One of the greatest blunders in the history of financial bubbles is not a policy error that inadvertently forces a collapse. Instead the real blunder is celebrating the old theory that some agency can prevent financial setbacks and recessions. In various forms it dates back to the early 1600s. And great expectations have surged this summer -- again. Quite likely part of the usual setup to a contraction.  Bear markets are inevitable and are consequent to a frenzy of speculation. And the next will be very embarrassing to the establishment. Boasts of the past that bad things can be prevented by spending trillions of taxpayers’ money will haunt. Historically, financial dislocations precede the hard times of a recession. Indeed, the original promoters of the Federal Reserve System knew this but believed that the “lender of last resort” would prevent recessions. In the 1960s, this was enhanced by macroeconomists armed with mainframe computer “models.”...(Read Full Article)