I posted this in LBN as well. Greenspin ignored the last bubble, looks like he's going to do it again.
http://www.forbes.com/home_asia/newswire/2004/02/18/rtr1265822.htmlsnip>
Although consumer inflation remains very low, asset prices are surging again and investors are taking ever greater risks to make a buck, potentially creating other imbalances.
U.S. blue-chip stocks last week touched a 32-month high, helped by signals from Fed Chairman Alan Greenspan that he is in no rush to lift interest rates from 1958 levels. The housing market shows little sign of cooling and the premium investors demand to lend to companies is the lowest on record.
The Fed has ended up "with an economy addicted to rock-bottom nominal interest rates," said Stephen Roach, chief economist at Morgan Stanley.
The Fed decided not to tackle the 1990s stock bubble with higher interest rates, instead preferring to mop up the after-effects with a massive jolt of 13 rate cuts -- a strategy Greenspan declared "successful" last month in a burst of self-congratulation that critics warned was premature.