Bernanke Says Regulators Should Stop Future Bubbles Before They Happen

Ben Bernanke in remarks release this morning by the Federal Reserves, concludes: Monetary policy isn’t to blame for the real estate bubble; rather blame all those crazy “exotic” mortgages for the speculative excess in real estate.

Ben Bernanke in remarks release this morning by the Federal Reserves: “For a time, rising house prices became a self-fulfilling prophecy, but ultimately, further appreciation could not be sustained and house prices collapsed. This description suggests that regulatory and supervisory policies, rather than monetary policies, would have been more effective means of addressing the run-up in house prices.” In short, he concludes: Monetary policy isn’t to blame for the real estate bubble; rather blame all those crazy “exotic” mortgages for the speculative excess in real estate. For an opinion on this, go to VonAldo.com.

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