Alan Greenspan Quotes & Sayings

I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said. — Alan Greenspan

People don't realize that we cannot forecast the future. What we can do is have probabilities of what causes what, but that's as far as we go. And I've 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. — Alan Greenspan

A decline in the national housing price level would need to be substantial to trigger a significant rise in foreclosures, because the vast majority of homeowners have built up substantial equity in their homes despite large mortgage-market financed withdrawals of home equity in recent years. — Alan Greenspan

Forecasting our futures is built into our psyches because we will soon have to manage that future. We have no choice. No matter how often we fail, we can never stop trying. — Alan Greenspan

There are no easy choices. Easy choices are long gone. — Alan Greenspan

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

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

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

I'm a free-market economist from years and years back, and I've never veered from that. — Alan Greenspan

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

The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting more skilled immigrants, who tend to earn enough to buy homes, would accomplish that while paying other dividends to the U.S. economy. — Alan Greenspan

If I've made myself clear, I've misspoken. — Alan Greenspan

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

At the outset of the creation of the euro in 1999, it was expected that the southern eurozone economies would behave like those in the north; the Italians would behave like Germans. They didn't. Instead, northern Europe fell into subsidizing southern Europe's excess consumption, that is, its current account deficits. — Alan Greenspan

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

The guiding purpose of the government regulator is to prevent rather than to create something. — Alan Greenspan

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. — Alan Greenspan

[Republicans] swapped principle for power. They ended up with neither. They deserved to lose. — Alan Greenspan

There are errors in this book. I do not know where they are. If I did they wouldn't be there. But with close to two hundred thousand words my probabilistic mind tells me some are wrong. — Alan Greenspan

Finance is wholly different from the rest the economy. — Alan Greenspan

We need, in effect, to make the phantom 'lock-boxes' around the trust fund real. — Alan Greenspan

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. — Alan Greenspan

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 ... — Alan Greenspan

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. — Alan Greenspan

The need for values is inbred. Their content is not. — Alan Greenspan

I've always argued that this country has benefited immensely from the fact that we draw people from all over the world. — Alan Greenspan

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. — Alan Greenspan

Crony capitalism is essentially a condition in which ... public officials are giving favours to people in the private sector in payment of political favours. — Alan Greenspan

Cash is available and we should use that in larger amounts, as is necessary, to solve the problems of the stress of this. — Alan Greenspan

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. — Alan Greenspan

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

The recent period has been marked by a transformation to an economy that is more productive as competitive forces become increasingly intense and new technologies raise the efficiency of our businesses ... While these tendencies were no doubt in train in the "old," pre-1990s economy, they accelerated over the past decade as a number of technologies with their roots in the cumulative innovations of the past half-century began to yield dramatic economic returns. — Alan Greenspan

I always believed in animal spirits. It's not their existence that is new. It's the fact that they are not random events, but actually replicate in-bred qualities of human nature which create those animal spirits. — Alan Greenspan

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

Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. 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

I've always considered myself more of a mathematician than a psychologist. — Alan Greenspan

But rules cannot substitute for character. — Alan Greenspan

One of the major problems with China is that its innovation is largely borrowed technology. — Alan Greenspan

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

There is a huge number of people outside our borders who would love to come here. In fact, many of them come here, get well educated, and then are required to leave ... This is a factor in income inequality. — Alan Greenspan

I have long argued that paying down the national debt is beneficial for the economy: it keeps interest rates lower than they otherwise would be and frees savings to finance increases in the capital stock, thereby boosting productivity and real incomes. — Alan Greenspan

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense ... that gold and economic freedom are inseparable. — Alan Greenspan

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. — Alan Greenspan

Credit-default swaps, I think, have serious problems associated with them. — Alan Greenspan

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. — Alan Greenspan

Our market system depends critically on trust-trust in the word of our colleagues and trust in the word of those with whom we do business. — Alan Greenspan

Fear is a far more dominant force in human behaviour than euphoria - I would never have expected that or given it a moment's thought before, but it shows up in the data in so many ways. — Alan Greenspan

As long as we issue fiat currency, I see no alternative to a legal tender law. — Alan Greenspan

I cannot conceive of a politically feasible solution to this problem which will overdo cutting the deficit, where overdoing means harming the economy. It might be technically possible, but it is not realistic. — Alan Greenspan

Much fiscal policy is implemented, not through spending increases, but through tax credits and other so-called tax expenditures. The markets should respond to them as they do spending cuts, with little contraction in economic activity. — Alan Greenspan

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. — Alan Greenspan

We cannot rule out a situation in which a preemptive policy tightening becomes necessary, ... Such caution seems especially warranted with regard to the sharp rise in equity prices during the past two years. These gains have obviously raised questions of sustainability. — Alan Greenspan

The only way you get economic progress, real standards of living moving higher, is to have the savings of the society continuously invested in the cutting-edge technologies. And those technologies which are obsolescent get dropped out. — Alan Greenspan

The problem is you cannot have free global trade with highly restrictive, regulated domestic markets. — Alan Greenspan

We really can't forecast all that well, and yet we pretend that we can, but we really can't. — Alan Greenspan

It's hard to overemphasize how important Ford's deregulation was. True, most of the benefits took years to unfold-rail freight rates, for example hardly budged at first. Yet deregulation set the stage for an enormous wave of creative destruction in the 1980s: ... — Alan Greenspan

Look, I'm very much in favor of tax cuts, but not with borrowed money. And the problem that we've gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day that proves disastrous. And my view is I don't think we can play subtle policy here. — Alan Greenspan

You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven't been able to do it. Maybe somebody else can. — Alan Greenspan

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. Many of those who purchased their residence more than a year ago have equity buffers in their homes adequate to withstand any price decline other than a very deep one. — Alan Greenspan

I'm not denying that monopolies are terrible things, but I am denying that it is readily easy to resolve them through legislation of that nature. — Alan Greenspan

Productivity is notoriously difficult to predict. — Alan Greenspan

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

I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant — Alan Greenspan

The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions ... Derivatives have permitted the unbundling of financial risks. — Alan Greenspan

I have found no greater satisfaction than achieving success through honest dealing and strict adherence to the view that, for you to gain, those you deal with should gain as well. — Alan Greenspan

Protectionism will do little to create jobs and if foreigners retaliate, we will surely lose jobs. — Alan Greenspan

There are winners and there are losers. And as much as we would like to help the losers, if we do it in the way that directs the limited capital of the society to support the low-productivity parts of the economy, it means that the rest of the economy - our overall standard of living - will not rise as much as it could. — Alan Greenspan

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

The Iraq War is largely about oil. — Alan Greenspan

Under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth ... 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 — Alan Greenspan

Improvements in lending practices driven by information technology have enabled lenders to reach out to households with previously unrecognized borrowing capacities. — Alan Greenspan

There is no evidence that the business cycle has been repealed. — Alan Greenspan

If you get beyond the political rhetoric [and assembled a group to solve Social Security] it would take them 15 minutes. It would take them 15 minutes only because 10 minutes was used for pleasantries. — Alan Greenspan

We ought to be opening up our borders to skilled labour from all parts of the world because [the state of the world is as follows: ] if we were to do that we would increase the supply of skilled workers that our schools have been unable to create and as a consequence of that we would lower the average wage of skills and reduce the degree of income inequality in this country. — Alan Greenspan

Without calling the overall national issue a bubble, it's pretty clear that it's an unsustainable underlying pattern. — Alan Greenspan

I was a good amateur but only an average professional. I soon realized that there was a limit to how far I could rise in the music business, so I left the band and enrolled at New York University. — Alan Greenspan

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

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

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

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

The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake. — Alan Greenspan

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. — Alan Greenspan

Regulation - which is based on force and fear - undermines the moral base of business dealings. It becomes cheaper to bribe a building inspector than to meet his standards of construction. Protection of the consumer by regulation is thus illusory. — Alan Greenspan

We may be in a rapidly evolving international financial system with all the bells and whistles of the so-called new economy. But the old-economy rules of prudence are as formidable as ever. We violate them at our own peril. — Alan Greenspan

American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. — Alan Greenspan

I must say, I never expected to see the day where I would be talking about anything other than reducing the debt, I'm running into the tyranny of zero, which is where you can't reduce (the debt) any more — Alan Greenspan

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

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. — Alan Greenspan

History demonstrates that participants in financial markets are susceptible to waves of optimism. Excessive optimism shows the seeds of its own reversal in the form of imbalances that tend to grow over time. — Alan Greenspan

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. — Alan Greenspan

The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default. — Alan Greenspan

There is a limit to how much the United States Treasury can borrow. — Alan Greenspan

If I say something which you understand fully in this regard, I probably made a mistake. — Alan Greenspan

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. — Alan Greenspan

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. — Alan Greenspan

I have one other issue I'd like to throw on the table. I hesitate to do it, but let me tell you some of the issues that are involved here. If we are dealing with psychology, then the thermometers one uses to measure it have an effect. I was raising the question on the side with Governor Mullins of what would happen if the Treasury sold a little gold in this market. 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

Any informed borrower is simply less vulnerable to fraud and abuse. — Alan Greenspan

If prices go down, we will have problems - problems in the sense of spillover to other areas, Greenspan said. While he hasn't seen such spreading yet, I expect to. — Alan Greenspan

It seems superfluous to constrain trading in some of the newer derivatives and other innovative financial contracts of the past decade. The worst have failed; investors no longer fund them and are not likely to in the future. — Alan Greenspan

If we are to remain preeminent in transforming knowledge into economic value, America's system of higher education must remain the world's leader in generating scientific and technological breakthrough, and in meeting the challenge to educate workers. — Alan Greenspan