Thinking out loud...

let's remember that bubbles must have widespread public participation, right? And they must shore up asset values, right? Otherwise, what's the point?

If the government spends, say, 1 trillion dollars on infrastructure, by directly spending the money, then bonds have to be issued to finance the debt. This causes interest rates to rise, presumably. I can't see how this creates a bubble.

How is the government going to get an asset inflation of some sort going? I suppose they could "privatize" infrastructure and build a bubble that way...been done before with good result. I think EJ alluded to this in the interview in the form of a ten year government guarantee on energy investment.

Okay, now I am starting to see how this can work.