Bernanke: “How to deal with asset bubbles is most difficult issue of the decade”
By Daniel at 16 November, 2009, 11:59 pm
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Well, it should be very obvious the way the fed deals with the bubbles they create. First, allow a bunch of easy money into the system to build the bubble (we can call it growth even though it really isn’t but wall street likes to say it is). Second, pretend to care about inflation and too much liquidity after you have let all your buddies at certain financial institutions know a policy change is coming. Thirdly, make statements about soft landings, moderate growth and the worst is past as the bubble created by the fed blows up.
Fourth, start the cycle again this time with lower rates and the next time still lower rates. Wall street must have their bubbles. Note: each time the bubble builds it is shorter lived and when it blows up the repercussions are more severe. This time will prove no different.
- Jailtheinsiders
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