“The Only Game in Town” Book Summary + Lessons + Inspiring Quotes

Dr. Mohamed A. El-Erian, one of the world’s most influential economists, has authored a road map for what lies ahead and the decisions that must be made now to avert the next global economic and financial calamity, in his book “The Only Game in Town.”Some of the quotes taken from the book are given below:

Inspiring Quotes From “The Only Game In Town”

-There was a day — not so long ago — when governments would pay for things.

-To persuade you to keep the bonds they issued to you, they will pay you interest.

-Overages are used to finance their spending.

-There was a time—again, not so long ago—when banks competed for your deposits.

-They were eager to get their hands on your money, offering everything from free toasters to cash giveaways. This is no longer true.

-We risk losing generations of economic growth if we do not pivot to better outcomes.

-Since the 2008 global financial crisis, central banks have been forced to go deeper into the unknown and dangerous territory of “unconventional monetary policies.”

-For a long time, central banks purposefully remained well below society’s radar screens, preferring to function in obscurity.

-Central banks realized they needed help in their fight against inflation, which had eroded living standards worldwide, particularly in the 1970s and early 1980s. 

-This realization was backed up by academic research and drove significant operational and institutional changes worldwide, particularly in the 1990s.

-As much as any financial channel, such as interest rates, monetary policy influences the economy through its effect on emotion.

-The most attention has been drawn to the dominant influence on the pricing of stocks and bonds worldwide.

-This is a world that is likely to lead us to bad decision-making and sequential mistakes that can build on themselves. 

-Rather than self-correct quickly by taking us out of our comfort zones and holding us there for a while.

-Central banks’ efforts to create a new economic and financial age outpaced their organizations’ ability to comprehend it analytically.

-“Finance” was at the pinnacle of capitalist success. 

-A growing number of countries competed to become “the world’s financial centre” or smaller offshore financial hubs.

-Intermediation is at the heart of banking: it connects borrowers and savers in the actual economy. 

-Banking became about banks, not businesses, transactions, not relationships, and counterparties, not clients, in the run-up to the crisis.

-As horrible as things appeared at the time, many people did not know how bad things were until much later. 

The Only Game in Town

It was nothing compared to what would have happened if the “sudden pause” had lasted.

-It was only a matter of time before the blame game began in earnest, with the world suffering tremendous harm and teetering on the brink of even greater disaster due to financial irresponsibility.

-With the threat of a multi-year worldwide depression, the global economy began to recover.

-The systemically important emerging economies led this recovery in a pattern that had never been witnessed before.

-However, even though banks were “fixed,” the economy struggled at the national, regional, and global levels.

-Recognizing the continuous shifts, regulators and supervisors are scrambling to catch up, attempting to ramp up their efforts to avoid fighting the last war.

-David Hunt, the CEO of Prudential Investment Management, ranked liquidity as the number one worry. 

-He noted that it is “one of the unforeseen effects” of recent regulatory reforms, calling it a “huge risk.”

-To emphasize the occurrence of anomalous covariances, the gain in stocks was accompanied by a decrease in commodities rather than a rise, and a significant decline at that.

-There are various areas of excellence and several well-managed businesses and governments.

-Central banks have always gone on the side of prudence in the near term, regardless of the long-term ramifications.

-The primary issue confronting central banks is their ability to create systemic and long-term change, which must be emphasized.

-On the economic front, we should look for effects such as changes in consumption, energy intensity, etc.

-We have yet to witness the full influence of these dynamics on the media, let alone in a rising variety of other areas and activities.

-Today’s innovations threaten various existing sectors and activities, which I refer to as “disruptions from other worlds.”

-This admission—that we don’t know which path we’ll choose or when the shift will occur—isn’t a cop-out.

-Instead, it’s an acknowledgment of Chairman Bernanke’s “unusually uncertain outlook’s” fluidity. 

-Furthermore, this situation should not lead to operational paralysis or a narrowing of vision. Quite the opposite is true.

-A shift to a bimodal plane schedule would be lost on a small number of individuals.

-Even with awareness training, we may not be as neutral as we would want to believe. 

-Furthermore, outmoded but still active societal factors can firmly embed our vulnerabilities, affecting procedures and decision-making.

-In a business setting, a premortem is performed before starting a project rather than at the end to improve the project rather than autopsied.

-This simple description captures the intricacies that confront not only central banks in a global economy but all of us.

-On the plus side, the unconventional steps central banks took could buy time and space for others to get their act together. 

-They aided in rehabilitating key private sector balance sheets, beginning with banks and moving on to firms and consumers. 

– However sluggish at times, they contributed to the growth and, in the US, enormous job creation.

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