Top 199 Quotes & Sayings by Alan Greenspan - Page 2

Every economy exists, no matter what the level of democracy, has elements of crony capitalism. It's - given human nature and given the democratic structures, which we all, I assume, adhere to, that is an inevitable consequence.

Europe is very critical to the United States in the sense not only do we have a fourth of our exports there, but more importantly, a significant proportion of the foreign affiliate profits in fact, half of U.S. corporations, are in Europe.

It's hard to tell which assets will be toxic. The best way to ensure that only shareholders and banks feel it is have adequate capital.

The only way to have several currencies from divergent nations lumped together is if they are culturally close, such as Germany, the Netherlands and Austria. If they aren't, it simply can't continue to work.

I think the whole issue of a debt ceiling makes no sense to me whatsoever. Anybody who is remotely adroit at arithmetic doesn't need a debt ceiling to tell you where you are.

Most high-income people in our country do not realize that their incomes are being subsidized by their protection from competition from highly skilled people who are prevented from immigrating to the United States. But we need such skills in order to staff our productive economy, so that the standard of living for Americans as a whole can grow.

One of the problems with hedge funds is that they are changing so rapidly. If you have the balance sheet that closed business last night, by 11 A.M. this morning, that won't tell you very much about what they're doing.

Manufacturing capacity is not a rigid level against which one bounces. When you are dealing with a world economy, with a flexibility to employ production facilities other than one's own, then the concept of capacity is vaguer.

Since 1948 I have spent every single day thinking how the economic and political worlds have changed.

The purpose of a politician is to be a leader. A politician has to lead. Otherwise he's just a follower.

If somebody had said to me in June or July of 1987, 'We'd like you to become chairman of the Federal Reserve, but you're never allowed to discuss any economics after you leave,' I'd have said, 'Forget it.' What do they want me to do? Become an anthropologist?'

The central focus of what we are doing at the Fed is to keep inflation from accelerating - and preferably decelerating.

There's no other job in public life that is like chairman of the Fed.

I wasn't able to do much reading when I was chairman of the Reserve Board. The workload was too large, and the luxury of reading was not available to me. So I caught up a good deal when I left office.

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. So I made an economic decision, and it turned out the best judgment I ever made in my life.

The culture of Greece is not the same as the culture of Germany, and to fuse them into a single unit is extremely difficult.

It is very difficult to predict when a bond crisis could happen.

We're a democratic society. Shutting down the government should not be on the agenda.

What I see in the corporate sector is very clearly an issue of a major shortfall in the issue of, what some people call confidence, but whatever you want to call it. Clearly people are looking out in the very distant future and they are saying that it is too complex.

Diplomacy is really far less important than the stock movements within Russia.

If prices go down, we will have problems - problems in the sense of spillover to other areas.

Since I've become a central banker, I've learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said.

Capitalism is based on self-interest and self-esteem; it holds integrity and trustworthiness as cardinal virtues and makes them pay off in the marketplace, thus demanding that men survive by means of virtue, not vices. It is this superlatively moral system that the welfare statists propose to improve upon by means of preventative law, snooping bureaucrats, and the chronic goad of fear.

Skilled shortages in America exist because we are shielding our skilled labor force from world competition. [Visa quotas] have been substituted for the wage pricing mechanism. In the process we have created [a] privileged elite whose incomes are being supported at non-competitively high levels by immigration quotas on skilled professionals. Eliminating such restrictions would reduce at least some of the income inequality.

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. Some succeed for a time. But while there may occasionally be mis-configurations among market prices that allow abnormal returns, they do not persist.

We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power.

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?

Rules cannot take the place of character.

There are no easy choices. Easy choices are long gone.

If you think you understand what I am saying you do not understand what I am saying.

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. But material success is possible in this world and far more satisfying when it comes without exploiting others.

In general, corruption tends to exist whenever governments have favors to extend, or something to sell.

What an ideology is is a conceptual framework with the way people deal with reality. Everyone has one. You have to, to exist you need an ideology. The question is whether it is accurate or not.

Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted.

But rules cannot substitute for character.

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.

Amateurs want to be right. Professionals want to make money.

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

The number one problem in today's generation and economy is the lack of financial literacy.

Excessive optimism sows the seeds of its own reversal.

We are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures. Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity are in a state of shocked disbelief.

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.

Regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.

Indeed, better risk management may be the only truly necessary element of success in banking.

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. The number of mistakes I have made are just awesome. There is no number large enough to account for that.

No matter how skillful the trading scheme, over the long haul, abnormal returns are sustained only through abnormal exposure to risk.

By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.

Gold, unlike all other commodities, is a currency...and the major thrust in the demand for gold is not for jewelry. It's not for anything other than an escape from what is perceived to be a fiat money system, paper money, that seems to be deteriorating.

Regulators have not been able to achieve the level of future clarity required to act pre-emptively. The problem is not lack of regulation but unrealistic expectations. What we confront in reality is uncertainty, some of it frighteningly so...

If I've made myself clear, I've misspoken.

Deficit spending is simply a scheme for the confiscation of wealth.

Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency, that no fiat currency, including the dollar, can match.

The arts develop skills and habits of mind that are important for workers in the new economy of ideas.

When trust is lost, a nation's ability to transact business is palpably undermined.

I don't think it's possible for the Fed to end its easy-money policies in a trouble-free manner. Recent episodes in which Fed officials hinted at a shift toward higher interest rates have unleashed significant volatility in markets, so there is no reason to suspect that the actual process of boosting rates would be any different. I think that real pressure is going to occur not by the initiation by the Federal Reserve, but by the markets themselves.

The gut-feel of the 55-year old trader is more important than the mathematical elegance of the 25-year old genius.

Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.

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. 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. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes.

The process of innovation is, of course, never ending.