If you’ve ever wondered how Fed Chair Ben Bernanke adopted his current economic philosophy, you may want to look back to the year 1979, when the young Bernanke was just starting out at Stanford University.
As the New York Times notes, Bernanke as a young professor, felt a strong aversion to asset price inflation. More than thirty-years ago, the young economics student/professor had this to say about Fed intervention:
In a speech, he recalled that he and his wife, Anna, had rented a house with friends because he was certain that local real estate prices would fall. Instead, prices in the Bay Area doubled, then doubled again. “Since then,” Mr. Bernanke told his audience, “I’ve developed a view that central bankers should not try to determine fundamental values of assets.”