It is always dangerous to make predictions. All we can really do is take our best guess based on the facts that we have. It really is amazing how many people make crazy predictions though and they are things that are completely beyond our control. It even happens with libertarians.

If you have a basic understanding of Austrian economics, then you should understand that economics is really a study of human action. Human Action is the name of Mises’ biggest and most famous book. You should understand that economic activity is made up of the decisions of millions of different people acting in their own way.

If we are going to make predictions, they should be reasonable. For example, if the money supply goes way up (and the money doesn’t sit as excess reserves at banks), then it is reasonable to predict there will be price inflation. But we should realize that this isn’t even a guarantee. It is likely, but not a guarantee. The money supply could double, but it is technically possible for the demand for cash to increase dramatically and for prices not to go up.

It is also reasonable to predict that politicians will continue to try to spend more and more money and make government bigger and bigger. It is generally a safe bet. But again, you are predicting the behavior of individuals. It is possible that a bunch of politicians will see the light and become honest and make government smaller. It is highly unlikely, but not necessarily impossible.

But then you get completely ridiculous predictions. There are predictions that we will have hyperinflation, or war with Iran, or a new world order, or a new currency in the next year. There wouldn’t be anything wrong with these predictions if the people making the predictions admitted that it is only their best guess based on the circumstances. But for some people to make it sound like it is an inevitability is crazy. If it were Ben Bernanke predicting hyperinflation, we might want to listen because he might be able to make it happen. But everyone else is predicting human behavior and they shouldn’t be so certain about their predictions.

If someone makes a prediction and says it like they are guaranteeing the outcome, you should think twice about listening to what they are saying. You can take a guess at human behavior, but you can never be certain.