The art of banking is always to balance the risk of a run with the reward of a profit. The tantalizing factor in the equation is that riskier borrowers pay higher interest rates. Ultimate safety - a strongbox full of currency - would avail the banker nothing. Maximum risk - a portfolio of loans to prospective bankrupts at usurious interest rates - would invite disaster. A good banker safely and profitably treads the middle ground.

To me the gold price takes the form of a very uncomplicated formula, and all you have to do is divide one by 'n.' And 'n', I'm glad you ask, 'n' is the world's trust in the institution of paper money and in the capacity of people like Ben Bernanke to manage it. So the smaller 'n', the bigger the price. One divided by a receding number is the definition of a bull market.

I believe that there is an important kernel of truth in the idea that financial errors recur every other generation.

Credit is money of the mind.

[C]apitalism without financial failure is not capitalism at all, but a kind of socialism for the rich.

Hope sustains life, but misplaced hope prolongs recessions.

In general, markets know more than the people who write about them.