Good writeup, completely agree. >My guess is that the bubble will burst soon after the Facebook IPO. Why? Because at that point, paying $1B for a company with

Good writeup, completely agree. >My guess is that the bubble will burst soon after the Facebook IPO. Why? Because at that point, paying $1B for a company with zero revenues will likely be the cause of shareholder lawsuits, and there will be a lot more scrutiny involved in these acquisitions. Since selling to Google or Facebook is the exit strategy for most of these SV startups, if that door closes, then funding will get pulled quickly and violently, and it will be the start of the next dotcom bust 2.0. Yes, another thing that would burst the bubble is the end of cheap money. The Fed's zero interest rates + debt monetization + QE + the Federal Government's massive deficit spending won't last forever. The end result will either be hyper/inflation, higher across-the-board interest rates, and/or a contraction of the money supply, or some combination. The latter two will definitely end this state of affairs you've described, maybe the former as well. The macro situation is ugly.