Bubbles Quote by David Stockman
“The problem is that you're creating a system of bubble finance where interest rates are so low that people can speculate. An asset value goes up. You put it up as collateral. You borrow against it. You buy more of the asset. You then take the rising asset. You borrow against it again. This is the nature of what's going on in the world. This isn't an excess of real savings. This is an excess of artificial credit that's being fueled by all the central banks.”
About This Quote
Source Speech: Economic Outlook, 2008
Artificial credit expansion creates a bubble where low rates fuel speculation, not real savings.
In simple terms: Cheap credit fuels speculation, not real growth.
Key Takeaway
Watch for credit-driven bubbles.
Themes
finance
speculation
monetary policy
Mood
cautious
analytical
Type
economic
warning
When to use this quote
- investment
- policy making
- personal finance
Key Concepts
credit cycles
risk management
Questions to Reflect On
- What safeguards can limit speculative bubbles?
- How can individuals protect themselves?
A Different Perspective
Credit can also stimulate productive investment.
