away as the market gathers steam, and— and resign any responsibilityfor moderating— a bull market that may get out of control as we sawin '98 and '99 with Alan Greenspan, as we saw in the housing market.And— I fear that the market will continue to rise. It will becontinuously speculative. After all, when you can borrow at a rate thatis negative after adjustment for inflation, it's not surprising that youwould borrow a lot.
So, what are the implications of— of this constanteasing and stimulation? You know, it— it seems the numbers are somind boggling: $600 billion here.
They— they (CHUCKLE) are mind-boggling.
You know? (CHUCKLE) But, give us the—
The consequences are you get boom and bust. You—stimulate in '91. You let it get out of control. You have this colossaltech bubble in '99. Sixty-five times earnings for the— for the growthstocks. Then you have an epic bust. Then, of course, they're panicstruck. They race back into battle with immense stimulus withnegative real rates for three years.And you get another— rise of risk taking and everything risky—prospered in '03, '04, '05, '06, '07 until we had what I called the firsttruly global bubble. It was pretty well everywhere in everything. Itwas in real estate. Almost everywhere. It was in stocks absolutelyeverywhere. And— and it was in the bond market to someconsiderable degree.And that, of course, broke. They all break. That's the one thing theycan't control. You can drive a market higher and eventually — of itssheer overpricing, it will eventually pop. And, typically, it seems topop at the most inconvenient time. So, we're going to drive this oneup, and this time there isn't much ammunition. In 2000, the Fed hada good balance sheet. The government had a good balance sheet.In '08, it was still semi respectable, and— and now it's not. It's notvery respectable at all. So, what are they going to use as ammunitionif they cause another bubble and it breaks, let's say, in a couple of years? Then we might have some real Japanese-type experiences.