The economy has always had cycles and always will. The lengths, highs and lows are always different for each cycle. While these cycles can be extended and down cycles can be alleviated by artificial means, excessive interventions always have a price to be paid.
The Federal Reserve was originally instituted to reduce the caustic downside of economic contractions. In current times, it appears that it is being pushed by Wall Street and the Politicians to keep the economy on a constant upstroke. Wall Street wants the economy to be artificially kept high to keep them making money. Politicians want it high because the populace spuriously associates legislative actions with economic prosperity.
Like many things in life, there is an equal and counterbalancing force for each action. The counterbalancing force for driving the economy to stay artificially higher with fiscal and monetary tools is inflation. We're beginning to see clear signs of this in the American economy.
With all the fiscal and monetary tools exhausted, how will the "boomerang" effect of keeping the economy artificially "on high" be dealt with? I don't know, but I do know there is always a price to pay.
Be smart, be well-read, be aware and be successful.
