He should know. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. But that's not the whole story. The original quote is believed to be "Buy when there's blood in the streets, even if the blood is your own."
This is contrarian investing at its heart - the strongly-held belief that the worse things seem in the market, the better the opportunities are for profit.
In finance, a contrarian is one who attempts to profit by investing in a manner that differs from the conventional wisdom, when the consensus opinion appears to be wrong.
Famous Bank Quotes:
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
– Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809)
“I believe that banking institutions are more dangerous to our liberties than standing armies.” – Thomas Jefferson
“Issue of currency should be lodged with the government and be protected from domination by Wall Street. We are opposed to…provisions [which] would place our currency and credit system in private hands.” – Theodore Roosevelt
Despite these warnings, Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: “I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.”
- Woodrow Wilson
With no secular education and barely able to speak or write German, Mayer Rothschild became one of the richest men in Germany. He founded a dynasty of bankers who financed the wars and whims of nobility and governments.
In 1810, Rothschild reorganized his business, making his grown sons full partners, but retaining for himself a decisive vote. Now in poor health, he allowed his sons to run the business, while he relaxed and studied English.
In March 1811, Jacob Rothschild settled in Paris where he founded the French branch of the family banking business. Under the noses of the French, Jacob cleverly managed to move English money to the Duke of Wellington, who was fighting Napoleon on the continent.
Although in poor health, Mayer Rothschild was appointed to a seat on the Frankfurt electoral college, despite objections to the naming of a Jew to this body. On September 19, 1812, Rothschild died in Frankfurt, leaving a vast business empire to his five sons.
The Alchemists: Three Central Bankers and a World on Fire (Amazon Review)
Neil Irwin’s The Alchemists is a gripping account of the most intense exercise in economic crisis management we’ve ever seen, a poker game in which the stakes have run into the trillions of dollars. The book begins in, of all places, Stockholm, Sweden, in the seventeenth century, where central banking had its rocky birth, and then progresses through a brisk but dazzling tutorial on how the central banker came to exert such vast influence over our world, from its troubled beginnings to the Age of Greenspan, bringing the reader into the present with a marvelous handle on how these figures and institutions became what they are – the possessors of extraordinary power over our collective fate. What they chose to do with those powers is the heart of the story Irwin tells.
Irwin covered the Fed and other central banks from the earliest days of the crisis for the Washington Post, enjoying privileged access to leading central bankers and people close to them. His account, based on reporting that took place in 27 cities in 11 countries, is the holistic, truly global story of the central bankers’ role in the world economy we have been missing. It is a landmark reckoning with central bankers and their power, with the great financial crisis of our time, and with the history of the relationship between capitalism and the state. Definitive, revelatory, and riveting, The Alchemists shows us where money comes from—and where it may well be going.
The role of money-lenders in history was once aptly termed by many acute observers as the "Hidden Hand." It is the power to create, lend and accumulate interest on "credit," and then re-lend that interest for further interest, in perpetuity, that creates pervasive, worldwide debt, from the individual, to the family, to the entire state. The ability to operate a fraudulent credit and loan system has long been known, and through all the slickness of a snake-oil salesman, the money-lenders - the same types Jesus whipped from the Temple - have persuaded governments that banking is best left to private interests.
Many wars, revolutions, depressions, recessions, and other social upheavals, have been directly related to the determination of these money-lenders to retain and extend their power and profits. When any state, individual or idea has threatened their scam they have often responded with wars and revolutions.
The cultural and material progress of a civilization will often relate to the degree by which it is free from the influence of debt, and the degradation that results when the money-lenders are permitted to regain power. Hence, Goodson shows that both World Wars, the Napoleonic wars, the American Revolution, the rise and fall of Julius Caesar, the overthrow of Gaddafi in Libya and the revolution against Tsar Nicholas, among much else relate to this "Hidden Hand" in history. This is the key to understanding the past, present and future.