Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices.
ALAN GREENSPANI’m always amazed that my wife can handle different subjects – one day politics, the next day foreign policy.
More Alan Greenspan Quotes
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Such caution seems especially warranted with regard to the sharp rise in equity prices during the past two years. These gains have obviously raised questions of sustainability.
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[Republicans] swapped principle for power. They ended up with neither. They deserved to lose.
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Revolutions are something you see only in retrospect.
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Need to consider not only the most likely future path for the economy but also the distribution of possible outcomes about that path.
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I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.
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If I’ve made myself clear, I’ve misspoken.
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We will have more crises and none of them will look like this because no two crises have anything in common except human nature.
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Skilled shortages in America exist because we are shielding our skilled labor force from world competition. [Visa quotas] have been substituted for the wage pricing mechanism.
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We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past.
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I think that real pressure is going to occur not by the initiation by the Federal Reserve, but by the markets themselves.
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We may be in a rapidly evolving international financial system with all the bells and whistles of the so-called new economy. But the old-economy rules of prudence are as formidable as ever. We violate them at our own peril.
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While these tendencies were no doubt in train in the “old,” pre-1990s economy, they accelerated over the past decade as a number of technologies with their roots in the cumulative innovations of the past half-century began to yield dramatic economic returns.
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The free lunch has still to be invented.
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The recent evidence increasingly suggests that an economic expansion is already well under way, although an array of influences unique to this business cycle seems likely to moderate its speed.
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American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.
ALAN GREENSPAN