When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.
Interpretation
Low interest rates can lead to inflated asset prices, with gold being a prime example of such a bubble.
This quote by George Soros highlights the relationship between low interest rates and the creation of asset bubbles in the market. Specifically, he points out that when interest rates are low, investors are more likely to inflate the prices of various assets, including commodities like gold, which can lead to unsustainable growth and eventual market corrections.
In practice
Discussing market trends during an economic seminar.
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.
The collapse of the global marketplace would be a traumatic event with unimaginable consequences. Yet I find it easier to imagine than the continuation of the present regime.
Regulating and taxing marijuana would simultaneously save taxpayers billions of dollars in enforcement and incarceration costs, while providing many billions of dollars in revenue annually.
We are the most powerful nation on earth. No external power, no terrorist organization can defeat us. But we can defeat ourselves by getting caught in a quagmire.
My foundations support people in the country who care about an open society. It's their work that I'm supporting. So it's not me doing it. But I can empower them. I can support them, and I can help them.
The criminalization of marijuana did not prevent marijuana from becoming the most widely used illegal substance in the United States and many other countries. But it did result in extensive costs and negative consequences.
This is not a game, ... Debt has become a part of who we are. It's become that spoiled child in the grocery store with their lip stuck out: 'I want it. I want it. I deserve it because I breathe air.' And, well, that's an uphill climb in our culture right now, to go against that and say, 'Hey, let's be grownups here. Let's be mature, learn to delay pleasure, save up and pay for things.'
The only thing useful banks have invented in 20 years is the ATM.
The research indicates that when we women invest, we women do tend to be more patient, take a longer-term perspective and as a result of it, tend to be better investors than men. But the messages we get are that investing is sort of 'the guys' world.'
Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.
I'm not emotional about investments. Investing is something where you have to be purely rational and not let emotion affect your decision making - just the facts.
This message (that attempting to beat the market is futile) can never be sold on Wall Street because it is in effect telling stock analysts to drop dead.
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