Quotes from Federal Reserve Chairman Alan Greenspan and his pending replacement, Ben Bernanke, on the difficulty of identifying when prices for stocks, homes or other assets become overly inflated:
"It is by no means evident to us that we currently have - or will be able to find - a measure of equity premiums or related indicators that convincingly presage an emerging bubble. Short of such a measure, I find it difficult to conceive of an adequate degree of central bank certainty to justify the scale of pre-emptive tightening that would likely be necessary to neutralize a bubble." Greenspan, Aug. 30, 2002.
"Aggressive bubble-poppers would like to see the Fed raise interest rates vigorously and proactively to eliminate potential bubbles in asset prices. To be frank, this recommendation concerns me greatly."
Bernanke, Oct. 15, 2002.