The "extreme precariousness of the basis of knowledge"

"The state of confidence, as they term it, is a matter to which practical men always pay the closest and most anxious attention. But economists have not analyzed it carefully.... Our conclusions must mainly depend upon the actual observation of markets and business psychology.... The outstanding fact is the extreme precariousness of the basis of knowledge on which our estimates of prospective yield have to be made. Our knowledge of the factors which will govern the yield of an investment some years hence is usually very slight and often negligible." 

- Chapter 12 "The State of Long-Term Expectation" from The General Theory of Employment, Interest and Money"  John Maynard Keynes 

I like the term "precariousness of the basis of knowledge". I had to help with a private company valuation in a fast-changing industry. The difference in valuation given some simple assumptions was enormous, and I was using some very standard valuation techniques. 

The same uncertainty problem applies to any forward estimate of rates, inflation, or the dollar. Perhaps we can speak to trend or views in the short run, but the range of potential estimates out to a year or more is so wide to be almost useless. Our only savior is the range of past behavior over a year horizon, but in a highly uncertain macro environment that conditional restriction may also work against an effective forecast.