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The only effective regulation lies in the propensity of customers to choose alternatives, of investors to move their funds elsewhere and of labour to acquire technical skills’.

Alan Greenspan

Given our inevitably incomplete knowledge about key structural aspects of our ever-changing economy and the sometimes asymmetric costs or benefits of particular outcomes, a central bank.
ALAN GREENSPAN

Aspect Bank Change Economy Ever Give Incomplete Inevitably Knowledge Outcome Particular Sometimes Structural
Anything that we can do to raise personal savings is very much in the interest of this country.
ALAN GREENSPAN

Anything Country Interest Much Personal Raise Say
[Republicans] swapped principle for power. They ended up with neither. They deserved to lose.
ALAN GREENSPAN

Deserve End Lose Neither Power Principle Republication Swap
Well, you probably will always believe there should be laws against fraud, and I don’t think there is any need for a law against fraud.
ALAN GREENSPAN

Against Always Any Believe Fraud Law Need Probably
Derivatives have permitted the unbundling of financial risks.
ALAN GREENSPAN

Derivative Financial Permit Risk Unbound
The problem is not lack of regulation but unrealistic expectations. What we confront in reality is uncertainty, some of it frighteningly so…
ALAN GREENSPAN

Confront Expectation Frightened Lack Problem Regulation Unrealistic
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.
ALAN GREENSPAN

Absence Confiscation God Inflation Protect Save
I think that real pressure is going to occur not by the initiation by the Federal Reserve, but by the markets themselves.
ALAN GREENSPAN

Federal Reserve Initiation Market Pressure Themselves Think
There is no safe store of value. Deficit spending is simply a scheme for the hidden confiscation of wealth.
ALAN GREENSPAN

Confiscation Deficit Hidden Safe Scheme Spend Store Value Wealth
I don’t know where the stock market is going, but I will say this, that if it continues higher, this will do more to stimulate the economy than anything we’ve been talking about today or anything anybody else was talking about.
ALAN GREENSPAN

Continue Go Higher Market More Stock
We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power.
ALAN GREENSPAN

Benefit Cash Guarantee Like Power Purchase
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.
ALAN GREENSPAN

Borrow Down Equity Historical Payment Significant Some Unusual Wipe
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
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.
ALAN GREENSPAN

Asset Banker Bubble Central Collapse Concern Do Economy Financial Threaten
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
If we allow terrorism to undermine our freedom of action, we could reverse at least part of the palpable gains achieved by postwar globalization. It is incumbent upon us not to allow that to happen.
ALAN GREENSPAN

Action Allow Freedom Terrorism Undermine
I guess I should warn you, if I turn out to be particularly clear, you’ve probably misunderstood what I’ve said.
ALAN GREENSPAN

Clear Guess Out Particular Turn Warn You
The number of mistakes I have made are just awesome. There is no number large enough to account for that.
ALAN GREENSPAN

Account Awesome Enough Large Made Mistake Number
I believe that the general growth in large [financial] institutions have occurred in the context of an underlying structure of markets in which many of the larger risks are dramatically — I should say, fully — hedged.
ALAN GREENSPAN

Belief Context Dramatical General Growth Institution Market Occur Risk Structure
We are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures.
ALAN GREENSPAN

Being Central Century Government Midst Once REquired Tsunami
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.
ALAN GREENSPAN

Appear Corner Cut Deny Manipulate Material Succeeded
There’s an interesting question here because if the gold price broke in that context, the thermometer would not be just a measuring tool. It would basically affect the underlying psychology.
ALAN GREENSPAN

Context Mean Price Psychology Thermometer Underlying
I’ve been in and out of Wall Street since 1949, and I’ve never seen the type of animosity between government and Wall Street. And I’m not sure where it comes from, but I suspect it’s got to do with a general schism in this society which is really becoming ever more destructive.
ALAN GREENSPAN

Animosity Between Descriptive E Even Government More Out Since Street Suspect Type Wall
Some succeed for a time. But while there may occasionally be mis-configurations among market prices that allow abnormal returns, they do not persist.
ALAN GREENSPAN

Among Configuration Market Occasionally Price Priest Some Succeed
Need to consider not only the most likely future path for the economy but also the distribution of possible outcomes about that path.
ALAN GREENSPAN

Consider Distribution Economy Future Likely Outcome Path Possible
The only effective regulation lies in the propensity of customers to choose alternatives, of investors to move their funds elsewhere and of labour to acquire technical skills’.
ALAN GREENSPAN

Chosen Customer Effective Elsewhere Investor Propensity Skill Technical
No matter how skillful the trading scheme, over the long haul, abnormal returns are sustained only through abnormal exposure to risk.
ALAN GREENSPAN

Abnormal Exposure Haul Long Matter No Return Scheme Skillful Sustain Trade

The only effective regulation lies in the propensity of customers to choose alternatives, of investors to move their funds elsewhere and of labour to acquire technical skills’.

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The only effective regulation lies in the propensity of customers to choose alternatives, of investors to move their funds elsewhere and of labour to acquire technical skills’.

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