Does anybody remember why Allan Greenspan started decreasing interest rates ? Correct, he wished to boost the stock market.
Did it work ? Not at all. The fall of stocks just accelerated.
What happened next ? The real estate boom took off.
What was Greenspan's reaction to this unforeseen outcome ? He laughed at crazy investors: real estate is not a substitute for stocks because cannot be exchanged outside major metropolitan areas, he said
Did investors heed Greenspan ? Not to a slightest degree.
What did Greenspan continue to do ? To drop interest rates (in pursuit of boosting the stocks or just by intertia ? - I wonder).
What was he saying recently ? That his policy succeded in boosting US economy: GDP was growing ! (Solely due to the real estate boom and strong car sales thanks to the low interest rates, though. About consequences of such a boom everybody is fearful to think.)
How is it called in TRIZ ? Correct, pretending harm for boon. Principle #22. Oh, sorry, "Blessing in disguise", of course.
What is the remedy ? It is hard to tell now, but decreasing interest rates was definitely a mistake. It created an incentive for panicking people to relocate money from stocks to real estate and opened an outlet for such a move. Raising interest rates at that time could help. At least the escape hatch for money from stocks to real estate would be closed.
Would it exacerbate the recession (as proponents of decreasing interest rates argued)? Definitely not. Saturation, glut, and excessive capacity cannot be eliminated by making borrowing cheaper.
But what do now when money have escaped and a new bubble is upon us ? How to resolve this needlessly exacerbated economical contradiction ? Where are our TRIZ experts ?