Euro Bet Resolved

Well what are you going to spend it on?

I recommend another bet. You're on a winning streak. ;)

Don't count your chickens till midnight (Euro-time-zone?)!

This is why I do not bet. I'll bet that most of Caplan's bets will pay off as he's careful and focused on highly specific ideas. But a few big bets on major issues will fail -- just not often. Sadly, the large number of small bets he will win will raise his status as an analyst of important issues despite being wrong on weights and valuation.

Here's the analogy. If you were right on the housing bubble in 2000 but kept placing small bets every year, you would lose enough to just give up. Worse, betting markets would (and did) raise the status of those who bet on both the stock market and the housing markets increasing their ability to influence policy above and beyond the housing market. Since no amount of money that would be realistically bet is worth the loss to the world of raising Caplan's status as an analyst of fundamental problems, one should not take these bets.

Better to be lucky than good.

There really ought to be a betting clearinghouse web site just for economists, like that political one that Rasmussen Reports links to. If I had the time and web design know-how, I'd do it myself.

Use the $20 to buy Euros.

Use the $20 to short Euros. :-)