Concentrating wealth in the hands of the few and deregulating financial institutions and practices lead to speculative bubbles that eventually burst - and that brings the whole country down.
Sentiment: NEGATIVE
We've suffered a 'Ponzification' of the economy in recent years, as bubbles have built up and then burst, and each time we act as though it's the first time.
Throughout the '90s and early 2000s, our financial industry and governments leaned on a snake-oil mirage of wealth creation, a bubble predicated on the obvious falsehood that things could only get better.
What we need to understand is, one, that there are market failures; and two, that there are things like asset bubbles and irrational exuberance. There are periods of booms, bubbles, and manias. These things, if left to themselves, can lead to crashes, to busts, to panics.
Monetary policy causes booms and busts.
The Nasdaq bubble and crash were followed by the real estate bubble then subprime crash, which led to the unprecedented printing of trillions of dollars in an attempt to prevent a global depression.
Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.
What most entrepreneurs don't understand is that it isn't the economy that bursts a bubble, but investor psychology.
I can live in a bubble, I like not to know anything about financials.
For us, whether the market is skewed from a bubble perspective or not really is mitigated by staying focused on what we do best.
We escaped the last big bursting of a bubble - the dotcom bubble - with a relatively light U.S. recession. On that occasion, the world economy found its way back on track fairly quickly.
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