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Strategies & Market Trends : Waiting for the big Kahuna

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To: Skeet Shipman who wrote (41909)7/19/1999 2:51:00 PM
From: Lazarus_Long  Read Replies (1) of 94695
 
How about both bubbles and economic "good times" are caused by loose monetary policy? The Fed has been in love with "liquidity" (=loose money and lots of it) for years now.

As far as the bubble causing misallocation of resources- -for every buyer into the bubble, there is a seller of the bubble. The seller may put his proceeds back into the bubble, or maybe not.

Bubbles are also times when lots of new companies start up and raise capital- -technically "correct" allocation of capital (although also often the creation of excess production capacity.)
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