Janet Yellen Just Made a Prediction That Will Surely Put Her in the Bad Forecast Hall of Shame

Joseph Salerno writes:

Uh-oh. Chairman Yellen assured us today that she does not believe that there will be another financial crisis "in our lifetimes."

You may recall another perfectly timed assurance by a high-powered economist:

The stability of the economy is greater than it has ever been in our history.  We really are in remarkable shape. ... The United States is at the peak of its performance in its history.  There has never been a time in the United States when we have had the state of prosperity, its level and its spread, that we have had in the last ten or fifteen years. ... It's unprecedented. I certainly do [give credit to Alan Greenspan for that]. I think monetary policy is primarily responsible for it (Milton Friedman, Charlie Rose Interview, December 26 2005).

We remain in the boom phase of the boom-bust business cycle but it is a boom and bust cycle and it will eventually end badly. Nothing has changed to eliminate financial crises  "in our lifetimes," given that Yellen, herself, is responsible for the current boom-bust cycle as head of the the money supply manipulating, interest rate manipulating, Federal Reserve.

Her comment reminds me of the one made by Irving Fischer just before the October 1929 crash:

  -RW