The current financial crisis would be the delayed result of a monetary policy that is permanently and unreasonably expansionary. The continued policy of low-interest rates, attached to financial innovations supported by the Ponzi scheme mechanisms, would be the source of troublesome underlying forces that allows subjects to arise from a crisis but accepts to enter another financial crisis, far along and in a different place.

It is the fight against the overwhelming effects of the technology bubble at the turn of the century, with excessive use of monetary expansion, which gradually produced the conditions for the crisis of the real-estate market in the United States during 2006 and 2007.

It is indeed the mixture of an excessively and durably expansionary monetary policy and the inevitable consequences of the Ponzi scheme, based on financial innovations, applied at structured products, which is answerable for the current market crisis.

This dynamic is therefore prompting, for the detonator, the expansionary monetary policy applied to fight against a past financial crisis. The conditions for its spread from one asset market to another are linked to financial innovations and Ponzi-scheme.

The financial crisis that occurred in 2007 was believed to be caused by an unreasonably expansionary monetary policy that had been in place for some time. This policy included low-interest rates and financial innovations that relied heavily on Ponzi scheme mechanisms. While this policy initially helped to combat the effects of the technology bubble in the early 2000s, it ultimately led to the crisis in the US real estate market in 2006 and 2007.

The combination of the long-standing expansionary monetary policy and the Ponzi scheme-based financial innovations in structured products is responsible for the current market crisis. The expansionary monetary policy was used to fight a previous financial crisis, but its continued use created conditions that allowed the crisis to spread from one asset market to another.

Central banks are now faced with the challenge of preventing a systemic crisis of banks while also avoiding the conditions that could lead to the next crisis. They must inject the necessary liquidity to prevent bank defaults and credit crunches, but they must also be careful not to reveal the conditions that could generate the next crisis.

In summary, the current financial crisis is the delayed result of a monetary policy that has been permanently and unreasonably expansionary. The use of financial innovations based on Ponzi scheme mechanisms has compounded this issue, creating conditions that allowed the crisis to spread from one market to another. Central banks must carefully navigate this situation to prevent future crises.

To prevent a systemic crisis of banks, central banks must inject liquidity to prevent bank defaults and credit crunches. However, they must also avoid revealing the conditions that could lead to the next crisis. In addition to short-term interest rates, economic policies can use other mechanisms to combat excessive leverage or asset price bubbles, such as higher reserve requirements on certain credit categories, management in the cycle of principal ratios of banks, and the taxation of certain capital gains.

The maintenance of an expansionary monetary policy that facilitates debt leads to the overpricing of assets in different markets, creating a speculative bubble that requires liquidity to feed the market through an expansionary monetary policy. In response to the newly emerging crisis of sharp corporate defaults, the US central banks, the Federal Reserve, and the European Central Bank have pursued very expansionary monetary policies, particularly in the United States to prevent a drying up of the credit market.

This policy, while avoiding the worst-case scenario in the short term, has led to about two years of the holdup, a strong outpouring in household debt, especially secured loans for real estate purchases, and then for businesses. The increase in everyday mortgage debt fuels demand in the real estate market, inevitably raising property prices. Monetary authorities must now take into consideration the relative development of indebtedness and prices of financial assets and properties, rather than simply regulating inflation rates in the market for goods and services.

In conclusion, central banks must be careful to prevent a systemic crisis of banks, inject necessary liquidity to prevent defaults and credit crunches, and avoid revealing the conditions that could lead to the next crisis. Economic policies can use various mechanisms other than short-term interest rates to combat excessive leverage or asset price bubbles, and monetary authorities must take into consideration the relative development of indebtedness and prices of financial assets and properties.