Yes, raising reserve requirements would dry up free reserves, if raised enough. But AG doesn't want to end the party. He just doesn't want inflation to come back, and he doesn't want to inflate a bubble, he just wants to cool things off a little for awhile, IMO.
I'd like to pose a question to the thread: Fleckenstein and others claim that this market represents the biggest bubble in history. Now, some of the Internet stocks are clearly in bubble land, so are a few of the annointed Great Companies, like MSFT, CSCO, DELL, a few others perhaps, but, as a general matter, it doesn't seem to me that outside of these few areas we are in a "huge" asset bubble, a la Japan of the late 80s. Remember, the real estate of Tokyo was valued at more than the real estate of the ENTIRE US at that time. And that real estate was being used as collateral for loans for such economic activities as, e.g., building golf courses and buying Van Gogh paintings.
so what do people think, are we in the biggest asset bubble in history that will cause untold disaster in the next decade, or is this some of the bigger hyperbole in recent history at any rate? You can answer yes or no if you want. |
