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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.

-George Soros

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The Securitisation Of Mortgages

George Soros

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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.

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Markets Are Imperfect. So You Do Need Regulation, Knowing That The Regulators Are Also Human.

Revolutions Usually Start With Enthusiasm And End In Tears.

When I Had Made More Money Than I Needed For Myself And My Family, I Set Up A Foundation To Promote The Values And Principles Of A Free And Open Society.

Unfortunately, The More Complex The System, The Greater The Room For Error.

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.

I Fancied Myself As Some Kind Of God Or An Economic Reformer Like Keynes

I Am Not A Zionist, Nor Am I Am A Practicing Jew, But I Have A Great Deal Of Sympathy For My Fellow Jews And A Deep Concern For The Survival Of Israel.

In Politics, Manipulating Reality Can Take Presidence Over Finding Reality.

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.

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.

What Works For Germany Can't Work For The Rest Of Europe: No Country Can Run A Chronic Surplus Without Others Running Deficits.

America Needs To Follow The Policies It Has Introduced In Germany. We Have To Go Through A Certain De-nazification Process.

The Trouble With Institutional Investors Is That Their Performance Is Usually Measured Relative To Their Peer Group And Not By An Absolute Yardstick. This Makes Them Trend Followers By Definition.

Markets Can Influence The Events That They Anticipate.

I'm Not Better Than The Next Trader, Just Quicker At Admitting My Mistakes And Moving On To The Next Opportunity.

I'm Only Rich Because I Know When I'm Wrong...i Basically Have Survived By Recognizing My Mistakes.

We [at Soros Fund Management] Use Options And More Exotic Derivatives Sparingly. We Try To Catch New Trends Early And In Later Stages We Try To Catch Trend Reversals. Therefore, We Tend To Stabilize Rather Than Destabilize The Market. We Are Not Doing This As A Public Service. It Is Our Style Of Making Money.

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.

In The Case Of A Meltdown, The Regulatory Authorities May Find Themselves Obliged To Step In To Preserve The Integrity Of The System. It Is In That Light That The Authorities Have Both A Right And An Obligation To Supervise And Regulate Derivative Instruments.

The Main Obstacle To A Stable And Just World Order Is The United States.

The Eurozone Status Quo Is Neither Tolerable Nor Stable. Mainstream Economists Would Call It An Inferior Equilibrium; I Call It A Nightmare - One That Is Inflicting Tremendous Pain And Suffering That Could Be Easily Avoided If The Misconceptions And Taboos That Sustain It Were Dispelled.

Start By Assuming The Market Is Always Wrong, So If You Copy Everybody Else On Wall Street, You're Doomed To Do Poorly.

Esperanto Was A Very Useful Language, Because Wherever You Went, You Found Someone To Speak With.

There Is No Doubt That The Countries That Now Have A Very Large Debt Have Not Introduced The Kind Of Structural Reforms That Germany Did And Are Therefore At A Disadvantage. But The Problem Is That This Disadvantage Is Becoming Even More Pronounced Through The Punitive Policies In Place.

The Concept Of A General Equilibrium Has No Relevance To The Real World (in Other Words, Classical Economics Is An Exercise In Futility).

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.

American Supremacy Is The Greatest Threat To The World Today.

Increase Your Bets When You Are Confident And Scale Down Your Positions When You Don't Have Conviction.

The Dark Comes Before Dawn. The Financial Markets Are Under Great Pressure Because Of The Lack Of Leadership During The Transition Period.

My Original Intention Was To Spend The Money In My Lifetime.

As A Society We Can't Live Without Moral Considerations. We Do Have To Protect The Public Good. And Markets Are Not Designed To Do That, So We Need A Political Process.

Proposition 19 Already Is A Winner No Matter What Happens On Election Day. The Mere Fact Of Its Being On The Ballot Has Elevated And Legitimized Public Discourse About Marijuana And Marijuana Policy In Ways I Could Not Have Imagined A Year Ago.

I Call Government That Works The Best For People Open Society, Which Is Basically Just Another More General Term For A Democracy That Is - You Call It Maybe A Liberal Democracy. It's Not Only Majority Rule But Also Respect For Minorities And Minority Opinions And The Rule Of Law. So It's Really A Sort Of Institutional Democracy.

Discount The Obvious, Bet On The Unexpected

Bush's War In Iraq Has Done Untold Damage To The United States. It Has Impaired Our Military Power And Undermined The Morale Of Our Armed Forces. Our Troops Were Trained To Project Overwhelming Power. They Were Not Trained For Occupation Duties.

Making An Investment Decision Is Like Formulating A Scientific Hypothesis And Submitting It To A Practical Test.

I Am For Maximum Supervision And Minimum Regulation.

I'm Only Rich Because I Know When I'm Wrong.

The Global Crisis Is Caused By Pathologies Inherent In The Global Financial System Itself.

The Hardest Thing To Judge Is What Level Of Risk Is Safe.

If I Had To Sum Up My Practical Skills, I Would Use One Word: Survival. And Operating A Hedge Fund Utilized My Training In Survival To The Fullest.

Financial Markets ... Resent Any Kind Of Government Interference But They Hold A Belief Deep Down That If Conditions Get Really Rough The Authorities Will Step In.

There Is Always A Divergence Between Our Perception And What Actually Exists.

If We Care About Universal Principles Such As Freedom, Democracy And The Rule Of Law, We Cannot Leave Them To The Care Of Market Forces; We Must Establish Some Other Institutions To Safeguard Them.

There Is A Well-established Conviction That The Central Banks Always Do What Is Necessary To Keep The System Going And Then Afterwards You Then Take Care Of The Legal Aspects. In A Crisis, You Simply Do Not Have Time To Think About Such Concerns For Too Long.

You Need A Government That Believes In Government. It Also Believes In Markets And Wants To Give Markets The Best, The Greatest Opportunity, But Is Trying To Govern Well.

There Is No Question That A Breakup Of The Euro Would Be Very Damaging, Very Costly, Both Financially And Politically. And The Biggest Loss Would Be Incurred By Germany. Germans Have To Bear In Mind That, Effectively, They Have Suffered Practically No Losses So Far. Transfers Have All Been In The Form Of Loans, And It Is Only When The Loans Are Not Repaid That Real Losses Will Be Incurred.

I Wish I Could Write A Book That Will Be Read For As Long As Our Civilization Lasts. I Would Value It Much More Highly Than Any Business Success If I Could Contribute To An Understanding Of The World In Which We Live Or, Better Yet, If I Could Help To Preserve The Economic And Political System That Has Allowed Me To Flourish As A Participant.

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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.

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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.

The Main Obstacle To A Stable And Just World Order Is The United States. [this Idea] Happens To Coincide With The Prevailing Opinion In The World. And I Think That's Rather Shocking For Americans To Hear.

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I Called Gold The Ultimate Bubble, Which Means It May Go Higher. But It’s Certainly Not Safe And It’s Not Going To Last Forever.

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Studying Economics Is Not A Good Preparation For Dealing With It.

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Democracies Have

Once We Realize That Imperfect Understanding Is The Human Condition There Is No Shame In Being Wrong, Only In Failing To Correct Our Mistakes.

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The Reality Is That Financial Markets Are Self-destabilizing; Occasionally They Tend Toward Disequilibrium, Not Equilibrium.

Sometimes Time Actually Works Against You If You Refuse To Face The Relevant Issues And Explain To The Public What Is At Stake.

I Contend That Financial Markets Never Reflect The Underlying Reality Accurately; They Always Distort It In Some Way Or Another And The Distortions Find Expression In Market Prices. Those Distortions Can, Occasionally, Find Ways To Affect The Fundamentals That Market Prices Are Supposed To Reflect.

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Democracies Have

As An Anonymous Participant In Financial Markets, I Never Had To Weigh The Social Consequences Of My Actions ... I Felt Justified In Ignoring Them On The Grounds That I Was Playing By The Rules.

I Think There's A Lot Of Merit In An International Economy And Global Markets, But They're Not Sufficient Because Markets Don't Look After Social Needs.

When It Comes To Social Consequences, They've Got All Different People Acting In Different Ways, Very Difficult To Even Have A Proper Criterion Of Success. So, It's A Difficult Task.

I Very Often Used To Get Backaches Due To The Fact That I Was Wrong. Whenever You Are Wrong You Have To Fight Or [take] Flight. When [i] Make The Decision, The Backache Goes Away.

It Is Sort Of A Disease When You Consider Yourself Some Kind Of God, The Creator Of Everything, But I Feel Comfortable About It Now Since I Began To Live It Out.

Investors Operate With Limited Funds And Intelligence, They Do Not Need To Know Everything. As Long As They Understand Something Better Than Others, They Have An Edge.

Something Better

My Approach Works Not By Making Valid Predictions But By Allowing Me To Correct False Ones.

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Successful Investing

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We Can Speak Of The Triumph Of Capitalism In The World, But We Cannot Yet Speak About The Triumph Of Democracy. There Is A Serious Mismatch Between The Political And The Economic Conditions That Prevail In The World Today.

Once A Trend Is Established It Tends To Persist And To Run It’s Full Course.

There Is No Point In Being Confident And Having A Small Position.

A Global Economy Is Characterized Not Only By The Free Movement Of Goods And Services But, More Important, By The Free Movement Of Ideas And Of Capital.

My Main Concern Is With The World Order

This Crisis Has The Potential To Be A Lot Worse Than Lehman Brothers.

Lehman Brothers

The World Is Looking To Us For Leadership. We Have Provided It In The Past; The Main Reason Why Anti-american Feelings Are So Strong In The World Today Is That We Are Not Providing It In The Present.

I Think That My Foundation Uses The Money Better Than The Government Does. In Any Event, I Do Pay Taxes.

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Every Bubble Consists Of A Trend That Can Be Observed In The Real World And A Misconception Relating To That Trend. The Two Elements Interact With Each Other In A Reflexive Manner.

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.

You Could Adjust The Punishment To Fit The Infraction. Even A Small Fine Would Be Enough To Bring An Errant Government To Heel.

The Financial Markets Play An Active Role In Determining What's Going To Happen, How The Economy Is Going To Function.

I'm Not Doing My Philanthropic Work Out Of Any Kind Of Guilt, Or Any Need To Create Good Public Relations. I'm Doing It Because I Can Afford To Do It, And I Believe In It.

I Don't Panic. The Same Thing Applies To Me As To Everybody Else, So I'm Given To Euphoria And Despair. And I Would Say That I Basically Have Survived By Recognizing My Mistakes.

Markets Are Designed To Allow Individuals To Look After Their Private Needs And To Pursue Profit. It's Really A Great Invention, And I Wouldn't Underestimate The Value Of That. But They're Not Designed To Take Care Of Social Needs.

Great Inventions

I Don't Use My Money To Gain Political Influence For My Private Interests, Which Is What Many Rich People Do, And What, In A Sense, Market Fundamentalism Does, Because It Is In The Interests Of People Who Have A Lot Of Money To Have As Little Taxes As Possible.

Short Term Volatility Is Greatest At Turning Points And Diminishes As A Trend Becomes Established

If The Terrorists Have The Sympathy Of People, It's Much Harder To Find Them. So We Need People On Our Side, And That Leads Us To Be Responsible Leaders Of The World, Show Some Concern With The Problems.

The Ultimate Asset Bubble Is Gold.

To Others, Being Wrong Is A Source Of Shame; To Me, Recognizing My Mistakes Is A Source Of Pride.

The More Comprehensive And Convincing A Debt Reduction Program Is, The Less Likely It Is To Fail. And Remember, Just As Germany Is Grateful To America For The Marshall Plan, Italy Would Be Grateful To Germany For Helping It Lower Its Refinancing Costs.

The Generally Accepted Theory Is That Financial Markets Tend Towards Equilibrium, And...discount The Future Correctly. I Operate Using A Different Theory, According To Which Financial Markets Cannot Possibly Discount The Future Correctly Because The Do Not Merely Discount The Future; They Help To Shape It.

The Financial Markets Generally Are Unpredictable. So That One Has To Have Different Scenarios... The Idea That You Can Actually Predict What's Going To Happen Contradicts My Way Of Looking At The Market.

Of Course, Speculation Will Always Make A Crisis Worse. If There Is A Weak Point, It Will Expose It.

We Must Not Forget; But We Must Forgive. Suffering Often Such Compassion From The Jewish Community. It Was Jewish Groups In The Us Who Were In The Forefront In Opposing The Ethnic Cleansing Of Muslim In Bosnia.

I Rely A Great Deal On Animal Instincts.

The Laissez-faire Argument Relies On The Same Tacit Appeal To Perfection As Does Communism.

Laissez Faire Capitalism

I'll Tell You What I'd Do If It Were Up To Me: I Would Establish A Strictly Controlled Distribution Network Through Which I Would Make Most Drugs, Excluding The Most Dangerous Ones Like Crack, Legally Available. Initially I Would Keep The Prices Low Enough To Destroy The Drug Trade. Once That Objective Was Attained I Would Keep Raising The Prices, Very Much Like The Excise Duty On Cigarettes, But I Would Make An Exception For Registered Addicts In Order To Discourage Crime. I Would Use A Portion Of The Income For Prevention And Treatment. And I Would Foster Social Opprobrium Of Drug Use.

I Passionately Disagreed With Treasury Secretary Hank Paulson's Plan To Bail Out The Banks By Using A Public Fund Called The Troubled Asset Relief Program (tarp) To Help Banks Take Toxic Assets Off Their Balance Sheets. I Argued That It Would Be Much Better To Put The Money Where The Hole Was And Replenish The Equity Of The Banks Themselves.

It's Not Whether You're Right Or Wrong That's Important, But How Much Money You Make When You're Right And How Much You Lose When You're Wrong

Germany Will Always Do The Minimum To Preserve The Euro. Doing The Minimum, Though, Will Perpetuate The Situation Where The Debtor Countries In Europe Have To Pay Tremendous Premiums To Refinance Their Debt. The Result Will Be A Europe In Which Germany Is Seen As An Imperial Power That Will Not Be Loved And Admired By The Rest Of Europe - But Hated And Resisted, Because It Will Perceived As An Oppressive Power.

However, You Have To Recognize That Regulations Will Never Be Completely Successful And They Will Always Be Full Of Holes. You Must Constantly Be Ready To Fill New Holes. Actually Regulation Should Be Kept To A Minimum, But There Has To Be Some Cooperation Between Market Participants And Authorities - As Was The Case In The Early Postwar Years. The Bank Of England Was A Very Successful Regulator By Cooperating With Market Participants. This Cooperative Spirit Was Broken By The Market Fundamentalists.

The Integration Of Europe Was Very Much Led By A Germany That Was Always Willing To Pay A Little Bit Extra To Reach A Compromise That Everybody Accepted, Because Germany Was So Eager To Get European Support For Reunification. That Was Called The "farsighted Vision," Which Created The European Union.

I Am Against Market Fundamentalism. I Think This Propaganda That Government Involvement Is Always Bad Has Been Very Successful - But Also Very Harmful To Our Society.

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.

A Full And Fair Discussion Is Essential To Democracy.

I Used To Be Opposed To The Idea Of Social Entrepreneurship. I Said, You Know, Let Business Be Business, And Philanthropy Be Philanthropy. Keep The Two Separate, Don't Mix It Up, And This Is What I Did, And I Did That Rather Successfully, But I Now Recognize That Actually You Do Need To Mix It Up And I Think There Is Room For Social Entrepreneurship.

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.

The Generally Accepted View Is That Markets Are Always Right -- That Is, Market Prices Tend To Discount Future Developments Accurately Even When It Is Unclear What Those Developments Are. I Start With The Opposite View. I Believe The Market Prices Are Always Wrong In The Sense That They Present A Biased View Of The Future.

However, Even A Strong Government Can't Perform Miracles. It Needs Money From The Taxpayers.

The Scope For Improvement Is Infinite, Precisely Because Perfection Is Unattainable.

This Is The Joint Responsibility Of Everyone Who Was Involved In The Introduction Of The Euro Without Understanding The Consequences. When The Euro Was Introduced, The Regulators Allowed Banks To Buy Unlimited Amounts Of Government Bonds Without Setting Aside Any Equity Capital. And The European Central Bank Discounted All Government Bonds On Equal Terms. So Commercial Banks Found It Advantageous To Accumulate The Bonds Of The Weaker Countries To Earn A Few Extra Basis Points.

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.

Market Prices Are Always Wrong In The Sense That They Present A Biased View Of The Future.

A Lot Of The Evil In The World Is Actually Not Intentional. A Lot Of People In The Financial System Did A Lot Of Damage Without Intending To.

When A Long-term Trend Loses It’s Momentum, Short-term Volatility Tends To Rise. It Is Easy To See Why That Should Be So: The Trend-following Crowd Is Disoriented.

In 2012, The Far-right Golden Dawn Won 21 Seats In Greece's Parliamentary Election, The Right-wing Jobbik Gained Ground In My Native Hungary, And The National Front's Marine Le Pen Received Strong Backing In France's Presidential Election. Growing Support For Similar Forces Across Europe Points To An Inescapable Conclusion: The Continent's Prolonged Financial Crisis Is Creating A Crisis Of Values That Is Now Threatening The European Union Itself.

Money Values Do Not Simply Mirror The State Of Affairs In The Real World; Valuation Is A Positive Act That Makes An Impact On The Course Of Events. Monetary And Real Phenomena Are Connected In A Reflexive Fashion; That Is, They Influence Each Other Mutually. The Reflexive Relationship Manifests Itself Most Clearly In The Use And Abuse Of Credit.

The Us Needs A Cap And Trade System With Auctioning Of Licenses For Emissions Rights. The Revenues From These Auctions Can Be Used To Launch A New, Environmentally Friendly Energy Policy. That Would Be Yet Another Federal Program That Could Help Us To Overcome The Stagnation.

The Key Problem Is The Debt Restructuring In The Euro Zone. As Long As The Debt Burden Is Not Reduced, There Is No Chance Of The Weaker Eu Countries Regaining Competitiveness.

Mankind's Ability To Understand And Control The Forces Of Nature Greatly Exceeds Our Ability To Govern Ourselves

Making An Investment Decision Is Like Formulating A Scientific Hypothesis And Submitting It To A Practical Test. The Main Difference Is That The Hypothesis That Underlies An Investment Decision Is Intended To Make Money And Not To Establish A Universally Valid Generalization.

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.

The Pro-israel Lobby Has Been Remarkably Successful In Suppressing Criticism. Politicians Challenge It At Their Peril Because Of The Lobby's Ability To Influence Political Contributions.

The Worse A Situation Becomes The Less It Takes To Turn It Around, The Bigger The Upside.

The Main Enemy Of The Open Society, I Believe, Is No Longer The Communist But The Capitalist Threat.

Laissez Faire Capitalism

We Are Trying To Make The World A Better Place, But That Is Not Necessarily What We Accomplish. Many Of The Problems Which Preoccupy Us Are Basically Insoluble.

Well, You Know, I Was A Human Being Before I Became A Businessman.

To Be Successful, You Need Leisure. You Need Time Hanging Heavily On Your Hands.

The Bureaucratic Method Of Building An Integrated Europe Has Exhausted Its Potential.

Now That I Have Called You On Your False Accusation, You Are Using Additional Smear Tactics.

Smear Campaigns

Anticipating Attacks, I Should Like To Emphasize That I Do Not Subscribe To The Myths Propagated By Enemies Of Israel And I Am Not Blaming Jews For Anti-semitism. Anti-semitism Predates The Birth Of Israel. Neither Israel's Policies Nor The Critics Of Those Policies Should Be Held Responsible For Anti-semitism. At The Same Time, I Do Believe That Attitudes Toward Israel Are Influenced By Israel's Policies, And Attitudes Toward The Jewish Community Are Influenced By The Pro-israel Lobby's Success In Suppressing Divergent Views.

We In The United States Are Very Often - Since We Are A Democracy And We Have National Interests, We've Often Made The Mistake That A Democracy Has To Adopt America's Interests, And That Is A Contradiction Because A Democracy Basically Is People Deciding What Their Interests Are.

Democracies Have

I Give Away Something Up To $500 Million A Year Throughout The World Promoting Open Society. 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.

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.

I Think It Is Natural That Every Country Has To Take Care Of Its Interests, But There Are Some Interests That Are Common To All Countries. There Are Some Human Interests, Or We Need Also International Cooperation. We've Sometimes Confused It With Dictation.

Giving Government Aid To A Bank Basically Transforms It Into A Utility. The Huge Salaries In This Sector Are Only A Symptom Of A More Profound Misalignment. The Profitability Of The Finance Industry Has Been Excessive. [...] That Was Absurd.

In Certain Circumstances, Financial Markets Can Affect The So-called Fundamentals Which They Are Supposed To Reflect. When That Happens, Markets Enter Into A State Of Dynamic Disequilibrium And Behave Quite Differently From What Would Be Considered Normal By The Theory Of Efficient Markets. Such Boom/bust Sequences Do Not Arise Very Often, But When They Do, They Can Be Very Disruptive, Exactly Because They Affect The Fundamentals Of The Economy.

Just As The Process Of Repealing National Alcohol Prohibition Began With Individual States Repealing Their Own Prohibition Laws, So Individual States Must Now Take The Initiative With Respect To Repealing Marijuana Prohibition Laws.

Germans Tend To Forget Now That The Euro Was Largely A Franco-german Creation. No Country Has Benefited More From The Euro Than Germany, Both Politically And Economically. Therefore What Has Happened As A Result Of The Introduction Of The Euro Is Largely Germany's Its Responsibility.

Market Prices Are Always Wrong.

The Strength Of This Country Lies In The Declaration Of Independence And The Bill Of Rights And The Freedom Of Speech And Thought.

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.

If Truth Be Known, I Carried Some Rather Potent Messianic Fantasies With Me From Childhood Which I Felt I Had To Control, Otherwise I Might End Up In The Loony Bin. But When I Made My Way In The World I Wanted To Indulge Myself In My Fantasies To The Extent That I Could Afford.

I Put Forward A Pretty General Theory That Financial Markets Are Intrinsically Unstable. That We Really Have A False Picture When We Think About Markets Tending Towards Equilibrium.

An Open Society Calls Itself Open To Improvement. It Is Based On The Recognition That People Have Divergent Views And Interests, And That Nobody Is In Possession Of The Ultimate Truth.

If Investing Is Entertaining, If You're Having Fun, You're Probably Not Making Any Money. Good Investing Is Boring.

Investing Money

There Is A Resurgence Of Anti-semitism In Europe. The Policies Of The Bush Administration And The Sharon Administration Contribute To That. It's Not Specifically Anti-semitism, But It Does Manifest Itself In Anti-semitism As Well.

Law Has Become A Business. Health Care Has Become A Business. Unfortunately, Politics Has Also Become A Business. That Really Undermines Society.

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.

One Of The Myths Propagated By The Enemies Of Israel Is That There Is An All-powerful Zionist Conspiracy. That Is A False Accusation. Nevertheless, That Aipac Has Been So Successful In Suppressing Criticism Has Lent Some Credence To Such False Beliefs.

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.

When Money Is Free, The Rational Lender Will Keep On Lending Until There Is No One Else To Lend To.

If We Carry This Line Of Argument To Its Logical Conclusion, The Meaning Of Life Consists Of The Flaws In One's Conceptions And What One Does About Them. Life Can Be Seen As A Fertile Fallacy.

Meaning Of Life

The Sovereignty Of States Must Be Subordinated To International Law And International Institutions.

It Is Much Easier To Put Existing Resources To Better Use, Than To Develop Resources Where They Do Not Exist.

Every Bubble Has Two Components: Something - Some Real Trend, And A Misconception About That Trend.

The World Order Needs A Major Overhaul.

Political Debate Is More Interested In Manipulating The Truth, Than Finding The Truth.

Finding Out The Truth

There Is Very Little Difference Between Speculation And Investment. The Only Difference Is Basically That Investments Are Successful Speculations Because If You Successfully Anticipate The Future You Make A Speculative Profit.

If Every Rich Person Gave 50 Percent Of Their Wealth To Charity, I Would Not Say They Should Pay More Taxes.

America Felt Victorious And Generous After World War Ii. They Had Also Learned From The Mistakes After World War I When They Imposed Punishment On Germany. What Became Of Germany? A Nazi Dictatorship Which Threatened The World. Today's Germany Doesn't Feel As Prosperous And Generous As America Then. But Actually, Germany Still Is Very Prosperous.

As I Discovered, There Is A Great Deal Of Similarity Between A Boom-bust Process In The Financial Markets And The Rise And Fall Of The Soviet System.

The People Currently In Charge Have Forgotten The First Principle Of An Open Society, Namely That We May Be Wrong And That There Has To Be Free Discussion. That It's Possible To Be Opposed To The Policies Without Being Unpatriotic.

We Must Recognize That As The Dominant Power In The World We Have A Special Responsibility. In Addition To Protecting Our National Interests, We Must Take The Leadership In Protecting The Common Interests Of Humanity.

The Assumption Of Perfect Knowledge Is Very Far From Reality ... A Lot Of The Evil In The World Is Actually Not Intentional.

The Main Difference Between Me And Other People Who Have Amassed This Kind Of Money Is That I Am Primarily Interested In Ideas, And I Don't Have Much Personal Use For Money.

My Sense Of Insecurity Keeps Me Alert, Always Ready To Correct My Errors.

Playing By The Rules, One Does The Best He Can, Irrespective Of The Social Consequences. Whereas In Making The Rules, People Ought To Be Concerned With The Social Consequences And Not With Their Personal Interests.

Economic History Is A Never-ending Series Of Episodes Based On Falsehoods And Lies, Not Truths. It Represents The Path To Big Money. The Object Is To Recognize The Trend Whose Premise Is False, Ride That Trend And Step Off Before It Is Discredited.

Economic History

Economics Seeks To Be A Science. Science Is Supposed To Be Objective And It Is Difficult To Be Scientific When The Subject Matter, The Participant In The Economic Process, Lacks Objectivity.

Outperforming The Market With Low Volatility On A Consistent Basis Is An Impossibility. I Outperformed The Market For 30-odd Years, But Not With Low Volatility.

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 Chose America As My Home Because I Value Freedom And Democracy, Civil Liberties And An Open Society.

The Prevailing Wisdom Is That Markets Are Always Right. I Take The Opposite Position. I Assume That Markets Are Always Wrong.

Misconceptions Play A Prominent Role In My View Of The World.

I Have Made It A Principle To Give Advice That Does Not Serve My Personal Interest But Rather The Common Interests.

It Is Better To Have A Cat And Mouse Game Where The Cat Has The Upper Hand Than A Cat And Mouse Game Where The Mice Are Ruling. Because The Latter Means That The Market Participants Are Given Free Range. That Was Actually The Big Misconception Of Our National Hero Ronald Reagan, Who Always Talked About The Magic Of The Market.

Everything Adds Up To A Major Crisis. Humanity Is Faced With A Global Energy Crisis ... The Core Of The Crisis Lies In The Increasing Shortage Of Oil.

If The Bubbles Contain A Misconception, As They Always Do, Then It Can't Be Maintained Forever.

These Public-private Partnerships Are Very, Very Dangerous. The Most Rotten Part Of The Financial System In The Us Consisted Of The Government Sponsored Entities, Fannie Mae And Freddie Mac. They Really Kicked Off This Crisis. The State Should Set The Rules And Enforce Them - But Not Become Involved As A Market Player.

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.

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.

I Commissioned Two Political Experts To Advise Me About What I Could Do To Oppose The Re-election Of President Bush.

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