There Must Be A Bubble Somewhere

  • When asset bubbles emerge, many point to central banks as the culprit.
  • Today, people point to the shale credit as a bubble, “caused” by the Fed.
  • While interest rates are a factor, they’re not usually the most important. Decisions about credit remain the domain of private parties, based on private assumptions and calculations.
  • And central banks shouldn’t target asset prices with monetary policy tools, risking significant collateral damage in the economy to reign in speculators on Wall Street.

There Must Be A Bubble Somewhere | Seeking Alpha