Federal Reserve who created the housing bubble, by creating the technology bubble, by bailing out a Wall Street hedge fund. To add more ice cream to this dish, let’s not forget the central banks role in the Asian crisis, the Mexican crisis and the savings & loan crisis. As you can see, these are not one-hit wonders, and sadly the Fed’s Greatest Hits are anything but great.
Certainly, the stock market has recovered – and this is exactly what the US Federal Reserve wanted. At the time, they read somewhere that if people “feel” wealthier, they’ll borrow and spend more. Simple enough, all they had to do was to make people feel wealthier and when it comes to wealth in America, there’s no better barometer than the stock market.
One can see that as the Federal Reserve printed more and more money, the stock market increased more and more as well.
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