Political decisions are never random and will always lose out to innovative alternatives.
ALAN GREENSPANRegulators have not been able to achieve the level of future clarity required to act pre-emptively.
More Alan Greenspan Quotes
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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.
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If prices go down, we will have problems – problems in the sense of spillover to other areas.
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It keeps interest rates lower than they otherwise would be and frees savings to finance increases in the capital stock, thereby boosting productivity and real incomes.
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I must say, I never expected to see the day where I would be talking about anything other than reducing the debt, I’m running into the tyranny of zero, which is where you can’t reduce (the debt) any more
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And the percentage changes in wage rates would be the same for all job grades.
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Some succeed for a time. But while there may occasionally be mis-configurations among market prices that allow abnormal returns, they do not persist.
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I guess I should warn you, if I turn out to be particularly clear, you’ve probably misunderstood what I’ve said.
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There are no easy choices. Easy choices are long gone.
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People dont realize that we cannot forecast the future. What we can do is have probabilities of what causes what, but thats as far as we go. And Ive had a very successful career as a forecaster, starting in 1948 forward.
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Credit-default swaps, I think, have serious problems associated with them.
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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.
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I do not deny that many appear to have succeeded in a material way by cutting corners and by manipulating associates, both in their professional and in their personal lives.
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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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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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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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I’ve always argued that this country has benefited immensely from the fact that we draw people from all over the world.
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Market financed withdrawals of home equity in recent years.
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Excessive optimism shows the seeds of its own reversal in the form of imbalances that tend to grow over time.
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Even though some down payments are borrowed, it would take a large, and historically most unusual, fall in home prices to wipe out a significant part of home equity.
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I have one other issue I’d like to throw on the table. I hesitate to do it, but let me tell you some of the issues that are involved here.
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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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It seems superfluous to constrain trading in some of the newer derivatives and other innovative financial contracts of the past decade.
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The problem is not lack of regulation but unrealistic expectations. What we confront in reality is uncertainty, some of it frighteningly so…
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An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions.
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No matter how skillful the trading scheme, over the long haul, abnormal returns are sustained only through abnormal exposure to risk.
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We cannot rule out a situation in which a preemptive policy tightening becomes necessary.
ALAN GREENSPAN