Belief Quote by Carmen Reinhart
“The essence of the this-time-is-different syndrome is...rooted in the firmly held belief that financial crises are things that happen to other people in other countries at other times; crises do not happen to us, here and now. We are doing things better, we are smarter, we have learned from past mistakes. The old rules of valuation no longer apply. Unfortunately, a highly leveraged economy can unwittingly be sitting with its back at the edge of a financial cliff for many years before chance and circumstance provoke a crisis of confidence that pushes it off.”
About This Quote
Source Book: This Time Is Different: Eight Centuries of Financial Folklore, 2018
The belief that past crises are irrelevant makes economies vulnerable to hidden risks that can trigger sudden collapses.
In simple terms: Thinking past crises are over leaves us exposed to hidden danger.
Key Takeaway
Recognize and plan for systemic risk.
Themes
finance
risk
history
behavior
policy
Mood
cautious
reflective
Type
analytical
warning
When to use this quote
- investment decisions
- regulatory oversight
- personal finance
- corporate strategy
Key Concepts
Moral hazard
systemic risk
financial cycles
Questions to Reflect On
- How do you assess hidden financial risks?
- What safeguards can counter overconfidence?
A Different Perspective
Even with better data, human optimism can blind us to looming threats.
