A Quote by Benjamin Graham
Both a priori reasoning and experience teach us that as as these funds grow larger the geometrical rate of growth by compound interest ultimately defeats itself.
Related Quotes
The rate of growth of the relevant population is much greater than the rate of growth in funds, though funds have gone up very nicely. But we have been producing students at a rapid rate; they're competing for funds and therefore they're more frustrated. I think there's a certain sense of weariness in the intellectual realm, it's not in any way peculiar to economics, it's a general proposition.
It is impossible to anticipate all of the misdeeds engendered by the universal conflict of human passions. They multiply at a compound rate with the growth in population and the interlacing of particular interests that cannot be directed with geometrical precision towards the public utility.
Put God in your debt. Every stroke shall be repaid. The longer the payment is with-held, the better for you; for compound interest on compound interest is the rate and usage of this exchequer.
There is a third silent party to all our bargains. The nature and soul of things takes on itself the guaranty of the fulfillment of every contract, so that honest service cannot come to loss. If you serve an ungrateful master, serve him the more. Put God in your debt. Every stroke shall be repaid. The longer the payment is withholden, the better for you; for compound interest on compound interest is the rate and usage of this exchequer.
A higher IOER rate encourages banks to raise the interest rates they charge, putting upward pressure on market interest rates regardless of the level of reserves in the banking sector. While adjusting the IOER rate is an effective way to move market interest rates when reserves are plentiful, federal funds have generally traded below this rate.
Monetary policy is like juggling six balls... it is not 'interest rate up, interest rate down.' There is the exchange rate, there are long term yields, there are short term yields, there is credit growth.
The central banks cannot control interest rates. That's a mistake. They can control a particular rate, such as the Federal Funds rate, if they want to, but they can't control interest rates.
Mathematically, debts grow exponentially at compound interest. Banks recycle the interest into new loans, so debts grow exponentially, faster than the economy can afford to pay.
When they so-called 'target the interest rate', what they're doing is controlling the money supply via the interest rate. The interest rate is only an intermediary instrument.
Under a cold turkey strategy, at each policy meeting the Federal Open Market Committee would make its best guess about where it ultimately wants the funds rate to be and would move to that rate in a single step.
I will say this: the central banks can actually support growth beyond a point. When there is no inflation, they can cut interest rates, and that is the way they support growth, but if you cut interest rate to the bone, there is nothing more to cut. It is very hard to support growth beyond that.
The more we progress the more we tend to progress. We advance not in arithmetical but in geometrical progression. We draw compound interest on the whole capital of knowledge and virtue which has been accumulated since the dawning of time.
What central banks can control is a base and one way they can control the base is via manipulating a particular interest rate, such as a Federal Funds rate, the overnight rate at which banks lend to one another. But they use that control to control what happens to the quantity of money. There is no disagreement.
It was shameful that, after Haiti, Colombia was the second most unequal country in Latin America. But we've achieved some things; the inequality is coming down, and coming down fast. The growing economy has provided us with the funds to finance a very progressive social policy that has reduced extreme poverty. We have the lowest inflation rate of all Latin-America countries and the highest growth rate.
Democracy turns upon and devours itself. Universal suffrage, in theory the palladium of our liberties, becomes the assurance of our slavery. And that slavery will grow more and more abject and ignoble as the differential birth rate, the deliberate encouragement of mendicancy and the failure of popular education produce a larger and larger mass of prehensile half-wits, and so make the demagogues more and more secure.
Good and evil both increase at compound interest.
Related Authors
Adam Smith Quotes
Scottish
Economist
Alan Greenspan Quotes
American
Economist
Friedrich August von Hayek Quotes
Austrian
Economist
John Kenneth Galbraith Quotes
American
Economist
John Maynard Keynes Quotes
English
Economist
Joseph Stiglitz Quotes
American
Economist
Ludwig von Mises Quotes
Austrian
Economist
Milton Friedman Quotes
American
Economist
Muhammad Yunus Quotes
Bangladeshi
Economist
Murray Rothbard Quotes
American
Economist
Paul Craig Roberts Quotes
American
Economist
Paul Krugman Quotes
American
Economist
Richard Thaler Quotes
American
Economist
Robert Reich Quotes
American
Economist
Thomas Sowell Quotes
American
Economist
Walter E. Williams Quotes
American
Economist