3 ms·

Not if it's run on market principles.

• Ekaros 5y ago
  I wonder if they were actually run on market principles would crashes be so bad or big? Or more of corrections of certain sectors.
  • actually_a_dog 5y ago
    I don't think so. The problem is that there's always going to be some amount of speculation in a market. And, it's really speculation that drives prices up beyond what they really "should" be, which eventually leads to the correction. If the speculation goes on too long, and drives prices up too high, then you have a "crash." And, absent regulation to the contrary, there's nothing preventing the market from rising too high, too fast (i.e. the market can remain irrational for arbitrary lengths of time, to paraphrase Keynes). OTOH, there doesn't seem too be a sensible way to determine what constitutes speculation, for purposes of constructing a regulation that prevents it.
    • actually_a_dog 5y ago
      Whoops. I meant "I do think so" in the first sentence.