There seems to be an inevitability to some kind of big reset with asset prices so overblown. But if the stock market drops precipitously, as history would suggest, we could have a severe depression in spending which keeps commodities low priced (like the 30s era), as you say. If however the Federal Reserve prints cheap money to stimulate (2000, 2008,2020) then commodities and inflation can soar. Which of course will deepen the deficit even more and cause some kind of additional implosion at some point too to resolve that unsustainable strategy. Greenspan did us no favors by throwing cheap money out in 2000 (causing the first housing asset peak). I'm not sure Obama shouldn't have just let he system collapse in 2008 instead of bailing everyone out. Bernanke studied the Great Depression and came to the conclusion that all we needed to do was provide cheap stimulus to avoid serious downturns. But look where it's gotten us, $35 trillion in debt and growing!
Yeah great points. The stimulus/bailouts keep getting larger with no political will do reduce deficits so practically it's also safe to assume that they will continue that playbook when that inevitable time comes.
And I think you know I disagree with Bernanke's conclusions about the Great Depression haha!
There seems to be an inevitability to some kind of big reset with asset prices so overblown. But if the stock market drops precipitously, as history would suggest, we could have a severe depression in spending which keeps commodities low priced (like the 30s era), as you say. If however the Federal Reserve prints cheap money to stimulate (2000, 2008,2020) then commodities and inflation can soar. Which of course will deepen the deficit even more and cause some kind of additional implosion at some point too to resolve that unsustainable strategy. Greenspan did us no favors by throwing cheap money out in 2000 (causing the first housing asset peak). I'm not sure Obama shouldn't have just let he system collapse in 2008 instead of bailing everyone out. Bernanke studied the Great Depression and came to the conclusion that all we needed to do was provide cheap stimulus to avoid serious downturns. But look where it's gotten us, $35 trillion in debt and growing!
Yeah great points. The stimulus/bailouts keep getting larger with no political will do reduce deficits so practically it's also safe to assume that they will continue that playbook when that inevitable time comes.
And I think you know I disagree with Bernanke's conclusions about the Great Depression haha!