It wasn’t housing itself that caused the 2008 bubble. If it hadn’t been housing, it would have been somewhere else that easy credit was flowing to. The continuing rise of debt that cannot be paid back was at the heart of the housing crises and will be at the heart of the next crisis. A bubble pops when people wake up and realize that the debt can never be paid off. At that point, credit is removed—and because easy credit was the main thing causing the run-up, assets collapse. It is what led to the bubble in technology stocks in early 2000s. It is what led to the crisis in Greece and to the
...more
