Roach points out that bubbles ARE busting Alex
Bubbles don't arise out of thin air. The fundamentals of supply and demand can certainly contribute to this phenomenon. But the true asset bubble — be it property, bonds, or the one we have all forgotten (equities) — is an unmistakable by-product of easy money. Carry trades and asset bubbles go hand in hand — they feed on each other. By sending the unambiguously clear signal that it is prepared to go slow in taking away the incentive for the carry trade, today's Fed is continuing its reckless strategy of condoning America's newfound asset-driven growth paradigm. This is the same approach that gave us Nasdaq 5000 a little over four years ago. And now it has mutated into a far more dangerous policy ploy. By digging in its heels and keeping the federal funds rate negative in real terms, the Federal Reserve has now pushed America firmly into a multiple-bubble syndrome. This is shaping up to be a policy blunder of epic proportions
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