There’s a long tradition in this country of loving psychics and obscurantists, especially when they’re predicting the end of days.  Is Gerald Celente simply the latest in a long line of the hucksters, or is he for real?  His claims are far-reaching and impressive– that he “predicted the stock crash of 1987″ and the “fall of the soviet union.”  He seems to have appeared on some semi-reputable news programs as well (despite the fact that his homepage video seems to be mostly clips from the “RNN” which is trying hard to look like “CNN.”)  Finally, some of his strongest critics really don’t make much of a case.  We’ll start by considering what’s really making his name right now, his seemingly impressive 2007 prediction that:

Just as the Twin Towers collapsed from the top down, so too will the US economy from an Economic 9/11. When the high-stake speculators, banks, brokerages, and buyout firms that leveraged billions with millions get hit…  Failing banks, busted brokerages, toppled corporate giants, bankrupt cities, states in default, foreign creditors cashing out of US securities … whatever the spark, the stage is set for panic in the streets. When the giant firms fall, they’ll crush the man on the street.

This appears in in his “Quarterly Trends ’08″ journal (published in Dec. 2007), which is previewed on the website.  Starting at that first sentence, it really does appear accurate.  It seems supernaturally dead-on, but does it stand up to scrutiny?  Well first-off let’s compare it to some good economists from around the same time.  Here’s Columbia’s Joseph Stiglitz in January 2008 (within about a month of Mr. Celente’s global trends report), from an article titled “Stagflation Cometh“:

For America today, the real question is only whether there will be a short, sharp downturn, or a more prolonged, but shallower, slowdown.

Basically, will there be a crash or a recession?  Princeton Economist Paul Krugman was on the same page in December 2007 (the month that Celeste published his predictions):

I’ve never seen financial insiders this spooked — not even during the Asian crisis of 1997-98, when economic dominoes seemed to be falling all around the world.

The point is, Dec-Jan 2007 was not simply a time of fat-cats lighting cigars with $100s while the media shined their shoes.   The criticism and concern about the economy started well before (years before, in fact, when there was concern over the ’05 “housing bubble”) and you could read about it right in the New York Times (Krugman is a columnist there).  Celente’s prediction in the first sentence was not unique, except perhaps for a level of impressive specificity about “leveraging billions with millions.”  But even there it’s hard to give Celente too much credit, since financial crashes basically all have to do with leverage; that’s what crashes are.  So looking simply at this prediction, Celente seems impressive and accurate though not supernatural.  But let’s consider his other predictions from the newsletter (the same 2008 Trends newsletter that his “crisis” prediction appeared in) and see how accurate they were:

1. Pointed out the expectation that the “economy will spiral down and that the dollar will fall with it”

2. Describes “Tax Revolts” that battle to “repeal taxes.”

3. Points out that “if intelligently deployed and spiritually practiced, the “Small is Big” trend can lead to more progressive advancement and greater rewards.” (yes that’s the summary of an entire prediction.)

As for prediction #1, have a look at this helpful chart of the US Dollar in 2008 and note especially the impact of the October crisis on the Dollar.  As for #2, I didn’t notice any big tax revolts calling for no taxes; I heard the standard political pandering about cutting taxes which comes every election cycle of course.  As for #3–and the handful of other predictions which you can view here– it’s too vague to be meaningful obviously.    So he’s got one concrete prediction which just confidently echoed mainstream sources, along with a slew of wrong predictions and vagaries. A seer he is not.

I have been unable to find sources for his other predictions which go back 20 years.  My educated guess, though, is that they’re about the same as his “famous” 2008 crisis prediction– namely confidently parroting  the thought of people who know what they’re talking about and/or constructing his analysis vaguely enough that it could predict a whole slew of things.

Relevant here is the “Jeane Dixon effect“, which

…refers to the tendency of the mass media to hype or exaggerate a few correct predictions by a psychic, guaranteeing that they will be remembered, while forgetting or ignoring the much more numerous incorrect predictions.

Jeane Dixon was famous for “predicting the assassination of JFK” by claiming that “[the upcoming president] will be assassinated or die in office though not necessarily in his first term.” That is a pretty impressive claim, by itself.  The problem is that she was wrong about countless other things; the article linked above notes that “She predicted that the Soviets would beat the U.S. to the moon and that World War III would begin in 1958 (Montgomery 1965: x). She foresaw a holocaust for the 1980s and that Rome would then rise.” While I think that Gerald Celente is unquestionably benefiting from the Jeane Dixon effect, I wouldn’t lump him in with the phony psychics and visionaries, not yet anyway.  One thing that differentiates Celente is that his predictions don’t all read like vague nonsense, crafted to cover the widest range possible circumstances.  Some of them, in fact, read like overly terse summaries of major thinkers (like Krugman and Stiglitz) which isn’t too bad, and might even be worthwhile for some people (though you have to pay for his newsletter.)  This really shouldn’t be surprising since it turns out that he doesn’t just read tea leaves:

According to Gerald Celente, Director of the Trends Research Institute and author of Trends 2000, the key to tracking trends is to read two newspapers every day with a purpose — either The Wall Street Journal or The Financial Times, plus The New York Times or USA Today. Look for stories with social, economic, and political significance, be it about the difficulties older suburbs face or the current currency crisis.

Celente may be a psychic for the new millennium then; just like Darren Brown took the hoaky magic of David Copperfield and made it sexy with appeal to psychology and behavior studies, Celente may take the tradition of public psychics and add a dose of insight and fact from real political analysts.  That said, Celente is not positioning himself as if he’s simply the synthesizer of information that he is, but rather as a unique trend-spotter who’s able to see through the chaos of modern information to spot the true directions.  This is dangerous, especially when he’s predicting a depression worse than the ’30s and something like riots and revolution in the U.S.  For one thing, if you get through to enough people that can become a self-fulfilling prophecy.  For another, he’s suddenly breaking with learned opinion (like the kind he sided with, and presumably relied upon, to make his prediction).  Stiglitz and Krugman aren’t predicting the oceans flowing with Lemonade or anything, but they both advocate broadly Keynesian spending programs to alleviate the problem.  You can find recent clips of the “apolitical” Celente on rightwing TV bashing these programs (like an expansion of unemployment insurance and infrastructure spending) as “moronic.”  It’s at this point where Celente goes badly off the rails and becomes dangerous.  It’s one thing when he’s expounding his fuzzy visions and received wisdom about the future–it’s another when he’s actively calling out the sort of policy that might avert the messes he’s predicting.  Prediction for 2009: if we keep our wits about us and avoid herd panic, we can begin to weather the storm and guys like Celente will be long forgotten*.

*Until he shows up again in 2011 with a remarkably correct prediction about how “efficiency delineation protocols, if handled with competence, will result in  a sharp uptick of advancement and positive overall results.”

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