Even though some down payments are borrowed, it would take a large, and historically most unusual, fall in home prices to wipe out a significant part of home equity. Many of those who purchased their residence more than a year ago have equity buffers in their homes adequate to withstand any price decline other than a very deep one.
Alan GreenspanYou can't have the capitalist system if an increasing number of people think it is unjust.
Alan GreenspanI believe that the general growth in large [financial] institutions have occurred in the context of an underlying structure of markets in which many of the larger risks are dramatically -- I should say, fully -- hedged.
Alan GreenspanCash is available and we should use that in larger amounts, as is necessary, to solve the problems of the stress of this.
Alan GreenspanIn the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.
Alan GreenspanHistory has not dealt kindly with the aftermath of protracted periods of low risk premiums.
Alan Greenspan[Republicans] swapped principle for power. They ended up with neither. They deserved to lose.
Alan GreenspanWe are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures. Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity are in a state of shocked disbelief.
Alan GreenspanAn almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense... that gold and economic freedom are inseparable.
Alan GreenspanDeficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.
Alan GreenspanIf we allow terrorism to undermine our freedom of action, we could reverse at least part of the palpable gains achieved by postwar globalization. It is incumbent upon us not to allow that to happen.
Alan GreenspanNo matter how skillful the trading scheme, over the long haul, abnormal returns are sustained only through abnormal exposure to risk.
Alan GreenspanProtectionism will do little to create jobs and if foreigners retaliate, we will surely lose jobs.
Alan GreenspanThe abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.
Alan GreenspanDeveloping protectionism regarding trade and our reluctance to place fiscal policy on a more sustainable path are threatening what may well be our most valued policy asset: the increased flexibility of our economy, which has fostered our extraordinary resilience to shocks.
Alan GreenspanAny onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices, ... This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums.
Alan GreenspanIt is decidedly not true that "nice guys finish last," as that highly original American baseball philosopher, Leo Durocher, was alleged to have said.
Alan GreenspanWithout the triggers, that tax cut is irreponsible fiscal policy. Eventually, I think that will be the consensus view.
Alan GreenspanI cannot conceive of a politically feasible solution to this problem which will overdo cutting the deficit, where overdoing means harming the economy. It might be technically possible, but it is not realistic.
Alan GreenspanRemember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency, that no fiat currency, including the dollar, can match.
Alan GreenspanSkilled shortages in America exist because we are shielding our skilled labor force from world competition. [Visa quotas] have been substituted for the wage pricing mechanism. In the process we have created [a] privileged elite whose incomes are being supported at non-competitively high levels by immigration quotas on skilled professionals. Eliminating such restrictions would reduce at least some of the income inequality.
Alan GreenspanI've always argued that this country has benefited immensely from the fact that we draw people from all over the world.
Alan GreenspanThe current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War.
Alan GreenspanThe number one problem in today's generation and economy is the lack of financial literacy.
Alan GreenspanWe as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs and price stability.
Alan GreenspanRegulation of derivatives transactions that are privately negotiated by professionals is unnecessary.
Alan GreenspanAnyone willing to do what is required to become president of the United States is thereby barred from taking that office. I'm only half joking
Alan GreenspanAnything that we can do to raise personal savings is very much in the interest of this country.
Alan GreenspanI was a fairly good amateur musician, and I was an average professional. But the one thing I saw was that the big band business was fading.
Alan GreenspanGiven our inevitably incomplete knowledge about key structural aspects of our ever-changing economy and the sometimes asymmetric costs or benefits of particular outcomes, a central bank... need to consider not only the most likely future path for the economy but also the distribution of possible outcomes about that path. They then need to reach a judgment about the probabilities, costs, and benefits of the various possible outcomes under alternative choices for policy.
Alan GreenspanThe United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.
Alan GreenspanRegulators have not been able to achieve the level of future clarity required to act pre-emptively. The problem is not lack of regulation but unrealistic expectations. What we confront in reality is uncertainty, some of it frighteningly so...
Alan GreenspanIf all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it.
Alan GreenspanA decline in the national housing price level would need to be substantial to trigger a significant rise in foreclosures, because the vast majority of homeowners have built up substantial equity in their homes despite large mortgage-market financed withdrawals of home equity in recent years.
Alan GreenspanIf we are to remain preeminent in transforming knowledge into economic value, America's system of higher education must remain the world's leader in generating scientific and technological breakthrough, and in meeting the challenge to educate workers.
Alan GreenspanSenator, we are groping for understanding, the knowledge you assume I possess doesn't exist' - 'The only effective regulation lies in the propensity of customers to choose alternatives, of investors to move their funds elsewhere and of labour to acquire technical skills' - 'Senator, if I seem clear to you, you must have misunderstood me' - 'Unfortunately, Senator, nobody knows where the next innovative idea is coming from. Political decisions are never random and will always lose out to innovative alternatives
Alan GreenspanGold, unlike all other commodities, is a currency...and the major thrust in the demand for gold is not for jewelry. It's not for anything other than an escape from what is perceived to be a fiat money system, paper money, that seems to be deteriorating.
Alan GreenspanThis decade is strewn with examples of bright people who thought they built a better mousetrap that could consistently extract abnormal returns from the financial markets. Some succeed for a time. But while there may occasionally be mis-configurations among market prices that allow abnormal returns, they do not persist.
Alan Greenspan