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Capitalism involves booms and busts.

I know I've said it before, but it bears repeating: Capitalism involves booms and busts.
There is a phenomenon known as the business cycle that loosely revolves around those booms and busts.
Bill Fleckenstein, January 14 2008

The policies of Greenspan and the Fed suppressed those busts, and "risk" was more or less struck from the lexicon of the English language (while linguists have pronounced "subprime" their word of the year).

If we stop attempting to bypass the creative destruction of capitalism, we will finally be able to bring about a recovery built on a solid foundation instead of the quicksand underlying the 2003-07 "recovery" that was built on the housing mania.

Indeed, as Stephen Roach wrote in last week's Financial Times (read "America's inflated asset prices must fall"): "The U.S. body politic is . . . underwriting massive liquidity injections that produce another asset bubble and proposing fiscal pump-priming that would depress domestic saving even further. Such actions can only compound the problems that got America into this mess in the first place."

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