The End of Alchemy Quotes

“The lesson is that no amount of sophisticated statistical analysis is a match for the historical experience that ‘stuff happens’.”
― Mervyn King, The End of Alchemy: Money, Banking, and the Future of the Global Economy

“Confucius emphasised the crucial role of trust in the authorities: ‘Three things are necessary for government: weapons, food and trust. If a ruler cannot hold on to all three, he should give up weapons first and food next. Trust should be guarded to the end: without trust we cannot stand.’5 Those”
― Mervyn King, The End of Alchemy: Money, Banking, and the Future of the Global Economy

“Failure to understand the context in which correlations are observed leads to false conclusions. The”
― Mervyn King, The End of Alchemy: Money, Banking and the Future of the Global Economy

“the imposition of a negative real interest rate – effectively a wealth tax – on all forms of financial wealth expropriates the incomes of savers and might alter expectations of future effective rates of wealth taxes. If you are told, for example, that all your assets held in accounts fixed in money terms will be subject to a 5-percentage-point wealth tax, you might, it is true, decide to spend today, but you might well, fearful of what the government could do next year, batten down the hatches and cut spending. Households and businesses might simply conserve their resources to cope with an unpredictable and unknowable future. The”
― Mervyn King, The End of Alchemy: Money, Banking, and the Future of the Global Economy

“Keynes argued that when short-term and long-term interest rates had reached their respective lower bounds, further increases in the money supply would just be absorbed by the hoarding of money and would not lead to lower interest rates and higher spending. Once caught in this liquidity trap, the economy could persist in a depressed state indefinitely. Since economies were likely to find themselves in such conditions only infrequently, Hicks described Keynes’s theory as special rather than general, and relevant only to depression conditions. And this has remained the textbook interpretation of Keynes ever since. Its main implication is that in a liquidity trap monetary policy is impotent, whereas fiscal policy is powerful because additional government expenditure is quickly translated into higher output.”
― Mervyn King, The End of Alchemy: Money, Banking, and the Future of the Global Economy

“The second, and related, question was why would an increase in money supply not stimulate spending, returning the economy to full employment? Keynes’s reply was that in a slump the demand for liquidity – emergency money – was so high that further injections of money would simply be absorbed in idle cash balances as a claim on generalised future purchasing power without any impact on current spending. The economy would be stuck in a ‘liquidity trap’. The argument was set out in Chapters 13 and 14 of The General Theory. They are among the more difficult and obscure parts of the book. It”
― Mervyn King, The End of Alchemy: Money, Banking, and the Future of the Global Economy

“predict. I have said in another context that it is a disadvantage of ‘the long run’ that in the long run we are all dead. But I could have said equally well that it is a great advantage of ‘the short run’ that in the short run we are all alive. Life and history are made up of short runs. If we are at peace in the short run that is something. The best we can do is put off disaster, if only in the hope, which is not necessarily a remote one, that something will turn up.29”
― Mervyn King, The End of Alchemy: Money, Banking and the Future of the Global Economy

“one of the arguments of this book is that economics has encouraged ways of thinking that made crises more probable. Economists have brought the problem upon themselves by pretending that they can forecast. No”
― Mervyn King, The End of Alchemy: Money, Banking and the Future of the Global Economy

“After the end of the Napoleonic Wars, Britain experienced a period of prosperity and the banks were sufficiently carried away that they invested in widely speculative ventures in Latin America, including the country of Poyais that turned out not to exist.”
― Mervyn King, The End of Alchemy: Money, Banking and the Future of the Global Economy

“stigma”
― Mervyn King, The End of Alchemy: Money, Banking and the Future of the Global Economy

“interminable”
― Mervyn King, The End of Alchemy: Money, Banking and the Future of the Global Economy