Exact(2)
Even if inflation in the prices of goods and services remains lower than in the 1970s, overly lax monetary policies will fuel bubbles in house prices or equities in many countries.
In good times upgrades fuel bubbles; in bad times downgrades automatically send markets spiralling.The obvious solution is to strip the rules of references to ratings where possible, so that the market, rather than a government mandate, determines the extent of their use.
Similar(58)
The Fossil Fuel bubble is small compared to the climate change bubble.
The math is clear: there is a fossil fuel bubble.
If the world economy is going to come into better balance, with fewer vast sums of money sloshing around the globe fueling bubbles like the ones that imploded disastrously in 2008, it will be in part by getting that number up over time, and there has been progress.
8.25am BST House price rise fuels bubble fears More now on today's house price story and George Osborne's attempts to allay fears the UK is headed for another bubble.
The ECB president also told MEPs that monetary policy would remain "accomodative", but cautioned that a long period of low interest rates could fuel asset bubbles.
Fed purchases should help America's economy by pushing asset prices up and the dollar down, but they may lead to a damaging rise in commodity prices and fuel asset bubbles in emerging economies.
A "reverse supply shock" that resulted from the sudden emergence, especially in the 1990s, of the productive potential of enormous, previously walled-off populations from Eastern Europe to Latin America to East and South Asia, helped fuel successive bubbles.
If continued capital inflows fuel asset bubbles and raise domestic liquidity, central banks will raise the bank reserve requirements, conduct open-market operations and implement measures directly targeting the asset markets during the second half of 2009 and early 2010, before they start hiking interest rates.
That fuels property bubbles and makes housing unaffordable for many Chinese families.
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