This is the most accurate post of all. Some of this had its genesis all the way back in Bretton-Woods, but mostly a Fed tinkering with, and thereby distorting, the TRUE price and availability of credit, exacerbated by government intrusion into markets, which causes inexorable bubbles and their subsequent deflation. Nothing political about this, other than the fact that, never before in history, has the Fed been less sovereign and more influenced by government.
The housing promotion machine that was Fannie and Freddie, the retirement homes for politicians on the Hill, had to restate four years of earnings back in 2000, and Franklin Raines lost his job over it. That was the first cockroach that should've been a warning sign that many more were lurking in the shadows and shadow banking system. And Greenspan, for all of his well-deserved criticism for faith in "rational" actors, was the only one yelling at Congress to rein in the GSEs as well as "off-balance sheet," Enronesque entitlements. But, at the same time, he was, of course, blowing the bubble to stave off the tech wreck.
At the end of the day, whether it's the Fed or well-intentioned intrusion into capital markets, the end result is always a bubble. And we are intentionally blowing another one with our massive quantitative easing; this time it's in sovereign debt and artificially propping up the dollar. Gold, as a harbinger of risk more than an inflation tell, is giving an early warning signal. But it make take years before the next, inevitable fall-out occurs.
I can remember sitting among a roundtable of our top strategists in 2004, and by any metric (we used about 30 of them) the housing market was desperately overvalued. I got short 18 months too early, but, in the end, it wasn't the wrong call. Rationality versus solvency, and here we go again... History doesn't repeat, but it often rhymes.