“To the man who held stock on margin, disaster had only one face and that was falling prices. But now prices were to be allowed to fall. The speculator's only comfort, henceforth, was that his ruin would be accomplished in an orderly and becoming manner.”

— John Kenneth Galbraith, book The Great Crash, 1929

The Great Crash, 1929 (1954 and 1997 https://openlibrary.org/books/OL25728842M/The_Great_Crash_1929) <br class="br">Source: Chapter VI https://openlibrary.org/books/OL25728842M/The_Great_Crash_1929, Things Become More Serious, Section II, p 110

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John Kenneth Galbraith207

American economist and diplomat 1908–2006

William Poundstone (1955) American writer

Part Three, Arbitrage, The Random Walk Cosa Nostra, p. 122
Fortune's Formula (2005)

“But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.”

Warren Buffett (1930) American business magnate, investor, and philanthropist

1997 Chairman's Letter
Letters to Shareholders (1957 - 2012)

“Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.”

Benjamin Graham (1894–1976) American investor

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter II, The Investor and Stock-Market Fluctuations, p. 42

“When credit is expanding, the rising price level and high profits bring about a high rate of interest. When the expansion has reached, the limit permitted by the stock of gold, the rate of interest is put still higher in order to bring about a fall in the price level. When the fall in prices takes effect, a low rate of interest becomes appropriate, and when credit contraction has proceeded so far that a redundant supply of gold has accumulated, the rate of interest is depressed still lower in order to bring about a renewed rise in the price level. Thus a high rate of interest corresponds first with rising, then with falling, prices, and so synchronizes with high prices. A low rate of interest corresponds first with falling, and then with rising, prices, and so synchronizes with low prices.”

Ralph George Hawtrey (1879–1975) British economist

Ralph George Hawtrey, quoted in Irving Fisher, The Theory of Interest (1930), Chapter 19. The Relation of Interest to Money and Prices

“I do not mean to suggest that all those who call themselves monetarists make this unconscious assumption that an inflation involves this uniform rise of prices. But we may distinguish two schools of monetarism. The first would prescribe a monthly or annual increase in the stock of money just sufficient, in their judgment, to keep prices stable. The second school (which the first might dismiss as mere inflationists) wants a continuous increase in the stock of money sufficient to raise prices steadily by a "small" amount—2 or 3 per cent a year. These are the advocates of a "creeping" inflation. … I made a distinction earlier between the monetarists strictly so called and the "creeping inflationists." This distinction applies to the intent of their recommended policies rather than to the result. The intent of the monetarists is not to keep raising the price "level" but simply to keep it from falling, i. e., simply to keep it "stable." But it is impossible to know in advance precisely what uniform rate of money-supply increase would in fact do this. The monetarists are right in assuming that in a prospering economy, if the stock of money were not increased, there would probably be a mild long-run tendency for prices to decline. But they are wrong in assuming that this would necessarily threaten employment or production. For in a free and flexible economy prices would be falling because productivity was increasing, that is, because costs of production were falling. There would be no necessary reduction in real profit margins. The American economy has often been prosperous in the past over periods when prices were declining. Though money wage-rates may not increase in such periods, their purchasing power does increase. So there is no need to keep increasing the stock of money to prevent prices from declining. A fixed arbitrary annual increase in the money stock "to keep prices stable" could easily lead to a "creeping inflation" of prices.”

Henry Hazlitt (1894–1993) American journalist

Where the Monetarists Go Wrong (1976)

“I am the only child of parents who weighed, measured, and priced everything; for whom what could not be weighed, measured, and priced, had no existence.”

Charles Dickens book Little Dorrit

Bk. I, Ch. 2
Little Dorrit (1855-1857)

“If a rise in wages does not raise prices, a fall will not reduce them.”

Joan Robinson book An Essay on Marxian Economics

Source: An Essay on Marxian Economics (Second Edition) (1966), Chapter X, Real And Money Wages, p. 89

“What a terrible price students are paying now for the idea of comfort.”

Alan Charles Kors (1943) American academic

2010s, Who's too Weak to Live with Freedom? (2013)

“When the barbarians are at the gates, interest rates rise and bond prices fall precipitously.”

William J. Bernstein (1948) economist

Source: The Four Pillars of Investing (2002), Chapter 1, No Guts, No Glory, p. 13.

“But a tax on luxuries would no other effect than to raise their price. It would fall wholly on the consumer, and could neither increase wages nor lower profits.”

David Ricardo (1772–1823) British political economist, broker and politician

Source: The Principles of Political Economy and Taxation (1821) (Third Edition), Chapter XVII, Taxes on Other Commodities, p. 161 (see also.. Consumption Tax)

“To the man who held stock on margin, disaster had only one face and that was falling prices. But now prices were to be allowed to fall. The speculator's only comfort, henceforth, was that his ruin would be accomplished in an orderly and becoming manner.”

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John Kenneth Galbraith207

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