistently projected that unemployment would be much higher than it actually was. They thought unemployment wouldn’t fall below 5%.
It’s currently at an all-time low of 3.5%. And it may head lower from here…
I could bring up countless more examples of big economic predictions gone wrong… but the point is that you can’t rely on every projection you hear from the so-called “experts.”
It’s nearly impossible to accurately predict what is going to happen over the next few years in the economy. Just a few years ago, who would have predicted stocks would be at all-time highs despite a massive trade war with China.
So when I hear forecasts from economists, I don’t pay too much attention…
But like I said earlier, there are exceptions. Some financial minds just have a knack for predicting what’s coming ahead.
Look no further than our very own Steve Sjuggerud as an example. If you’ve put money into one of his big market predictions, you’ve likely made a lot of money.
Steve has been pounding the table for a stock market “Melt Up” for years. At first, no one wanted to listen to him. But over time, he has been proven right… once again.
Stocks just recently hit new all-time highs. The S&P 500 is up over 25% this year. The DOW is trading over 28,000.
One of Steve’s Melt Up stock recommendations has even returned over 200% since January.
And Steve is confident that the melt up will continue…
There are few people that make predictions that I want to listen to… but Steve is one of them.
Porter Stansberry is someone else you’ll want to pay attention to if he makes a big market call. Over the past decade, he predicted the bankruptcies of:
- General Motors
- Fannie Mae
- Freddie Mac
As a partner at Stansberry Research, I’m incredibly proud of the team we’ve put together over the years. I truly believe we have some of the smartest financial minds in the business.
Here at Stansberry Research, we’ve recommended some big winners over the years, but what I hear the most from our long-time subscribers is how grateful they are for the education they’ve received from reading our work.
And that’s what I’m most proud of…
I tend to stay away from big market calls (unless I’m 100% sure of it). What I like to do is recommend safe money-making investments and try to empower my subscribers to take control of their health and wealth. I want them to make the smartest decision for themselves.
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My Retirement Millionaire subscribers just read about how the potential for cloud computing hasn’t even come close to its limits. They received my favorite stock to benefit from that trend.
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We have a lot of products and services here at Stansberry Research…
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What We’re Reading…
- Economists got the decade all wrong. They’re trying to figure out why.
- The global economy shows signs of regained footing.
- Something different: Forget piggy banks. Kids are using mobile apps for pocket money.
Here’s to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
December 18, 2019