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Economic Bubbles – Full Explanation and Examples Today (Video)
Since the mere fact that everywhere you look online today, or even in mainstream media commercials, all you hear about is a coming economic collapse, however, something that doesn’t quite add up is why the mainstream media pundits don’t seem to say much about the alleged coming collapse. For that reason, yesterday we covered: What Exactly Does Global Economic Collapse Coming May 2016 Mean (Videos)?
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In essence, what we keep hearing about is how the largest asset bubbles in history are going to burst, and cause a global financial crash of biblical proportions. Because of the destructive nature of asset bubbles when they burst, a logical question would be:
“WHAT ARE ASSET BUBBLES, AND HOW DO THEY FORM?”
The first video is done in a simplified manner to illustrate the concept behind asset bubbles, and the video does it masterfully. The video is clear, it’s quick, and the explanation is concise.
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Jeff Fitchett at Activist Post Writes:
There are tell-tale signs of bubbles. All throughout history bubbles have been formed, popped, a depression ensued and then another bubble formed. The characteristics of bubbles are very similar. Group think is one of the key components. Rational thinking is set aside as more and more people crowd into a purchasing frenzy to buy up a sought after item. The value of the said item rapidly increases in price and in the end the price collapses and humans suffer financial ruin.
In the 1600s, the Dutch experienced what is now called tulip mania. People flocked into buying tulip bulbs. The masses bid up the price of tulip bulbs to prices that were in some cases 10 times the income of a craftsman or worth more than acreage of property.
FREE DETAILED GUIDE TO SURVIVING ECONOMIC COLLAPSE OR MARTIAL LAW HERE
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The history of the South Sea Company is another example of an extreme bubble that occurred in the 1700s. England was deep in debt and had devised a plan to convert debt into equity of a newly created trading company: The South Sea Company. The idea was to create a company that would conduct trade in South America and use the profits to pay a dividend of 6% to shareholders. There was no reasonable prospect that trade would occur, but the company expanded rapidly and the share price moved significantly higher as a herd of people scrambled to buy shares. The bubble eventually popped and fortunes were lost.
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In the 1800s, Britain had passed hundreds of Parliamentary Acts to build railways. The masses bought the shares of railway companies and as the price moved higher so too did the number of people buying shares. Over a third of promised railway lines were never built and the bubble popped.
In the late 1990s, the Internet was becoming much more accessible to the greater population. Financial pundits and tech gurus described the tech sector as the “new economy.” Investors swarmed into any stock that was considered technology related. Initial public offerings were hitting the markets at an unsustainable rate. The valuations of companies, that had no revenue, skyrocketed. Eventually panic occurred and stock prices collapsed as investors sold off worthless shares of soon-to-be bankrupt companies.
The biggest bubble in human history is building right now. The first signs of this bubble occurred in the US mortgage market and it temporarily wrought havoc on the global economy in 2007 through into 2009. Instead of allowing the bubble to pop; central banks, cheered on by politicians and the media, printed money to keep the bubble from popping. In essence, the powers that be kicked the proverbial can down the road and have allowed the good times to continue for a bit longer. The bubble will pop and a depression will negatively impact our civilization.
In the second video, Harry Dent explains how the asset bubble phenomena relates to the pending crash we have coming, and where we went wrong!
THE FOLLOWING TWO POSTS FEATURE BOTH PETER SCHIFF AND DR. JIM WILLIE:
Dr. Willie and Peter Schiff Together: Total Currency Collapse and Reset Coming
Peter Schiff and Dr. Jim Willie Warn Investors About Timing Fed Market Rally
Jim Willie: How the Loss of the US Dollar as Reserve Currency Affects You Personally
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ALSO DON’T MISS:
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Ron Paul, Jim Willie, Peter Schiff, and Collapse of US Dollar on a Global Scale
The thing about bubbles is that the general population moves in concert, embraces fiction and literally buys into an unsustainable set of circumstances. The psychology of people is very fascinating. Insanity can be defined as repeating the same action over and over and expecting a different outcome. It’s interesting to note how people are corralled into joining the hype. In the early to mid 2000s there were many TV shows about flipping houses. All of a sudden, everyone was wanting to buy rental properties and fixer-uppers to flip. Mortgage standards declined in most countries and people who should not have qualified for getting a mortgage were granted access to mortgages. As you know, when the mortgage bubble popped; home prices collapsed in many countries.
FREE DETAILED GUIDE TO SURVIVING ECONOMIC COLLAPSE OR MARTIAL LAW HERE
STOP BY WWW.THELASTGREATSTAND.COM FOR SURVIVAL GEAR
Today, if you can fog a mirror, you can be approved for car loans, credit cards and lines of credit. We are bombarded with commercials from lenders that state: “No Credit Check, No Income Verification” “Contact Us For An Instant Loan.” Globally, governments are taking the lead and going further into debt. Western culture has become a “buy now and worry about the consequences later” society. The most concerning aspect of this bubble is that our entire way of life is based on debt. After all, fiat currency is created through the issuance of debt. We have robbed the future in an effort to enjoy the present.
When the good times end the piper will need to be paid. The unfortunate part for us is that it is impossible to pay back the mountain of debt that has been accumulated. Every country is dealing with too much debt within a system that has been corrupted to its core. We are about to be crushed under the weight of debt defaults and debt monetization. It doesn’t matter if we experience extreme deflation or inflation. The effect on the average person will feel the exact same. Either way we will struggle to provide the basic necessities of life. Few people will be able to profit and succeed in a world that is mired in depression and adversity. The luxuries we enjoy today will seem like a pipe dream from a bygone era as life continues to grind down into the abyss of history.
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After the intro lesson to how asset bubbles work, Jeff Fitchett at Activist Post begins to give a history of asset bubbles leading right up to where we are today. Mid-article, world famous economist Harry Dent gives a brief rundown of how what you’ve already learned applies to the situation we are in today, and then after Jeff Fitchett finishes his history of the deadly financial phenomena, Mike Maloney and Stefan Molyneux give a full in depth explanation of asset bubbles that goes much further into detail.
Mike Maloney should need no introduction, as he is the author of the world’s #1 all-time precious metals book Guide to Investing in Gold and Silver.
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FOR MORE GREAT MATERIAL FROM JIM WILLIE:
Ron Paul, Jim Willie, Peter Schiff, and Collapse of US Dollar on a Global Scale
Dr. Willie: US Markets in Terminal Phase of Economic Collapse… Extreme Pain Ahead
Dr. Willie: Economic System is Collapsing Right Now; Us Dollar in a “Short Squeeze”
Dr. Jim Willie: The Dollar is Dead! Even Mainstream Media Realizes it!
Jim Willie: Chinese Replace US Swift Banking System, Hastening US Dollar Collapse
Dr. Jim Willie – Secret Meeting at the G20 to Take Down the US Dollar
Dr. Jim Willie: Financial Deals Happening Behind Closed Doors; US Not Invited
Jim Willie: Putin, the Gulf Emirates, Iran, and Saudi Arabia Plan Death of US Dollar
Dr. Jim Willie: Economic Collapse is On Our Doorstep
Jim Willie: “The Quickening” is Approaching Global Economic Markets
Jim Willie: Both Our Allies and the American People Absolutely Hate Our Government
Jim Willie: U.S. Dollar is Now a Matter of National Security Due to Poor Decisions
Jim Willie, the Crumbling Global Economy, and the Dollar Crisis
FOR MORE GREAT MATERIAL FROM PETER SCHIFF:
Peter Schiff: “Trump’s Very Massive Recession May Have Already Begun”
Peter Schiff: Americans Fear Future With ‘Dead-End Economy, Crap Jobs, and Awful Wages’
Peter Schiff: “Can Donald Trump Really Make America Great Again?”
Peter Schiff: “China is Bleeding It’s Secret Account. Time to Panic!”
Peter Schiff: Newest Recession Hiding in Plain View; American Dream Is Dead
Peter Schiff: Dollar Collapse Will Be the Single Biggest Event In Human History
Peter Schiff: Obama “Peddling Fiction” As Unemployed Tops 100 Million People
Peter Schiff: Here Comes the Great, Great, Great, Great Recession!
Peter Schiff: “Whatever Obama Was Calling Recovery… is OVER!”
CNBC Actually Admits Peter Schiff Was Right… Again (Video)
Peter Schiff: Take a Good Look at the “New” American Dream!
Peter Schiff and Reagan Advisor: Complete Economic Collapse Immediately Ahead
Peter Schiff: Warning! Economic Storm Clouds Ready to Rain
Peter Schiff: Death of the US Dollar Is Imminent; Fed Out of Options
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