
Financial bubbles are inflated by investors who pile into an asset class with flawed assumptions. In most cases, these investors have unrealistic expectations for future appreciation and wouldn’t want to own the asset based on its cashflow alone. Such is the case with stocks, bonds, land, houses, tulips, and even gold. At some point, investors question their original assumptions on appreciation and start to sell. Of course, this causes any appreciation to stop, and even more speculators decide to exit. Further selling causes prices to fall which prompts even more selling that culminates in complete market capitulation and a crash [Read More...]











