Past experiences from financial bubbles are always overlooked. In my studies as a market analyst and businessman, I have seen how bubbles originate, and then cause damage.
Bubbles are not stopped by Federal Reserve action on interest rates, as is usually suggested by pundits. That is because politicians always take over, and often influence any dampening efforts by the Fed. All with an adverse effect.
It would, for example, have had done absolutely nothing with the internet bubble. Or even the mortgage bubble because interest rate adjustments then would have been applied too late. Interest rates today are too low to start with, and the Fed inflates when it makes bond purchases.
Action or inaction by the Securities and Exchange Commission would have helped provide correctives. Just sitting on obviously useless and dangerous financings, instead of open-handed approvals of questionable underwritings created the internet bubble. By merely slowing down the underwriting of deals, and the SEC would have dampened many past debacles.
So the Fed has had little to do with the bubble solution all the time. In fact, it has aided and abetted the problem. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)
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