Quote of the Day: The fastest road to bankruptcy in foreign exchange was an economics degree

Thirty years ago economists believed that “purchasing power parity” determined the “long term” currency rate between countries. And economists who became traders kept blowing up by selling the “expensive” currency and buying the “cheap” one. And, if anything, the opposite held: Currencies that were expensive kept getting more expensive. So it became known that the fastest road to bankruptcy in foreign exchange was an economics degree. More analytically, saying “the long term” without attaching a period to it (six months, six years, six hundred years, etc.) is meaningless. The duration is more relevant than the idea that currencies “converge.”

This from Nassim Nicolas Taleb, who along with Mark Spitznagel discuss "inequality, free markets and crashes" at the NationalReview.com