Forecasting is difficult....

....especially when it's about the future.

The late John Kenneth Galbraith (who used to describe himself as "the world's tallest free-standing economist", though Dubai has probably bred a taller one by now) said that economists do not make forecasts because they think they know the future. They do it because people ask them to. Keep that in mind as you peruse all the prognostications for the new year and new decade.

It obviously makes sense to pay no attention to serially incorrect forecasters (happy new year, Anatole!). But what about those who have been right about things in the past -- say, those who predicted the credit crunch, or those who foresaw oil hitting $150 a barrel? On the one hand, this sort of track record should command respect. On the other, keeping in mind Galbraith's words of wisdom, you might put past successes down to luck, and work on the assumption that lightning is unlikely to strike twice in the same place.

In 1900 the great US financier J. Pierpoint Morgan was asked by a reporter what the stock market would do in the new century. He replied: "it will fluctuate". Morgan made a lot more money than I (or Kaletsky or Galbraith) could ever dream of, without ever contemplating a quarterly GDP forecast or scrutinising a CAPM analysis. Markets will fluctuate in the coming decade, politicians will make mistakes, one of the favourites will win the World Cup in July, someone as yet unknown will win the X-Factor. Sit back, enjoy the show -- well, apart from the X Factor, obviously.