> But, in Kindleberger's theory, investors got over-excited about the economic changes the new technology brought about. They began seeing the sky as the limit.

> But, in Kindleberger's theory, investors got over-excited about the economic changes the new technology brought about. They began seeing the sky as the limit. They over-speculated on land near railroad stops, often borrowing from banks and racking up debt in the process. At some point, reality kicked in, and prices began to fall. Once prices fell, investors couldn't pay their debts, and that led to a crisis. It's a general pattern he finds repeated over and over in history. So, a bubble? Once the "overoptimistic" part kicks in I fail to see how there's any substantiative difference between the two scenarios. All markets grow on fundamentals til they don't, and when they don't you have a bubble. Sounds like people creating distinction where there isn't any to justify their "this is fundamentals" position. The article is a whole lot of noise about nothing. We are currently in a housing bubble, 100%. Add on top of that massive monetary inflation. To what degree the prices reflect the housing bubble or the increase in money supply, I don't know. But I do know the best thing that could happen is the bubble pop, because the alternative is much much worse.