Paul Krugman Quotes

Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes a bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill done.

The bubble, as investing phenomenon, has been well studied ever since the 17th-century tulip bulb frenzy. Its counterpart in bear markets is not well understood.

Every economic downturn suffered by this country over the past century can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial 'boom' followed by a recession or depression when the Fed-created bubble bursts.

Bulls don't read. Bears read financial history. As markets fall to bits, the bears dust off the Dutch tulip mania of 1637, the Banque Royale of 1719-20, the railway speculation of the 1840s, the great crash of 1929.

Concentrating wealth in the hands of the few and deregulating financial institutions and practices lead to speculative bubbles that eventually burst - and that brings the whole country down.

If one wants to avoid the recurrence of economic crises, one must avoid the expansion of credit that creates the boom and inevitably leads into the slump.

The Panic of 1893 was a dismal time of radiating destruction …. It was good for the bears …. the wild joy of men who shorted stocks and rejoiced in the ruin…

All that was clear that the profits to be had from smart people making complicated bets overwhelmed anything that could be had from servicing customers, or allocating capital to productive enterprise.

I've always believed that a speculative bubble need not lead to a recession, as long as interest rates are cut quickly enough to stimulate alternative investments. But I had to face the fact that speculative bubbles usually are followed by recessions. My excuse has been that this was because the policy makers moved too slowly - that central banks were typically too slow to cut interest rates in the face of a burst bubble, giving the downturn time to build up a lot of momentum.

Speculation in land may be necessary to capitalism, but speculative orgies periodically become a quagmire of destruction for capital itself.

I think margins will be destroyed for a bunch of people. If that's true, then it will be good to have alternatives to hedge against that eventuality.

I believe the only things that really matter in investing are the bubbles and the busts

I hope we will never again see such a depression. But I am troubled by the huge consumer installment debt which hangs over the people of the nation, including our own people.

I didn't think one day something would happen that would bring me back to Wall Street to write what is essentially a sequel.

If you can be sure of being right only 55 percent of the time, you can go down to Wall Street and make a million dollars a day. If you can't be sure of being right even 55 percent of the time, why should you tell other people they are wrong?

I'm not sure most of the people that get caught up in the middle of a bubble can be described as irrational. It seems pretty rational to buy a house and flip it in the next few weeks at a profit when that's been happening for along time.

One doesn't like instabilities in markets; they may be damaging, but probably not fatal, as the October '87 crash showed. It turned out to be essentially inconsequential. So if that's true, I'm not very worried about the welfare of those who are investing any more than I am about the welfare of those who go into casinos.

Republicans don't like people to talk about depressions. You can hardly blame them for that. You remember the old saying: Don't talk about rope in the house where somebody has been hanged.

You have hedge funds and people like that buying these assets to yield 15 or 20 percent, I mean, that's the buyer for these people that are trying to unload them.

Markets can remain irrational longer than you can remain solvent.

Well, as you know, we're working through a difficult period in our financial markets right now, as we work off some of the past excesses. But the American people can remain confident in the soundness and the resilience of our financial system.

Our whole Depression was brought on by gambling, not in the stock market alone but in expanding and borrowing and going in debt... all just to make some easy money quick.

What happened was that for every $100 of money, by which I mean the cash that people keep in their pockets, and the deposits they have in the bank, for every $100 of money that there was in 1929, by 1933 there was only $67. The Federal Reserve allowed the quantity of money to decline by a third. While, at all times, it had the possibilities and the power of preventing that from happening.

As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world’s problems or, for that matter, to any problems.

Gambling in the mark has been the great indoor sport of the capitalists for months, and consequently food has increased by 25 to 100 per cent.