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Faith in the Fed: The Last Bubble to Pop

The ECB is "way cool". They require IBDDs to be held in the Central bank by the member banks & impose reserve requirements on the majority of bank liabilities. The ECB has a grip.

Faith in the Fed: The Last Bubble to Pop

(1) the "payments gap filled by foreigners" (which was not sterilized by the Fed) & (2) the DIDMCA of March 31st 1980, which created tens of thousands of new commercial banks (but didn't provide direct control over the volume of legal reserves), & (3) toxic waste (unregulated financial innovation) were the principle villians behind the asset bubbles.

The TAF was genius. It ushered in the Financial Services Regulatory Relief Act of 2006 three years before it was planned.

So if I could blame anyone it would definitely be Greenspan & Congress.

Faith in the Fed: The Last Bubble to Pop

We've been practicing "Do Something Economics" for 36 years. Bernanke's a genius. We've just gone through a 2 year period of a "tight" monetary policy. Everybody should have known (and Bernanke did know) that at the end of the cycle the "front end" tapers off.