Bernanke: Central Banks May Need to Burst Asset Bubbles

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Federal Reserve Chairman Ben Bernanke said on Tuesday that central banks may need to resort to monetary policy to combat asset bubbles, although regulation should be a first line of defense.

"The possibility that monetary policy could be used directly to support financial stability goals, at least on the margin, should not be ruled out," he said at a conference at the Boston Federal Reserve Bank.
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More: http://www.moneynews.com/Headline/Bernanke-Central-Banks-Bubbles/2011/10/18/id/414889

So the Fed has been doing all it can to prop up the deflating asset bubble in real estate (mortgages). It's actions caused inflation in commodity assets. Now they want to mitigate the consequences of their primary actions.

They are picking winners and losers for the short term. In the long term, they are assuring that everyone will be a loser. $.02
 
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