When I hear complaints about less liquidity, remember there is such a thing as too much liquidity.
Interpretation
Excess liquidity can lead to economic problems, just as too little can.
Paul Volcker's quote highlights the importance of balance in the financial system, warning that while liquidity is necessary for economic activity, having too much of it can create risks such as inflation or asset bubbles. This statement serves as a reminder to policymakers and investors that moderation is key to maintaining economic stability.
In practice
In a financial conference discussing economic policies, one might use this quote to emphasize the need for careful regulation.
It is a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation, not less. [I]f the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with 'free banking.' The truly unique power of a central bank, after all, is the power to create money, and ultimately the power to create is the power to destroy.
The only thing useful banks have invented in 20 years is the ATM.
What's the subject of life - to get rich? All of those fellows out there getting rich could be dancing around the real subject of life.
The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed they were reducing risks through geographic diversification: in fact they were increasing them by creating an agency problem. The agents were more interested in maximising fee income than in protecting the interests of bondholders. That is the verity that was ignored by regulators and market participants alike.
Mutual funds with superior performance records often falter.
It is vital for officials and regulators to have input from people within our businesses who understand the intricacies of how financial markets operate and the consequences of certain policy decisions.
Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative.
I do not understand where the backing of Bitcoin is coming from. There is no fundamental issue of capabilities of repaying it in anything which is universally acceptable, which is either intrinsic value of the currency or the credit or trust of the individual who is issuing the money, whether it's a government or an individual.
Don’t ever average losers. Decrease your trading volume when you are trading poorly; increase your volume when you are trading well. Never trade in situations where you don’t have control. For example, I don’t risk significant amounts of money in front of key reports, since that is gambling, not trading.
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