What causes financial bubbles like housing or tech bubbles? How as a civilization would we stop them from happening?
Is it just a natural eb and flow of capitalism like the moon and the tides?
Pls respond
>>67290258
>What causes financial bubbles like housing or tech bubbles?
One of two things. Retarded bankers being retarded, or bankers being greedy retards.
>How as a civilization would we stop them from happening?
Destroy capitalism? They're pretty much a force of nature. Somewhat predictable, and very destructive.
>Is it just a natural eb and flow of capitalism like the moon and the tides?
They're more like the occasionally tsunami, than the flowing tides. Better hope your on high ground bucko.
>>67292286
Well bankers don't have to be the source. Even the lowly stock investor can be the source. The combined source just has to have a lot of economic power.
>>67290258
fractional reserve banking
you have much to learn
start with irving fisher and frederick soddy
>>67290258
nice, a topic that isnt identity politics or related bs
just adding a reply
>>67290258
Low interest rates for a sustained period with underperformance in other sectors, leading to a flow of capital and an unsustainable price rise.
>>67292286
>it's all bankers' faults
>it's all capitalism's fault
It's the combined greed of everyone. In the dotcom bubble, literal janitors were buying tech stocks. In the housing bubble, literal janitors were flipping houses.
The bankers enable this type of behavior by lending these retards the capital they need to speculate.
Eventually, people come to term with the fact that things are way too overinflated, and things fall fast.
And it isn't exclusive to capitalism; China has had several major bubbles in the past 20 years.
We re currently sitting on the biggest bubble ever blown. The derivative market bubble.... makes everything else look minuscule.
>>67292969
So would a tax placed on speculation reduce the risk of bubble formation?
>>67292741
>>67292969
>>67293286
All wrong. Money would still be debt and its existence would therefore be contingent upon contract, which can be defaulted on. Currently money is not cash; it is destructible via repayment or default on loan.
Inherent financial and price level instability is one of the myriad prices you pay as a society for allowing banks to create money.
>>67293286
No there has to be a whole other entity managing speculation risk in real time to provide risk management and to call out the bullshit
>>67290258
Bubbles are cause when the speculated value of something is higher than the actual value of something.
The way we stop it is by removing middle men from sales. Like estate agents speculating the value of properties, why not just approach someone willing to sell a property and make them an offer instead.
It is not the natural ed and flow of capitalism. It's the willful deceit of the buying public and businesses. The mentality taught to business men is to "get all the money" not a sustainable amount but all of it! That isn't how capitalism works.
>>67290258
>Is it just a natural eb and flow of capitalism
Yes, it's called the "business cycle".
>>67292969
Idiot.
>/pol/ talking about economics
>>67290258
High demand and low supply, combined with public and private sectors pushing/lying for increased spending/borrowing in hopes that the system /sector/economy experiencing the bubble will run just slightly longer than it takes for the system/sector/economy to completely implode and eventually coming to equilibrium. It's a giant gamble, but pretty easy.
t. Im an underwriter of corporate debt securities and CMOs employed by a investment bank you have probably heard of.
Is there anything that is bubbleless like certain types of technologies or resources?
If you have a home with no interest in selling or using it as an investment property, like using it as an actual home to live in, how do crashing housing bubbles affect you? How does it affect the monthly payments or insurance?
>>67293753
Maybe a third party entity moderating the on going transaction of certain markets like housing,tech,financial, etc.... where they are constantly monitoring data to give home buyers a " second opinion"
>>67294767
Gold, in my opinon is the closest thing to being bubbleless because you can liquidate it fast, and usually after a crash it skyrockets
>>67294767
Most investments you aren't forced to sell. A bubble bursting should have no affect on most investments unless you sell. If you own 5 shares of stock and the stock market collapses you still own five shares, they are just worth less. Gold, silver, pretty much every other investment works in the exact same way.
The hosing market however is different because of property taxes. They tax you based on the value of your home, so if the market crashes, your taxes go way down. That's why the housing market needs to be inflated. The government gets more money when houses are worth more. Really should be changed I think. Encourages people to keep shitty houses for cheap taxes and never improve their home. Encourages governments to interfere and create housing bubbles so they can make more money. Not good.
I personally think gold is a shit investment because it doesn't do anything other than sit in your closet while you hope the price goes up. Municipal bonds on the other hand build a bridge in your town and you get paid for helping to finance it. I like investments that do things.
