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
Who was in Germany during the hyperinflation in 1923

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Notable Quotable

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“John Locke, the British philosopher whose ideas fuelled the American Revolution, had a theory of knowledge and perception, which I always found annoying. Asked if we have an idea of the substance behind our perceptions, he said we had ‘no such clear idea at all, and therefore signify nothing by the word substance but only an uncertain supposition of we know not what’. The philosophical debate has moved on in the centuries since Locke wrote. But his idea captures well the uneasy state of the world’s financial markets. They are driven in the short run by perceptions, not reality. If many have the wrong impression, markets will move on that. But in the long run, markets move on matters of substance. And at present the economic substance is a ‘something we know not what.'”

John Authers
Bloomberg

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Notable Quotable

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“I’ve been saying for years that central banks can never step away from this. They can threaten to. And they can bluff, and they can do some probing bets like they did last year, and the market may fall for that, or call that bluff in the short term. But yes I think we’re in a position now where central banks can never back away, which sort of begs the question how can this ever end. Can asset markets get inflated forever?”

Mark Spitznagel
Universa
Bloomberg interview

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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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“Perhaps we slow investors should adopt a mascot. I suggest the sloth. Hanging upside-down, moving at a few metres a minute, is much like trading infrequently: it saves the costs of doing things more quickly. Sloths take almost two months fully to digest each meal — which is handy, given that they eat mildly toxic leaves that would poison them if absorbed too quickly. Investors are reminded, all too often, that the financial world is lush with toxic get-rich quick products. A slower approach to finance makes market movements a great deal more digestible.”

Tim Hartford
Financial Times/The Undercover Economist

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Notable Quotable

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“I’m no insect. Gold is a great way to make a lot of money.”

Thomas Kaplan
Electrum Group

October 2019

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Notable Quotable

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“I don’t buy gold, I own it. I don’t buy gold at $1,100 because I think it’s going to go to $1,200. I buy it for what it does, not what the price is, the price is the last consideration for me. I think the way the picture has been developing over the last eight years, it’s like when you take a polaroid, you take a picture and you sit there and you watch this thing and it slowly comes into focus, and that’s what it’s been like for me watching gold, we’re watching this picture slowly develop. We’re getting to the point where people are going to be able to see the picture, and at that point gold is the answer. It’s not just an asset anymore. It’s the answer to a lot of people’s questions. . .The picture is becoming clearer, and everything the central banks are doing is bringing that day forward a little bit.”

Grant Williams
Vulpes Investment Management
June 2016

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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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“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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“The current combination of monetary debasement, populism and social unrest is neither a new phenomenon nor a coincidence. The late Roman empire shaved silver coins as it disintegrated; Henry VIII replaced silver coins with copper to pay for wars against France and Scotland; the British empire allowed double-digit inflation to erode bondholders’ wealth following the War of Independence; the Weimar Republic precipitated an inflation spiral. Comparing these examples to QE may sound extreme. Yet the biggest debasement in history may be the one we are experiencing now under the form of a $20tn central bank experiment, which is de facto depreciating money by boosting the price of all assets it can buy.”

Alberto Gallo
Algebris Investments

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Notable Quotable

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“‘Experience keeps a dear school,’ said Ben Franklin, ‘but fools will learn in no other.’ The wise man remembers. The fool forgets. The wise man listens. The fool talks. He ignores both the living and the dead… the immemorial dead, whose whispers carry the distilled wisdom of history. No – this time is different, comes the fool’s eternal cry. The past is of no use to me.”

Brian Maher
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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“Gold can be best viewed as financial insurance. If you believe that you should own insurance, then you should also own gold. In terms of investment performance, gold will do best during times of international financial stress. In the past, the price of gold has moved exponentially higher during these periods as demand for the ultimate safe haven goes viral.”

Eric Lytikainen
Real Investment Advice

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Notable Quotable

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“In a lot of cultures, the word for money derives from the word for gold. In China, the ideogram for money is the ideogram for gold.”

Peter Oakley
Royal College of Arts (UK)

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“When you think of the color gold, images of grandeur and extravagance are likely to come to mind. For millennia, the metal has adorned crowns and hilts of swords. It has been used to enhance paintings and ornaments to increase their value. In some cultures, gold is a predominant feature of festivals and celebrations. In Eastern cultures, the metal is an integral part of auspicious occasions like marriages and festivals by way of gifts and sacred rituals. Gold also features heavily on the attires of brides and grooms throughout South Asia. Humans’ fascination with gold is as old as time itself. The scarce material has a certain appeal to it. Empires have flourished by possessing gold, wars have been fought to control regions harboring rich deposits of the metal and treasure hunters and explorers have spent a lifetime in search of it.”

Puja Bhattacharjee
Independent Journalist

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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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“For we have reached a critical point. In a sense, it is true that the mists are lifting. We can, at least, see clearly the gulf to which our present path is leading. Few of us doubt that we must, without much more delay, find an effective means to raise world prices; or we must expect the progressive breakdown of the existing structure of contract and instruments of indebtedness, accompanied by the utter discredit of orthodox leadership in finance and government, with what outcome we cannot predict.”

John Maynard Keynes
The Means to Prosperity (1933)

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Notable Quotable

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“[T]he object of speculation may vary widely from one mania or bubble to the next. It may involve primary products, especially those imported from afar (where the exact conditions of supply and demand are not known in detail), or goods manufactured for export to distant markets, domestic and foreign securities of various kinds, contracts to buy or sell goods or securities, land in the country or city, houses, office buildings, shopping centers, condominiums, foreign exchange. At a late stage, speculation tends to detach itself from really valuable objects and turn to delusive ones. A larger and larger group of people seeks to become rich without a real understanding of the processes involved. Not surprisingly, swindlers and catchpenny schemes flourish.”

Robert Z. Aliber and Charles P. Kindleberger
Manias, Panics and CrashesAnatomy of a Typical Financial Crisis (2001)

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Notable Quotable

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“The ancient Egyptians believed their gods had shimmering skin made from gold. While the Aztec word for gold, teocuitlatl, literally translates as ‘excrement of the gods’. From ancient Rome to the California gold rush, this dense shimmering metal has been immutably connected with divine quality and the sense of opportunity. The reason for this is simple: gold is the most special element of them all.”

James Dacey
Physics World

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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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