“What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn’t be taking it to those who are willing to and are capable of doing so.”

Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes.

If we are dealing with psychology, then the thermometers one uses to measure it have an effect.

I came to a stark realization: chronic surpluses could be almost as destabilizing as chronic deficits.

They then need to reach a judgment about the probabilities, costs, and benefits of the various possible outcomes under alternative choices for policy.

A decline in the national housing price level would need to be substantial to trigger a significant rise in foreclosures, because the vast majority of homeowners have built up substantial equity in their homes despite large mortgage.

You can’t have the capitalist system if an increasing number of people think it is unjust.

They seem to sense… that gold and economic freedom are inseparable.

Gold still represents the ultimate form of payment in the world.

It’s not for anything other than an escape from what is perceived to be a fiat money system, paper money, that seems to be deteriorating.

We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs and price stability.

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.

The very nature of finance is that it cannot be profitable unless it is significantly leveraged… and as long as there is debt, there can be failure and contagion.

We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past.

Recent episodes in which Fed officials hinted at a shift toward higher interest rates have unleashed significant volatility in markets.

No one has ever eliminated any of that stuff.

Yet deregulation set the stage for an enormous wave of creative destruction in the 1980s.

The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions…

Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.

Derivatives have permitted the unbundling of financial risks.

Vision, the hallmark of leadership, is less a derivative of spreadsheets and more a product of the mind called imagination.