Another View of Economic Turmoil

Sadly, government policy responses — not only in the U.S. — are plainly wrong. It is not that the free market failed. The mistake was constant interventions in the free market by the Fed and the U.S. Treasury that addressed symptoms and postponed problems instead of solving them.

The bad policy started with the bailout of Mexico following the Tequila crisis in 1994. This prolonged the Asian bubble of the 1990s, because investors became convinced there was no risk in growing current-account deficits and continued to finance Asia’s emerging economies until the bubble burst with the start of the Asian crisis in 1997-98.

via Marc Faber Says the Federal Reserve’s Easy-Money Policy Caused the Global Financial Crisis – WSJ.com.

It started in 1994? Read the article – it’s a credible narrative.

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