Wednesday, November 11, 2009

2003 Redux

clipped from

Nov. 11 (Bloomberg) -- Imagine you are a central banker.
You arrive at the office each morning and scan the daily
financial pages and newswires. You read that markets -- stocks,
junk bonds, gold, oil -- are positively giddy due to “all the
liquidity sloshing around that has to go somewhere,” or
something to that effect.

That would be the liquidity you created.

You may be starting to feel pangs of anxiety before you’ve
had that first cup of coffee. You know from your crash course in
economic-survival medicine that cleaning up after a burst asset
bubble isn’t as easy as it sounds.

Surely there’s a better way than orchestrating alternating
periods of asset bubbles and busts.

“It’s 2003 all over again,” says William White, chairman
of the Economic Development and Review Committee at the
Organization for Economic Co-Operation and Development in Paris.