I dare you to think about the horrors of a world with no bubbles.

Sir Frederic Mishkin wrote “Not all bubbles present a risk to the economy” November 11. I go one step further and hold that it is the absence of bubbles that would drive the economy into the ground, in just a few decades, and that what most drives the economy forward is precisely the probability of finding yourself a nice little bubble to float up on.

I dare you at FT to think about the horrors which a world with no bubbles would imply. Ah you want controlled bubbles? Are you going to use bubble rating agencies for that? Good luck! What I want are financial regulations that do not discriminate against risk and that are willing to risk the bubbles instead of embracing the certainty of staying on ground or even underground.

I do not want the regulators worry so much about the crisis, but instead worry about how to increase our possibilities that the bubbles takes us somewhere we want to go.

Balloons explode, don’t they?

It is amazing that so soon after having witnessed what disasters comes from having empowered credit agencies to put up their AAA signs showing the roads to no risk-lands Arvind Subramanian and John Williamson dare to recommend setting up zones for asset prices. “Dear I don’t think we should buy our house here because it has a 343 bubble rating. Perhaps I should look for a job in Toledo?”, “Put the puritans in charge of the punchbowl”, February 12.

There is nothing wrong for a central banker to keep an eye on assets prices such as houses to decide on monetary policies but if he wants to make any official use of it he should first make sure he does not own a house so as to be free of any conflict of interest but, more importantly, he needs to remember that bubbles, even though they might hurt when they explode, have a role to play in taking human and economic development forward.

A world without bubbles gets to be closer to a world without illusions.