A Quote by Maurice Allais

It is understandable that the Fed injects cash to avoid the collapse of the stock market, but basically it is bad policy for monetary authorities to intervene to save speculators from bankruptcy. This is not their role.

Maurice Allais

Quote Topics

Authorities Avoid Bad Bankruptcy Basically Cash Collapse Fed Intervene Market Monetary Policy Role Save Speculators Stock Stock Market Understandable

Quote Author

Maurice Allais
French - Economist
May 31, 1911 - October 9, 2010

Monetary conditions exert an enormous influence on stock prices. Indeed, the monetary climate - primarily the trend in interest rates and Federal Reserve policy - is the dominant factor in determining the stock market's major direction.

Martin Zweig

The underlying strategy of the Fed is to tell people, "Do you want your money to lose value in the bank, or do you want to put it in the stock market?" They're trying to push money into the stock market, into hedge funds, to temporarily bid up prices. Then, all of a sudden, the Fed can raise interest rates, let the stock market prices collapse and the people will lose even more in the stock market than they would have by the negative interest rates in the bank. So it's a pro-Wall Street financial engineering gimmick.

Michael Hudson

The Great Depression was not a sign of the failure of monetary policy or a result of the failure of the market system as was widely interpreted. It was instead a consequence of a very serious government failure, in particular a failure in the monetary authorities to do what they'd initially been set up to do.

Milton Friedman

If a lot of money goes into the stock market, it'll push up prices, making money for stock speculators. Then the insiders can decide that it's time to sell out, and the market will plunge.

Michael Hudson

Speculators are obsessed with predicting: guessing the direction of stock prices. Every morning on cable television, every afternoon on the stock market report, every weekend in Barron's, every week in dozens of market newsletters, and whenever business people get together. In reality, no one knows what the market will do; trying to predict it is a waste of time, and investing based upon that prediction is a purely speculative undertaking.

Seth Klarman

The phrase 'perception is reality' is overused generally. But perception can be reality in monetary policy. The bond market doesn't act merely on what it sees. It acts on what it expects of the Fed or the government.

Amity Shlaes

The presently existing global financial and monetary system will disintegrate during the near term. The collapse might occur this spring, or summer, or next autumn; it could come next year; it will almost certainly occur during President William Clinton's first term in office; it will occur soon. That collapse into disintegration is inevitable, because it could not be stopped now by anything but the politically improbable decision by leading governments to put the relevant financial and monetary institutions into bankruptcy reorganization.

Lyndon LaRouche

There's no automatic mechanism in a market system that reconciles the desire to save and the desire to invest. And therefore, the government has to sort of do something or the Federal Reserve, the Fed, or the Central Bank, or whatever, it has to intervene. It has to create enough investment for the economy not to suffer from a fall in aggregate demand. So, if you don't have a balance within the market system itself, then you need an external balance and that's what I think Keynes believed.

Robert Skidelsky, Baron Skidelsky

Audit the Fed is a bill that would politicize monetary policy, would bring short-term political pressures to bear on the Fed. In terms of openness about our financial accounts, we are extensively audited.

Janet Yellen

Hey, guess what? Turns out the free market? Not so free. Wall Street was hit hard Monday when Lehman Brothers filed for bankruptcy, Merrill Lynch was sold to Bank of America, and insurance giant AIG neared a collapse of its own. Basically, if your commercials air during golf tournaments, you're done.

Amy Poehler

There is a bit of a problem with the match between derivative securities markets and the primary markets. We have long ago instituted principles, essentially high margin requirements, to prevent certain instabilities in the stock market, and I think they're basically correct. The trouble is that there's a linkage, let's say, between something like the stock market and the index futures markets, and the fact that the margin requirements are very different, for example, played some role in the October '87 crash.

Kenneth Arrow

Beyond monetary policy, fiscal policy has traditionally played an important role in dealing with severe economic downturns.

Janet Yellen

You never cash out a 401(k) or IRA to pay off debt, unless it's to avoid a foreclosure or bankruptcy.

Dave Ramsey

Inflation is certainly low and stable and, measured in unemployment and labour-market slack, the economy has made a lot of progress. The pace of growth is disappointingly slow, mostly because productivity growth has been very slow, which is not really something amenable to monetary policy. It comes from changes in technology, changes in worker skills and a variety of other things, but not monetary policy, in particular.