Every single day, we see all kinds of economic predictions, from the sunshine economists to the doomsday Cassandras. Most are published by the major newspapers or news sources and most of these individuals have credentials that are flawless and are supposedly authoritative to the comments they are making. Or is it?

We normally see things like “Past Performance is not indication of Future earnings” or things to that effect. We also see Nobel Laureates with exactly opposite predictions. Strange, isn’t it? Given that they are supposedly the authoritative experts in their fields.

I don’t find it strange if you consider this. The overload of information is beyond anyone, especially given the spread of the Internet. No longer is Physics just Physics, Economics just Economics. The irony being, the more you study, the higher level your studies, the more narrow your focus. Take Physics for instance, you can be narrowing down to a subatomic particle in your quest for a Nobel. I am not saying that your knowledge will be zero elsewhere, just that the more specialized you are in an area, the less likely you will be good in the general field. Economics being a social science has far more variables. Therefore it is not unusual for two experts to disagree and produce two exactly opposite predictions and both being wrong. The common man in the street may have a better prediction.

For the general economists and analysts, the situation is this, the more predictions I offer to a newspapers for instance, the greater chance that one of them strike the lottery. When this happens, I can start crowing on that particular prediction and safely ignore the rest. The public has very short memories of what wrong predictions you had made and you will be famous for a while which allows you to make full use of that 15 minutes of fame to grab whatever monies is available.

In the information overload of today’s society, just taking predictions with a pinch of salt will ensure that you will be suffering from hypertension. My advice is leave that salt alone, just take the information through the left ear and have it leave through the right ear with zero processing by your brain. Do use a bit of your common sense, it helps and it won’t diminish the more you use it. On the contrary, common sense increases the more the usage.