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I've never believed in the "speculators" argument. Either there's a market or there isn't. I believe bubbles rise and pop owing to the properties of Ponzi sch

I've never believed in the "speculators" argument. Either there's a market or there isn't. I believe bubbles rise and pop owing to the properties of Ponzi schemes, which rise and pop. When a market takes on Ponzi-like characteristics (usually not intentionally), that's when it becomes bubble-like. Any wealth-concentrating mechanism, capitalism itself included, is essentially a pyramid system, which needs increasing input from the bottom to keep going. Soon the bottom layer of the pyramid is so big there aren't enough new suckers to support it, and the whole thing collapses leaving everyone running for the exits.

laughfactory 9y ago
Except what it the "market" is other speculators? We're seeing this again now in major metropolitan areas, except now it's international speculation. Foreigners looking to park their money in more stable economies and willing to pay a premium to do so. Everyday people get stuck in the middle paying higher prices, which just inflates things even more. At this rate we'll get another housing crash, and a student loan crash. Banks love student loans because they're virtually guaranteed (no bankruptcy), and the government guaranteed return is substantial--far exceeding the actual return to the borrower (remember real wages have been stagnant for twenty years).