"Did someone predict the crisis before it happened? ... If the answer is no, I don't want to hear what the person says. If the person saw the crisis coming, then I want to hear what they have to say."
"You have a million people on this planet who call themselves economists," Taleb said. "How many people understood the risks of the system [before the crisis]? ... Paul Krugman was not one of them."
"This transformation of private debt, with all the moral hazard it entails, into public debt is, number one, from a risk standpoint, bad," he said. "And from an ethical standpoint, I find it immoral. The grandchildren should not bear the debts of the grandparents."
Taleb called Friedman's book The World is Flat "very bad for society," arguing that it did not adequately assess risk.
One person who did see the crash coming? Nassim Taleb. "In 2008, when the crisis happened, a lot of heads of state were interested in my message," Taleb said. "Including David Cameron."Full article HERE.
Asked where the economy would be in 25 years, Taleb gave the vague response that "everything fragile will break." Oh, and that the Fed won't exist anymore. It will be replaced by something "I think more organic and that makes more sense."
Taleb is one of the few people that I tend to agree with the most. I believe viewing the economy as a complex system, the way an engineer would, is necessary. When done in that regard, issues of complexity, fragility, robustness, etc... become much more clear than merely looking at profits and losses. For what does one gain, if the system is about to collapse? Actually, a lot if the proper bet is made.
The question that remains is: how does this play out amongst nations? Many analysts don't look beyond economics to consider influential geopolitical factors. The Great Depression did not end with innovative uses of monetary and fiscal policy. The Great Depression ended with the dropping of bombs... and a new monetary system emerged. A rebuilding and the emergence of a new world.
Next week will give us a clue as to how the G20 summit in South Korea plays out. Next week, the IMF meets. The G20 and the IMF are the two most important institutions to follow when looking at the grand scheme of things. These developments will tell us if conflict or cooperation lies on the horizon.