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How do we know when irrational exuberance has unduly escalated asset values?

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Escalate Exuberance Irrational Unduly Value

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Marilyn Monroe Paulo Coelho Abraham Lincoln C. S. Lewis Khalil Gibran Charlie Chaplin Gautama Buddha Isaac Newton

When trust is lost, a nation’s ability to transact business is palpably undermined.
ALAN GREENSPAN

Ability Business Loss Nation Palpably Transact Trust Undermined
Gold stands in the way of this insidious process. It stands as a protector of property rights.
ALAN GREENSPAN

Gold Insidious Process Properly Right Stand
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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Appear Corner Cut Deny Manipulate Material Succeeded
We are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures.
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Being Central Century Government Midst Once REquired Tsunami
But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?
ALAN GREENSPAN

Country Decade Escalate Irrational Past Subject
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 GREENSPAN

Abandonment Banking Credit Gold Made Possible Standard Statics System Use Welfare
This decade is strewn with examples of bright people who thought they built a better mousetrap that could consistently extract abnormal returns from the financial markets.
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Better Built Decade Example Financial Market Mousetrap People
History demonstrates that participants in financial markets are susceptible to waves of optimism.
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Demonstrate Excessive Financial History Optimism Particular Wave
…our market system depends critically on trust-trust in the word of our colleagues and trust in the word of those with whom we do business.
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Colleagues Critical Depend Marlet System Trust World
The arts develop skills and habits of mind that are important for workers in the new economy of ideas.
ALAN GREENSPAN

Art Development Economy Habit Idea Importance Mind Skill Worker
But rules cannot substitute for character.
ALAN GREENSPAN

Character Rule Substitute
I didn’t believe in absolutes, moral or otherwise. If I couldn’t prove a proposition with facts and figures, it was without merit.
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Absolute Believe Fact Figure Moral Otherwise Proposition
The increased flexibility of our economy, which has fostered our extraordinary resilience to shocks.
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Economy Extraordinary Flexible Foster Increase Shock
If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.
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Antagonism Difficulty Gold Grasp Standard Statistic Understanding
They seem to sense… that gold and economic freedom are inseparable.
ALAN GREENSPAN

Economic Freedom Gold Inseparable See Sense
Amateurs want to be right. Professionals want to make money.
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Amateur Money Professional Right
We need, in effect, to make the phantom ‘lock-boxes’ around the trust fund real.
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Box Effect Fund Lock Make Need Phantom Real Trust
The tub helps me relax, and it’s a great place to read.
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Great Help Place Read Tub
If you get beyond the political rhetoric [and assembled a group to solve Social Security] it would take them 15 minutes. It would take them 15 minutes only because 10 minutes was used for pleasantries.
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Group Minute Pleasantries Political Rhetoric Security Solve
Protectionism will do little to create jobs and if foreigners retaliate, we will surely lose jobs.
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Create Foreigner Job Little Lose Protectionism Retaliate Surely
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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Capitalism Condition Crony Essentially Favour Private Public
There are no easy choices. Easy choices are long gone.
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Choice Easy Gone Long No
Derivatives have permitted the unbundling of financial risks.
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Derivative Financial Permit Risk Unbound
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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Cannot Conceive Cut Deficit Economy Harm Overdo Overdue Political Realistic Solution
American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.
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Alternative Belief Consumer Country Great Lender might Mortgage Product Provide Traditional
We cannot rule out a situation in which a preemptive policy tightening becomes necessary.
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Necessary Out Policy Preëmptive Rule Situation Tight
Everyone has one. You have to, to exist you need an ideology. The question is whether it is accurate or not.
ALAN GREENSPAN

Accurate Everyone Exist Ideology Need Question

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