Kurt Richebacher

“All this emphasis on statistics and calculations…,” he went on, rapping his silver-handled cane on the table for emphasis, “without a proper theory, it is all nonsense. And your economists seem to have no theory at all…they just think they can manipulate the system in order to get whatever outcome they want. They think economic growth comes from consumer spending and that they can control consumer spending by adjusting lending rates. It is unbelievable that anyone takes this seriously. It is capital formation that really matters. A rich society is one with a great stock of capital…one that builds capital and puts it to work to create more capital. A rich society is not one where people consume. Just the opposite. It is not what is consumed that creates wealth; it is what is NOT consumed. Yet, all the Anglo-Saxons focus on motivating consumers to consume. And now they are consuming more than they make. I tell you, in 70 years of studying economics, I have never seen such nonsense.

I have always thought it was the duty of each generation to leave the next one a little better off. That means, each generation has to consume less than it produces. It has to leave a little something extra. The problem, you see, is not an economic one…what we are doing to our children with this use of credit and debt is deeply immoral. It is wrong. It is wrong to burden the future with our mistakes, our conceits, our ambitions. This is what we are doing, and it is shameful.”

Source: The Daily Reckoning. Newsletter on Sep 13th 2007.

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One thought on “Kurt Richebacher

  1. Until I went broke (by NOT following Kurt Richebacher’s thinking) I used to get his monthly newsletter from Agora. It was a tough read; I had to re-read some paragraphs three times to fully understand them. Yet each letter was a HUGE and valuable education, like a mini-textbook. He was probably the wisest of the bunch. And I always love the quote from Paul Volker that the purpose of the Federal Reserve was to prove Kurt Richebacher wrong.

    Not being an in-the-market investor, though, it was hard for me to justify spending 400 bucks a year every year just to have a good and interesting read. I already knew enough from him and many other authors that the country was on the skids, so I did not re-subscribe. But I think about his writings at least once a week, if not more. I am hoping Agora comes out with a collection of Kurt’s work, or the ability to buy a few years of reprints.

    Whoever put this up, thanks for the notice.

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