After we went and got the pizzas for the birthday celebration of my youngest son, my second-youngest daughter (younger still) said, “Elizabeth [oldest daughter] says that gas prices will reach $6/gallon this summer.” I said, “If it were that certain, it would have happened already.” I added that there is a tendency for gas prices to rise a little in the summer, but that it wasn’t always so, and that refiners are not running at capacity, as it was the last time gas prices spiked.
This piece is a warning against listening to those that say something is certain to happen when the present price is far from what is predicted. If it really were that certain, it would have happened already.
I have my guesses, but I am not certain how the global economy or the markets will change from here. Beware certainty in matters economic. It blinds us to alternative ideas that might be less risky or more profitable.
Thus when you run across rhetoric like:
- Interest rates must rise.
- The US Dollar must fall.
- The US Government will go broke.
- Inflation must rise from here.
- The stock market is too high and will soon fall from here.
Be skeptical. There may be some wisdom there, but the result is not certain, or it would have happened already.
