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.
ALAN GREENSPANBy far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.
More Alan Greenspan Quotes
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The economy is turning, and credit comes in with a lag, .. To the extent that a number of small firms are finding it difficult to get the credit they need at a price they can afford, that’s likely to change for the better.
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Gold stands in the way of this insidious process. It stands as a protector of property rights.
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Greenspan, who knew so much more than most, knew far less than most supposed.
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Regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.
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I was raising the question on the side with Governor Mullins of what would happen if the Treasury sold a little gold in this market.
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It is regrettably the way human nature functions, whether we like it or not. What successful economies do is keep it to a minimum.
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Recent episodes in which Fed officials hinted at a shift toward higher interest rates have unleashed significant volatility in markets.
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Developing protectionism regarding trade and our reluctance to place fiscal policy on a more sustainable path are threatening what may well be our most valued policy asset.
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I have long argued that paying down the national debt is beneficial for the economy.
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Crony capitalism is essentially a condition in which… public officials are giving favours to people in the private sector in payment of political favours.
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Senator, we are groping for understanding, the knowledge you assume I possess doesn’t exist’.
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I cannot conceive of a politically feasible solution to this problem which will overdo cutting the deficit, where overdoing means harming the economy. It might be technically possible, but it is not realistic.
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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.
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Anything that we can do to raise personal savings is very much in the interest of this country.
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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.
ALAN GREENSPAN