The last financial crises of the 19th century

Brad DeLong has a reasonable capsule summary of the current financial crises, which he calls the last financial crises of the 19th century. It's true, this crises has its roots in Greenspan's excessive interest rate cuts after the .com bubble popped, but that happened in 2000, which would make it the twentieth century, no?

Two slides I'll point you to. The first is what Brad calls a "liquidity tsunami". As this blog has pointed out, "increasing liquidity" -- which means the government printing press increasing credit -- is by definition inflationary, and the inflationary forces the Fed has unleashed are quite extraordinary.

- $400B of treasury securities
- $500B via FNMA
- Guaranteeing the unsecured debt of every investment bank in the US

The goal of this money printing is to create a "leading sector", or bubble, to drive investment demand. I don't see anyone talking about what this leading sector should be, and if our last leading sector -- building houses no one wants in towns no one lives in -- lead us anywhere we wanted to be.