I have pondered this as well. I generally believe that recessions will happen less frequently and will be less severe. However I don’t believe it is due to the Fed and other CBs injecting money. I think it’s because the U.S. economy is much more diversified today than 20…30…50…100 years ago. It is less likely that a slump in one industry will bring down the whole economy like it would have in the past. What’s more, globalization has added to the economic diversity.

Still, I believe we haven’t seen the worst of the impact on the economy from the housing slump. I’m hoping prices in San Diego drop 50%. This is likely to bring a recession but no where near as painful as the ones in the 70s or early 80s.