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Tuesday, January 9, 2018

The Things That Can't Happen

I just happened to see that the price of oil (Brent) is within a dollar of $70 per barrel.  For the longest time, the "experts" told us that could never be.  There were too many shale wells in the USA which would flood the market if the price exceeded $50 per barrel.  It would stop any steep price rise.  Well, they were wrong.

This is just another of those economic events that the experts say will not happen.  A second example comes from the large group of economists who pronounced a 2% growth rate for the USA as the new normal.  We all just were supposed to get used to it, particularly after the 8 Obama years averaged that slow level of growth.  Now, after almost a year with President Trump, we are seeing persistent growth in excess of 3%.  In other words, the very thing the experts assured us could no longer happen is actually happening.  Once the tax cuts kick in and growth accelerates, we will likely see growth twice the supposed "normal" level of two percent.

I wonder how these folks got to be "experts".  Surely, it wasn't their predictive skills. 

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