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 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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“Why does the cycle move as it does? What causes these periodic alternations, this ebb and this flow, in the national priorities? If it is a genuine cycle, the explanation must be primarily internal. Each phase must flow out of the conditions – and contradictions – of the phase before and then itself prepare the way for the next recurrence. A true cycle is self-generating. It cannot be determined, short of catastrophe, by external events. Wars, depressions, inflations may heighten or complicate moods, but the cycle itself rolls on, self-contained, self-sufficient and autonomous. . .The roots of cyclical self sufficiency lies deep in the natural life of humanity. There is a cyclical pattern in organic nature — in the tides, in the seasons, in night and day, in the systole and diastole of the human heart.”

Arthur M. Schlesinger, Jr.
The Cycles of American History

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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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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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“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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“. . .[I]f you go down the line of currencies around the world, you don’t find many attractive opportunities. And that’s why I say if the world were to give up on dollars and give up on euros, they’d probably go back to the old standby, which is gold. And I don’t mean by gold, government run gold standard, like we had in the late 19th century. That’s politically impossible. Governments will never be willing to subordinate their policies to the constraints of a hard commodity ever again… So how could gold make a revival as a sort of international money? Well, we don’t actually need a government run gold standard anymore…since people have always had confidence in gold as a long-term store of value, there’s no reason why it couldn’t play that role.”

Benn Steil
Director of International Economics
Council on Foreign Relations

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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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“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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Notable Quotable

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“We live in a technological golden age but in a monetary and fiscal dark age. While physicists discover the so-called God particle, governments print and borrow by the trillions. Science and technology may hurtle forward, but money and banking race backward.”

James Grant
Grant’s Interest Rate Observer

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Notable Quotable

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“I don’t believe life is going back to normal once we get to the end of the tunnel. There hasn’t been enough thought given on how behavior has been fundamentally altered from this past year of social distancing, travel restrictions and other curbs to movement, working from home.” (2/21/2021)

David Rosenberg
Rosenberg Research
themarketNZZ interview
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Notable Quotable

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“[C]learly going back to before even history human beings have been in love with gold. It just has something very particular about it, that copper or platinum or silver do not have. I feel that the gold price should bottom at about $1600 or thereabouts and it would be fine to start buying some. The reason being that the central banks of the world are still going to keep policies loose and governments in the western world are starting to engage in a lot of fiscal stimulus. Gold is a mysterious metal but it is in buy territory now.”

Mark Matthews
Julius Baer

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Notable Quotable

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“The logic that Modern Monetary Theory, for example, with its academic aura and blissful projections of deficits without tears (and money creation sansinflation) has slowly left the fringe of economics and entered its forefront as a sound, indeed ‘logical’ new path forward. Equally, ‘logical’ are the titles given to such popular policies as ‘Yield Curve Control’ or ‘Quantitative Easing,’ which, as many of us already understand, are just clever, even logically titled concepts masking the far more pernicious reality of extreme debt expansion supported by extreme money creation which leads logically to extreme currency debasement.”

Matthew Piepenberg
Gold Switzerland

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Notable Quotable

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“For a variety of reasons it is likely that central banks that hold gold will tend to husband their reserves and that some with low levels of reserves will acquire more. Gold goes where the money is. After moving from the colonial world to Europe, to the United States, back to Europe it is now moving to the emerging economies of Asia. This is consistent with the view that central bank’s gold position signals economic power and prestige.”

James Steel
Hong Kong Shanghai Bank Corporation

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