Author Archives: Notable Quotable

Notable Quotable

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“I expect that the coming decade – and possibly even the next 12 months – will be a disaster for the U.S. stock market. … Measured from current extremes, I expect that the unwinding of this bubble will drag S&P 500 total returns below Treasury bill returns for least a decade, and possibly two. Yet like other bubbles, I expect that most of the damage will come off the top, resulting in market conditions that are reasonably investable within a year or two. Presently, the valuation measures we find best correlated with actual subsequent market returns are at the most extreme levels in U.S. history. Moreover, as I’ve detailed before, the low level of interest rates does nothing to improve those prospective returns.”

John Hussman
Hussman Funds
(November 2021)

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Notable Quotable

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“I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago.”

John Maynard Keynes
1946

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Notable Quotable

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“Why own gold? Because it makes sense, within a properly diversified portfolio, to have portfolio insurance. If you own a home, it makes sense to have fire insurance. Your investments are no different. And gold is now back, more relevant than ever. Since the start of the millennium gold, as expressed across a wide variety of currencies, has generated average annualised returns of over 9%.”

Tim Price
Master Investor

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Notable Quotable

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“We need to put this [global economic inequality] alongside the financial crash, which brought home to people that a very few individuals working in the financial sector can accrue huge rewards and that the rest of us underwrite that success and pick up the bill when their greed leads us astray. So taken together we are living in a world of widening, not diminishing, financial inequality, in which many people can see not just their standard of living, but their ability to earn a living at all, disappearing. It is no wonder then that they are searching for a new deal, which Trump and Brexit might have appeared to represent.”

Stephen Hawking
Cambridge University

December, 2016

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Notable Quotable

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“They’ll print money until we run out of trees.”

Jimmy Rogers
Beeland Interests

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Notable Quotable

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“If you look at the history of currency, gold has a unique role and I don’t think it’s accidental. Some people say that if gold hadn’t been selected as a currency thousands of years ago, it would not have a role today. I don’t agree. Gold has a lot of useful properties and unique features so I don’t think its status is in any way accidental. It’s a monetary asset and I think if you replayed history another way, you would come out with gold again.”

Ken Rogoff
Harvard University

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Notable Quotable

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“Cash over the long run is the worst-performing asset class and therefore the riskiest asset class. So where do you go? To me, going to any one asset increases risk. So the best way to deal with the challenging environment I foresee is by diversifying well. . . [G]old is just an alternative currency to fiat paper currencies. If your portfolio is likely to perform poorly in the adverse environment I’ve been describing – less effective monetary policy, the need to run larger fiscal deficits and monetize them, and challenging politics – the behavior of gold as alternative cash has some diversifying merit.”

Ray Dalio
Bridgewater Associates

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Notable Quotable

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“My studies of the 17 major financial crises since the founding of the Republic reveal that over-optimism is an important driver of the bubbles that eventually become busts. As the legendary investor, Sir John Templeton, once said, ‘The four most dangerous words in investing are ‘This time is different.’ Such was the mind-set that real estate prices could only rise (2008), dot-com companies would forever grow and be profitable (2001), or that the Russian government would never default (1998). “

Robert F. Bruner,
The Hill

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Notable Quotable

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“I remember being told many years ago on a South African game reserve that the buffalo was the most dangerous of the big five game animals. In large part, this is because of the complacency shown towards them relative to the other, more obviously dangerous big five game animals (ie the lion, leopard, rhino and elephant). It’s also a fact that unlike the other big five, the buffalo gives no warning of an imminent charge (see link). It’s complacency that gets you killed, and the same goes for investors with the macro-risks. We all know what the big macro-imbalances are out there, caused by years of loose money, but investors continue to ignore them at their peril.”

Albert Edwards
Society Generale

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“Too, the crisis [in 2008], incredibly, made the biggest banks bigger. And it made the Federal Reserve, an unelected body, even more powerful and therefore more relevant. The major reform legislation, Dodd-Frank, was named after two guys bought and sold by special interests, and one of them should be shouldering a good amount of blame for the crisis. Banks were forced, by the government, to save some of the worst lenders in the housing bubble, then the government turned around and pilloried the banks for the crimes of the companies they were forced to acquire. The zero interest-rate policy broke the social contract for generations of hardworking Americans who saved for retirement, only to find their savings are not nearly enough. And the interest the Federal Reserve pays on the excess reserves of lending institutions broke the money multiplier and handcuffed lending to small and midsized enterprises, where the majority of job creation and upward mobility in wages occurs.”

 Michael Burry
Physician and famed investor
(The Big Short)

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Notable Quotable

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“Gold is real money. When fake money gets debased and inflated, gold shines. Since the beginning of this century, central banks have added some $22 trillion in new, fake money – or 15 times the value of all the gold ever mined from the time of The Flood to 2000 A.D.”

Bill Bonner
Bonner & Partners

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Notable Quotable

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“A lot of people come to me asking how they can get rich quick…It’s the most disturbing question I get. Why? It’s the wrong question. It tells me that they don’t have the foundation of financial intelligence required to use their money well if they do – somehow – become wealthy. This is because most people don’t understand that, when it comes to being rich, it’s not about how much money you make. It’s about how much money you keep.”

Robert Kiyosaki
Daily Reckoning

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Notable Quotable

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“The truth, yet unspoken from on high is that radical monetary policy begets more radical monetary policy.” – James Grant, Grant’s Interest Rate Observer

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Notable Quotable

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“The cities were still there, the houses not yet bombed and in ruins, but the victims were millions of people. They had lost their fortunes, their savings; they were dazed and inflation-shocked and did not understand how it had happened to them and who the foe was who had defeated them. Yet they had lost their self-assurance, their feeling that they themselves could be the masters of their own lives if only they worked hard enough; and lost, too, were the old values of morals, of ethics, of decency.”

Pearl S. Buck
Novelist who was in Germany during the hyperinflation in 1923

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Notable Quotable

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“Ironically, the beggar-thy-neighbor implications of competitive devaluations will almost certainly incite a response from countries who may not originally even have needed to resort to currency debasement in the first place, raising the potential for full blown currency war. How should one position for such an endgame? As is probably evident, any nominal instrument will be devalued in real terms, so the solution is to hold an asset that maintains its real value – an asset that cannot be printed.”

Rick Rieder
BlackRock Funds

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Notable Quotable

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“Deflation is a threat posed by a critical breakdown of the financial system. Slow growth and recurrent recessions without systemic financial disturbances, even the big recessions of 1975 and 1982, have not posed such a risk.  The real danger comes from encouraging or inadvertently tolerating rising inflation and its close cousin of extreme speculation and risk taking, in effect standing by while bubbles and excesses threaten financial markets. Ironically, the ‘easy money,’ striving for a ‘little inflation’ as a means of forestalling deflation, could, in the end, be what brings it about.  That is the basic lesson for monetary policy. It demands emphasis on price stability and prudent oversight of the financial system. Both of those requirements inexorably lead to the responsibilities of a central bank.”

Paul Volcker
Keeping At It: The Quest for Sound Money and Good Government
(2018)

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Notable Quotable

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“I’m adamant that even the most diehard gold bug should have some capital in the US stock market, bonds, and real estate. Even if it’s just 10% of a gold bug’s portfolio, it’s important for all investors to hedge their bets.”

Stewart Thompson
321Gold

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Notable Quotable

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“During my 20 years at the top of the chess world, from 1985 to 2005, chess-playing machines went from laughably weak to the level of the world champion. It was a startling transformation to experience firsthand, and it was impossible not to feel unsettled, even threatened, by their rapid progress. These are the same sensations that many are feeling today, as intelligent machines advance in field after field. Few people will experience the dramatic, head-to-head competition against a machine that I experienced, of course, but the sensation of being challenged, surpassed and possibly replaced by an automaton, or an invisible algorithm, is becoming a standard part of our society.”

Garry Kasparov
Russian chess master
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Notable Quotable

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“For it is, so to speak, a game of Snap, of Old Maid, of Musical Chairs — a pastime in which he is victor who says Snap neither too soon nor too late, who passed the Old Maid to his neighbour before the game is over, who secures a chair for himself when the music stops. These games can be played with zest and enjoyment, though all the players know that it is the Old Maid which is circulating, or that when the music stops some of the players will find themselves unseated.”

John Maynard Keynes

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Notable Quotable

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“I have a theory that computers started to suck when dumb people started to use them. The same is also true of precious metals, which turned into a speculative football in 2011. Those geeks are gone, and only the die-hards are left — the shiny rocks passed from weak hands to strong hands.”

Jared Dillian
NewsMax Finance

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