Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (261003)	4/8/2008 5:52:40 PM
From: Sun Tzu	Read Replies (2) \| Respond to of 281500

Every great bubble is based on solid economic fundamentals. These fundamentals are the result of large and sustained demand for the product. A basic tenet of economics is that all else equal, an increase in price will bring about a decrease in the quantity demanded. A bubble is formed when the prolonged sustained high demand changes market psychology such that the demand increases simply due to the expectation of further future increases. Tulips are native to Western Iran and Eastern Iraq. They were introduced to Europe by a Dutch merchant. Therefore the supply of tulips was extremely limited. I have actually heard of academic thesis that said the tulip mania was mostly justified by fundamentals of the era. In case of housing, I think it originally attracted money because in the aftermath of dot-bomb era, real estate was seen as the best place for the huge liquidity that had been created in the previous years. Businessweek should fire whoever who said bubbles are technology driven and instead license my explanation above <vbg> ST