That’s the line spoken by Dirty Harry in Magnum Force right after he blew away his crooked boss. I also personally use that line to curb any tendency toward hubris I might have. For example, if you put me and Greg Morris in the same room, there is no doubt who is the smartest guy in the room, and it ain’t me. But I never doubt that I can bring a useful perspective to the table. In particular, Greg doesn’t think we can usefully apply technical analysis to economic charts. (My apologies to Greg if I haven’t quite gotten that right.) In the strictest sense, I probably agree, but I also think there are cases where the technical brain will gain some insight.
Here is a chart of the Velocity of Money*, which is the number of times one dollar is spent to buy goods and services per unit of time. The frequency of currency exchange can be used to provide some insight into whether consumers and businesses are saving or spending their money. If it is increasing, there is inflation risk, and deflation risk is implied if it is falling. We can see that it was relatively flat from 1960 to 1990, it increased into 2000 where it peaked, and notably, it has been trending downward since then. Two decades! The sharp drop this year has gotten all the news coverage, but the longer-term down trend signifies (to me) a marked tendency toward deflation.