The Motley Fool writes in USA Today that the Fed pushing up stock prices is not a bubble because the price rise is a rational response to a lack of good investment alternatives. Bubbles, Maxfield writes, only exist when the rise is irrational, not based on good data.
Maybe so, but what happens to stock prices when the Fed eventually has to raise interest rates dramatically to fend off inflation? Answer: they go down as people who prefer certainty of income move money from equities to bonds. Maxfield admits prices will go down, but says that a correction isn't a bubble bursting.
Whatever ... it seems like a distinction without a difference to me, but I freely admit I'm no expert.
