What are the lessons from the Great Depression, from stagflation in the 1970s, from deflation in Japan? The bubbles that preceded these challenging times should never have been allowed to happen. Yet even today, the Federal Reserve Bank (Fed) is very reluctant to pop bubbles. Greenspan talked about irrational exuberance in the stock markets, but let the stock market rise to the stratosphere in the late ‘90s; he has also kept interest rates low for an extended period despite mounting consumer debt and steep home price appreciation.... (continues)
