Bernanke Says No Asset Bubbles; Memories of Greenspan and No Housing Bubble

Fed Chairman Ben Bernanke said today that he doesn't see evidence of an asset bubble in financial markets - equities, gold, commodities, etc. This of course reminds me of Alan Greenspan's famous announcements early in the decade that there was no housing bubble. Yeah, right.

Fed Chairman Ben Bernanke said today in a speech to the Economic Club of New York that he doesn't see evidence of an asset bubble in financial markets - equities, gold, commodities, etc. It wasn't actually in the speech but in an answer to a question about fiancial bubbles. He prefaced his answer by saying that it is incredibly difficult to determine what is and isn't an inflated asset.

This of course reminds me of Alan Greenspan's famous announcements early in the decade that there was no housing bubble. Yeah, right. Greenspan at the time claimed that housing couldn't experience a bubble because the transaction costs were too high. At the time, he even encouraged homeowners to take out adjustable-rate loans because rates were so exceptionally low. All of this was an attempt to reinflate the economy after the crash in 2000-2001.

My point is that Central Bankers and experts often do not know, or have their own agendas for saying what they do. Tread cautiosly on Bernanke's words.

Sam Cass
Sam Cass: Sam Cass, MBA, JD, University of Texas at Austin. Always a fan of Leonardo Da Vinci.

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