The professor, who all claim predicted the banking collapse, was unable to predict the astonishing rise of bitcoin and cryptocurrencies. Following a “bubble” in 2013 when bitcoin rose to about $260, Roubini said:
“In good company with Gold. @Convertbond: While everyone was focused on Gold and Silver, #BITCOIN dropped another 40%, traded below $58.”
In a recent testimony before Senate’s Banking Committee, he said: “I have zero position and financial interest in this entire space. I have zero long or short position in any coin or crypto-currency and any blockchain business venture.”
This Friday he further clarified: “I never had any long or short position in any crypto asset or venture.”
Thus he did not buy even one bitcoin to see for himself how it works, yet they call him the prophet, the saga, and even the casandra.
That’s despite this great mind – who apparently could see what others couldn’t in 2006 – being unable to foresee the rise of bitcoin.
“The older generation of bankers would probably be completely unable even to imagine how the new system would operate and therefore be practically unanimous in rejecting it.
But this foreseeable opposition of the established practitioners ought not to deter us. I am also convinced that if a new generation of young bankers were given the opportunity they would rapidly develop techniques to make the new forms of banking not only safe and profitable but also much more beneficial to the whole community than the existing one.” – Friedrich Hayek in the Denationalization of Money.
The point of predictions is so that one can take action by accounting for it in their planning. The above statement by Hayek is undoubtedly a prediction that now decades on has been proven right. In contrast, the prediction of Roubini in 2006 is not a prediction. New York Times reports on September 7th 2006 Roubini said:
“In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession.
He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt.
These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac.”
After Alan Greenspan raised interest rates 18 times within two years up to 2006, that all economists could not foresee mortgage defaults and what was about to happen says a lot about the profession and almost nothing about Roubini for that is not a prediction. More of an obvious statement that no one wanted to make because at that point there was nothing that could be done about it.
Had he made such prediction when it mattered, before things had gotten out of hand and before the inevitable became obvious, then a new generation might have been impressed.
In the circumstances, we don’t want to fall as low as he has in a number of unsavory public statements by calling him a charlatan, but he did use this “prediction” to set up an economic consultancy firm; “spending much of his time shuttling between meetings with central bank governors and finance ministers in Europe and Asia.”
This man has apparently gone almost straight from university to “teaching at Yale and then in New York, while also being employed at the International Monetary Fund, the Federal Reserve, World Bank, and Bank of Israel.”
That’s while as an economist he is not distinguished, ranking 1,084th lifetime cited academic out of 2,700. Yet the Foreign Policy magazine lists him as fourth of the “top 100 global thinkers.”
Making him more of a political economist, perhaps even a media manufactured figure. One of the priest of the status quo defending bankers running amok, while looking down at young sinners who dare dream of doing something about his “prediction.”