George Soros Quotes - Page 4

My conceptual framework, which basically emphasizes the importance of misconceptions, makes me extremely critical of my own decisions. I know that I am bound to be wrong, and therefore am more likely to correct my own mistakes.

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.

When you sell options, you get paid for assuming risk. That can be a profitable business, but it does not mix well with the risks inherent in a leveraged portfolio.

No individual anonymous participant can influence the prices and therefore you really can speculate in the market without paying attention to morality. That's one of the positive features of markets. That's why they function.

The only thing that could hurt me is if my success encouraged me to return to my childhood fantasies of omnipotence - but that is not likely to happen as long as I remain engaged in the financial markets, because they constantly remind me of my limitations.

Financial markets are supposed to swing like a pendulum: They may fluctuate wildly in response to exogenous shocks, but eventually they are supposed to come to rest at an equilibrium point and that point is supposed to be the same irrespective of the interim fluctuations. Instead, as I told Congress, financial markets behaved more like a wrecking ball, swinging from country to country and knocking over the weaker ones. It is difficult to escape the conclusion that the international financial system itself constituted the main ingredient in the meltdown process.

I am not well qualified to criticize the theory of rational expectations and the efficient market hypothesis because as a market participant I considered them so unrealistic that I never bothered to study them.

By creating the European Central Bank, the member states exposed their own government bonds to the risk of default. Developed countries that issue bonds in their own currency never default, because they can always print money. Their currency may depreciate, but the risk of default is absent.

The reality is that financial markets are self-destabilizing; occasionally they tend toward disequilibrium, not equilibrium.

The scope for improvement is infinite, precisely because perfection is unattainable.

It is credit that matters, not money (in other words, monetarism is a false ideology).

The financial markets play an active role in determining what's going to happen, how the economy is going to function.

Hedge funds are a very efficient way of managing money. But there are clearly some risks. Hedge funds use credit and credit is a source of instability. Transactions involving credit should be regulated.

To my mind, there is a solution which has to do with democracy, because democratic governments are subject to the will of the people. So, if the people will it, you can actually create international institutions through the democratic states.

Taking this view, it is possible to see financial markets as a laboratory for testing hypotheses, albeit not strictly scientific ones. The truth is, successful investing is a kind of alchemy.

Market prices are always wrong in the sense that they present a biased view of the future.

I would be lying, however, if I claimed that I could always formulate worthwhile hypotheses on the basis of my theoretical framework. Sometimes there were no reflexive processes to be found; sometimes I failed to find them; and, what was the most painful of all, sometimes I got them wrong. One way or another, I often invested without a worthwhile hypothesis and my activities were not very different from a random walk.

Markets are imperfect. So you do need regulation, knowing that the regulators are also human.

An open society is a society which allows its members the greatest possible degree of freedom in pursuing their interests compatible with the interests of others.

Changeless society is characterized by the absense of alternatives.

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.

The lower interest rates fueled housing and consumption booms in countries such as Spain and Ireland. At the same time, Germany, struggling with the burdens of reunification, tightened its belt and became more competitive. All this led to a wide divergence in economic performance. Europe became divided into creditor and debtor countries.

Democracy, by its very nature, can't be imposed on people. Democracy has to be the people deciding for themselves.

Who most benefits from keeping marijuana illegal? The greatest beneficiaries are the major criminal organizations in Mexico and elsewhere that earn billions of dollars annually from this illicit trade - and who would rapidly lose their competitive advantage if marijuana were a legal commodity.

Studying economics is not a good preparation for dealing with it.