Here's a simple example: I am offered zero downpayment, zero interest, deferred principle financing on whatever I want. As long as I am early to the party I am fine. With your proposal I would be notified in advance when the party is going to end. That means I am also informed that the party has started so I can jump on it even earlier. I am also more likely to make the decision to go for it because I have less uncertainty about when to cash in. In short, the bubbles would be steeper and the crashes would be much faster and thus take down more unrelated markets.
Actually your just wrong about that and the example I mention in the essay demonstrates it. I’ve spent 20 years studying these market phenomenon, and I know as much about it as anyone alive.
Asset bubbles don’t occur just because of low rates or cheap money. It’s a behavioral phenomenon specific to publicly traded markets. If my suggestion were implemented we would never see a situation where credit spreads got so tight because it would impossible to build a large enough consensus about future expectations to drive them there.
But I confess that one would really need to know an awful lot about how markets actually work to understand that at a glance.
If you’d like to learn something about it try reading “Knowledge and Decision” by Thomas Sowell, and the book I mentioned in the essay is also very good.