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Bubble Trouble
Finally, the Federal Reserve is an organization much like any other—run by human beings with fallible judgment, driven by consensus, and less than congenial for contrarians. In bubbles, skeptics are always marginalized while the promoters are anointed as seers. And when a bubble gets loose, it infects every institution: banks, the media, and, yes, the Federal Reserve. The Fed, in the person of Alan Greenspan, failed to diagnose the Internet bubble accurately, and it misjudged the housing bubble, too. The Fed, in the person of Ben Bernanke, failed to see the credit mess coming. And once that crisis hit, the Fed failed to accurately gauge its scope and depth. When the party really gets going, we all drink from the same punch bowl.
© 2008
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Member Comments
Posted By: olderwiser @ 05/21/2008 12:48:17 PM
Comment: So, the solution to bubbles is in our nursery schools where we train our children to a sensible prudence when it comes to investing the elixir of their production, their money. Good luck, Fed.
Posted By: olderwiser @ 05/21/2008 12:45:33 PM
Comment: Little wonder that we cannot stop malicious war if we cannot control ordinary markets. Nature is the force which governs and nature loves war and markets. The core of our genetic being contains fish, reptiles, birds and a host of creatures which eat that which is at hand, and try as we will, our civilization is illusional when we claim to be above these swimming and crawling forms which survive under reliable rules of nature. Market bubbles are simply the black hole of nature into which creatures long extinct have fallen to deprive us of mere fossils to wonder why they failed. It was bubbles that got them.
Posted By: olderwiser @ 05/21/2008 12:38:48 PM
Comment: The Fed is no more effective than the vegetarian who bemoans the eating of animals and wishes for everyone to stop such barbaric conduct. Try as you may.