Crash Course: Chapter 15 - Bubbles by Chris Martenson

Chapter 15 (Bubbles): Throughout the long sweep of history, the bursting of asset bubbles has nearly always been traumatic. Social, political and economic upheavals have a bad habit of following asset bubbles, while wealth destruction is a guaranteed feature. Four characteristics of bubbles are observed: that they are self-reinforcing on the way up (higher prices become the justification for higher prices); once they pop, the game is suddenly and permanently over; they are roughly symmetrical in time they take to peak and fall; and they are roughly symmetrical in price, returning to their pre-bubble status. Dr. Martenson concludes that the housing bubble is itself just a symptom of a credit bubble, leaving a final catastrophe of the currency as our most likely outcome.

http://www.chrismartenson.com

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[joejoe652]

At 7:00 that bubble was created by the Fed through increacing the money supply, lowering interest rates and manipulating the American people with a false sense of security. Why?? So when the bubble bursts we beg for Government help. Welcome Socialism goodbye Republic.

Read: "The Creature from Jekyll Island" by G. Edward Griffin 1994 He is either a psychic or a very smart man.

[kickndave21]

I think this may be a book on cd, and yes this guy does know about economics. Listen to all the chapters - its pretty good. BTW I have a degree in Econ, and although this isnt the easy answer, I think hes correct.

[candistyx]

I hope house prices plummet. I want to move out and my parents never want to sell their house.

[dj4monie]

@stocktradinginvestor What are you talking about? Socialism for the Rich, the Moneyed and Lucky is what is happening now. A Social Democracy like what's in much of Western Europe is for the people, not the Corporations or Banks. Greece will default on its debt, you watch. The Government wouldn't let the banks that made horrible bets fail and that is socialism or welfare for the rich, they f-up they get bailed out, you lose your job, house, etc, and you don't get sh*t.

[dj4monie]

@stocktradinginvestor That is only part of the problem. Structural change is needed because of other issues like people living longer and automation/robots replacing humans for most labor task. That will happen in your lifetime (if your under 50) by the time you retire you'll likely be among the last people to have experienced full time work. Work hours will be cut soon, you watch.

[dj4monie]

@gijs370 Gold is not a bubble. Smart investors run to stable investments. Gold has been used as money or capital for what a thousand years. You think because we went off the gold standard under Nixon and into a fiat currency nonsense that this modernize the money system? If so, when why did we need the financial modernization act under Clinton??? We never needed to go off the goal standard. The Government wanted to run up debt so it could fund its war machine.

[gijs370]

So explain why gold is not in a bubble? Same graphs.

[christo930]

How did the tulip bubble destroy wealth? I can see minor wealth destruction by diverting food producing land to tulip bulb production. But it seems to me that very few people get very wealthy and almost everyone else who participated loses their money. So it's really a wealth redistribution phenomena. Aren't there a lot of people, particularly people who would be watching this video, demonstrating the same mentality that other bubble participants demonstrated when it comes to precious metals?

[carlosZ1981]

Yes.

[4palacio]

is college the next bubble?



[stocktradinginvestor]

In a non credit economy, people would still sell other assets to get into the hot asset and suppress the price of other areas to get into the hot area, and that would have a very similar effect to borrowing from future earnings because they intend to buy back whatever other goods they sell in order to buy the hot commodity with future earnings anyway. The cheaper other things get as a result, the more leveraged a "cash" based economy would be until 100% of all cash is allocated towards it.

[stocktradinginvestor]

Bubbles still occur in any economy because capital tends to concentrate to the "hot" area. Bubbles always remain because human emotions always remain. The true solution therefore is not only a structural change to the system, but economical and financial training early on in people's lives to condition them to behave more rationally. In other words, financial and economic teaching in our school system