"Speculative manias gather speed through expansion of money and credit. Most expansions of money and credit do not lead to a mania; there are many more economic expansions than there are manias. But every mania has been associated with the expansion of credit. In the last hundred years or so the expansion of credit has been almost exclusively through the banks and the financial system..." (Kindleberger, Manias, Panics and Crashes)
Central banks in the West have kept interest rates at absurdly low levels for more than 6 years, during which there has been regular economic growth and declining unemployment rates almost everywhere. They should have started raising rates years ago, and they likely know it. They have almost exclusively caused irresponsible borrowing and associated asset bubbles in equities, bonds and real estate across the planet.
Anyone can read Kindleberger. The question central bankers will have to answer after The Great Collapse that is looming will be why they could have been so utterly blind to the clear and completely predictable outcome of their policy? Sometimes smart people just do not "get it". This is one of those times.
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