- debasing the currency,
- inflating,
- lower interest rates,
- printing money,
- injecting liquidity,
- creating special alphabet soup to help banks (ask Bernanke what I mean)
- unfreezing credit markets
Believing that a handful of people — however intelligent and bright should they be - could be more clever than the market itself is non-sense.
Anyway, to get back to the main point about this post — It's never different this time — I have been trying to find very old quotes reflecting perfectly what is currently happening. As you will see, everything has happened in the past, to the point where it's actually better to open an history book than read the news (even though I believe it's always better to open a book than read on the news on paper, listen to radio or TV). Here's what I currently have:
About money and debasement:
Even Keynes got some things right!
"Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some."
John Maynard Keynes
"By this means government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft."
John Maynard Keynes
“Nations are not ruined by one act of violence, but quite often, gradually, and almost imperceptibly, by the depreciation of their currency, through excessive quantity”.
Nicolas Copernicus, 1525
"We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."
Winston Churchill
"But if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit."
Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920's, speaking at the University of Texas in 1927
"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose."
John Maynard Keynes
"When you recall that one of the first moves by Lenin, Mussolini, and Hitler was to outlaw individual ownership in gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty."
Congressman Howard Buffett
Is there a conspiracy?
Napoleon Bonaparte
"You can always count on Americans to do the right thing—after they’ve tried everything else."
Winston Churchill
About paper-money
"While I live I will never resort to irredeemable paper."
Napoleon Bonaparte
"Paper money eventually returns to its intrinsic value - zero."
Voltaire, 1729
When will prices rise in result of inflation?
"Significant changes in the growth rate of money supply, even small ones, impact the financial markets first. Then, they impact changes in the real economy, usually in six to nine months, but in a range of three to 18 months."
Milton Friedman
About the Corporatocracy (aka Fascism)
"The proposal of any new law or regulation which comes from [businessmen], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."
Adam Smith
Why big Government is intrinsically Evil?
"The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance."
Cicero, 55 BC
"Government means always coercion and compulsion and is by necessity the opposite of liberty. Government is a guarantor of liberty and is compatible with liberty only if its range is adequately restricted to the preservation of economic freedom. Where there is no market economy, the best-intentioned provisions of constitutions and laws remain a dead letter."
Ludwig von Mises, Human Action
"Giving money and power to government is like giving whiskey and car keys to teenage boys."
P.J. O'Rourke
Any commonality with the US dollar in 2009?
"Until 1922 and the very brink of collapse, Germans and especially foreign investors were absorbing marks in huge quantities. Only the international reputation of the Reichsmark, the faith that an economic giant like Germany could not fail, made this possible. The storage factor caused by the investors willingness to save marks kept the marks from being dumped immediately into the markets, and thereby for a long while held prices in check. The precise moment when the inflation turned sharply upward, toward its vertical climb, was undoubtedly timed by no event, but by the dawning psychological awareness of the German and foreign investor that Germany was not going to back its money. With that, the rush to get out of the mark was on. Like a damn bursting, the seas of marks flooded into the markets and drove prices beyond all bounds. The German government strove mightily to outflood the sea. The sea of marks which had been stored up by Germans and especially by trusting foreigners flooded forth and fought to buy into other investments, foreign currencies, tangible goods, almost anything but marks."
-- Jens O. Parssons, "Dying of Money: Lessons of the Great German & American Inflations"
"We have seen security prices soar out of sight of earnings, brokers' loans swell till they absorb a third of the banking resources of the country, and the blind pools of ancient days return and multiply by endless crossing and pyramiding as the investment trusts of today. Banks merge and emerge in chains, trailing trusts and holding companies, while industrial corporations pay dividends not by producing goods but by buying each others' stocks and by borrowing and lending everybody's money in the market. But of all these things can anyone say with surety what they signify, whether they are safe and sound, or what they are leading to? We do not even know, or cannot agree, whether inflation exists, what it means, or how it shall be measured."
Business Week - September 7, 1929
"For 5 years at least, American business has been in the grip of an apocalyptic holy-rolling exaltation over the unparalleled prosperity of the 'new era' upon which we have entered."
Business Week, 1929
Intervention
"To combat depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection or production, we want to create further misdirection- a procedure which can only lead to a much more severe crisis as soon as the credit expansion comes to an end."
Fredrich Hayek, 1933
"In the stock market the more elaborate and abstruse the mathematics the more uncertain and speculative the conclusion we draw therefrom. [...] Whenever calculus is brought in, or higher algebra, you could take it as a warning signal that the operator was trying to substitute theory for experience."
Benjamin Graham
"The length and severity of depressions depend partly on the magnitude of the 'real' maladjustments, which developed during the preceding boom and partly on the aggravating monetary and credit conditions."
Gotfried Haberler, Prosperity and Depression, 1937
Do we need more credit and liquidity?
"We can’t solve problems by using the same kind of thinking we used when we created them."
Albert Einstein
"When a well-packaged web of lies has been sold gradually to the masses over generations, the truth will seem utterly preposterous and its speaker a raving lunatic."
Dresden James
"In a system...where the entire continuity of the...process rests upon credit, a crisis must obviously occur -- a tremendous rush for means of payment -- when credit suddenly ceases and only cash payments have validity. At first glance, therefore, the whole crisis seems to be merely a credit and money crisis."
Karl Marx in Capital
Why won't the Fed allow us to know who it bails out?
"...Secrecy is the keystone of all tyranny. Not force, but secrecy... censorship. When any government, or any church for that matter, undertakes to say to its subjects, 'This you may not read, this you must not see, this you are forbidden to know,' the end result is tyranny and oppression, no matter how holy the motives."
Robert A. Heinlein
"Fascism should more appropriately be called corporatism because it is the merger of state and corporate power."
Benito Mussolini
"If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie."
Joseph Goebbels
"We are on the verge of a Global transformation. All we need is the right major crisis and the nations will accept the New World Order."
David Rockefeller
"By the mid thirties there was also in existence an advanced demonstration of the Keynesian system. This was the economic policy of Adolf Hitler and the Third Reich. It involved large-scale borrowing for public expenditures, and at first this was principally for civilian works[...]"
John Kenneth Galbraith
"People will believe a big lie sooner than a little one; and if you repeat it frequently enough people will sooner or later believe it."
Adolf Hitler
Why regulation will never ever work
"In a world of businessmen and financial intermediaries who aggressively seek profit, innovators will always outpace regulators; the authorities cannot prevent changes in the structure of portfolios from occurring. What they can do is keep the asset-equity ratio of banks within bounds by setting equity-absorption ratios for various types of assets. If the authorities constrain banks and are aware of the activities of fringe banks and other financial institutions, they are in a better position to attenuate the disruptive expansionary tendencies of our economy."
Hyman Minsky, 1986
"It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world."
Thomas Jefferson
"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the [public] bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves."
President Jackson, in 1836, forced the closing of the Second Bank of the U.S. - equivalent to the current Fed - by revoking its charter for their abuses in the issuance of the nation's currency.
"... the dangers of loose fiscal policy were stated as follows: "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largess out of the public treasury."
Attributed to the French author, Alexis de Tocqueville
"I am a most unhappy man. I have unwittingly ruined my country."
President Woodrow Wilson (regretting signing into law the Federal Reserve Act)
9/11, the Patriot Act and the War on Terror
"Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety."
Benjamin Franklin, 1755
"If tyranny and oppression come to this land, it will be in the guise of fighting a foreign enemy. Of all the enemies to public liberty, war is perhaps the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. The loss of liberty at home is to be charged to the provisions against danger, real or imagined, from abroad."
James Madison
"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore, at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K."
Eddie George, Bank of England, September 1999
Disclaimer: Most of these quotes are available from this location - I haven't checked their accuracy.
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