The Plague of the Witch Doctors By Nelson Hultberg

February 11, 2008

"Here we are yet again in the midst of another 'global economic crisis'," says financial analyst, Nicholas Vardy, editor of The Global Guru. Vardy is not reporting, but mocking. For he is one of the establishment cheerleaders respected by Wall Street, and he does not look kindly upon those considered to be bears in today's world. There was a lot of castigation in his latest missive to us in the hinterland (2/5/08). So what I wish to do in this essay is investigate some of Vardy's derisive barbs and see how substantive they really are. His comments are in italics; my answers follow in regular font.

Before you liquidate your financial assets, buy gold bullion, and move to a cave in Montana, you may wish to consider that current predictions of global economic collapse may be simply hyperbole. It has happened before.

Yes, hyperbole accompanies all economic crises in history, most of which do not result in collapse. But the presence of hyperbole does not negate the disastrous policies that create the potential for a collapse. It is the policy sources of the potential collapse that we must investigate here, not the tenor of the voices exclaiming its coming.

Comparing economic statistics is inevitably a "glass is half empty" versus "glass is half full" kind of game. Both Pollyannas and Cassandras can marshal endless statistics to support their version of events.

more

http://www.afr.org/Hultberg/20080211.htm