Rethinking The Bubble Of All Bubbles
from the bulbs-bulbs-bulbs dept
As long as we're revisiting our assumptions about the dot com bubble, it might be time to look back at another one of history's most infamous bubbles. A new book argues that the Dutch tulip bubble of the 17th century was not nearly as big of a deal as it's been cracked up to be (via Marginal Revolution). The book tries to dispel a number of notions, including the idea that tulip mania was a society-wide phenomenon. Instead, claims the book's author, trading in tulip bulbs was mainly confined to a narrow group of elites, who were interested in tulips as pieces of art, not as investments. Because not many people were involved in the tulip trade, the overall economic effects were fairly insignificant. Perhaps what's most interesting is the book's explanation for why the tulip bubble has come to be viewed as it has. Apparently, the main first-hand accounts of the mania were written by a few judgmental scolds, who sought to play up the absurdity of the tulip trade, and so subsequent histories have relied heavily on their accounts. However, even if this revisionist account is true, it still doesn't refute the idea that at one point, tulips were the subject of major speculative excess. It's also a reminder that not all bubbles are the same, since some are based on pure speculation, while others leave a lasting societal benefit.
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Tell That To The Casualties
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Wiser now
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Wiser now
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The Future...
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As usual, it's the Baby Boomers
Name a year when there wasn't a bubble forming or bursting since the late 1990's. It's essentially the same money chasing investment after investment.
What's the solution? Open up third world financial markets, which are notoriously restrictive to foreign investment. Especially, open up the market for our investment in India and China. These countries are relatively cash-poor and labor rich, compared to the U.S. They need the money and we need places to invest.
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It's a new paradigm
Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.
This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.
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