This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums.
ALAN GREENSPANThere’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.
More Alan Greenspan Quotes
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Gold, unlike all other commodities, is a currency…and the major thrust in the demand for gold is not for jewelry.
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Anyone willing to do what is required to become president of the United States is thereby barred from taking that office. I’m only half joking
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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.
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In an economy that already has lost some momentum, one must remain alert to the possibility that greater caution and weakening asset values in financial markets could signal or precipitate an excessive softening in household and business spending.
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Everyone has one. You have to, to exist you need an ideology. The question is whether it is accurate or not.
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No one has ever eliminated any of that stuff.
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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 was a fairly good amateur musician, and I was an average professional. But the one thing I saw was that the big band business was fading.
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Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices.
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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.
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At the risk of some oversimplification, if the skill composition of our work force meshed fully with the needs of our increasingly complex capital-stock, wage-skill differentials would be stable.
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Regulators have not been able to achieve the level of future clarity required to act pre-emptively.
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We need, in effect, to make the phantom ‘lock-boxes’ around the trust fund real.
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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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There is nothing to guarantee the superior judgment, knowledge, and integrity of an inspector or a bureaucrat-and the deadly consequences of entrusting him with arbitrary power are obvious.
ALAN GREENSPAN