Here is a link to the full report and here is a section from it:
The increasing tendency for the US to enjoy longer economic cycles (see chart below), has been attributed by economist to successful economy policy intervention, mainly by the Fed. I. on the other hand, have described these cycles as perversions of nature, artificially extended by excessively loose monetary policies that created credit bubbles which inflated a combination of the economy and financial markets. Yes, the Fed can artificially lengthen the economic cycle and smooth volatility with loose money, but when the credit bubbles eventually burst, as they surely do, the economy is taken into a far deeper recession than if policymakers had just left things alone. This compunction to intervene to lengthen the cycle has dramatically increased the depth of recent economic busts, albeit not the magnitude of the boom, only its length. Despite my not being a laissez-faire Austrian Economist, this seems patently obvious to me from my observations of the US economy over the last three recessions, all of which have occurred because financial/asset market credit bubbles have burst.
The Federal Reserve in particular has stated it is aware of the risks to the economic expansion and is willing to do what is necessary to ensure it persists. This is quite different from what Alan Greenspan was saying in 1998 when he made his irrational exuberance speech.
The threat of a significant downturn in the economy resulting from higher leverage being unwound and debts going sour is nontrivial which is why central banks are eager to avoid that outcome. That suggests true bubble valuations are more likely to be seen before the next major decline.
The one possibility value investors never seem willing to contemplate is the potential for valuations to exceed the all-time peak. There is no doubt that the valuation reached in the late 1999s was extraordinary by any standard but we live in extraordinary times. Valuation metrics have fallen left and right in the bond markets
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