In contrast to the other two psychological causes, speculative contagion has a natural end. A speculative bubble, sustaining itself solely by reaction to price increases, cannot go on forever.

Third, and no less important, is the speculative contagion that underlies any bubble. The current boom has seen contagion

NEW HAVEN People frequently ask me, as someone who has written on market speculation, where the next big speculative bubble is likely to be. Will it be in housing again?

One problem with the word bubble is that it creates a mental picture of an expanding soap bubble, which is destined to pop suddenly and irrevocably. But speculative bubbles are not so easily ended indeed, they may deflate somewhat, as the story changes, and then reflate.

On the other hand, in some places, a speculative bubble is fueling today s boom in vacation home prices. The vacation home boom appears psychologically tied to the urban home price bubble in many of the world s glamour cities, and prices of these vacation homes are similarly vulnerable to a significant drop in coming years.

Taming Speculative Capitalism

This means making capitalism work better, and making it clear that there is no threat of protectionism. But the rationale must be to get the world economy out of its current risky situation, not to propel us into yet another speculative bubble.

Monkey Bubble

Frozen Bubble

Bubble Spotting

Bubble Trouble

Silence can be presumed to be tacit acceptance that rapid increases in long term asset price are warranted. National leaders must speak out, and they must match their words with concrete actions, to help signal to the public that the speculative bubble cannot be expected to continue.

America s Education Bubble

While the government has assembled considerable firepower to limit the unwinding of a spectacular bubble, the overhang of highly leveraged speculative demand is disconcerting. Indeed, in the 12 months ending in June, margin financing of stock purchases nearly tripled as a share of tradable domestic equity market capitalization.

Monkey Bubble Arcade Game

Each country's a bubble.

Letting China s Bubble Burst

NEW HAVEN You might think that we have been living in a post bubble world since the collapse in 2006 of the biggest ever worldwide real estate bubble and the end of a major worldwide stock market bubble the following year. But talk of bubbles keeps reappearing new or continuing housing bubbles in many countries, a new global stock market bubble, a long term bond market bubble in the United States and other countries, an oil price bubble, a gold bubble, and so on.

Can you see the bubble?

The Great Emerging Market Bubble

Israel s Election in a Bubble

Frei Otto was starting to use foam bubble diagrams and foam bubble models to generate his Mannheim Concert Hall.

In the view of Iraq, the claim unit is overly speculative.

And just like that, the bubble burst.

The Gold Bubble and the Gold Bugs

We had the bursting of the tech bubble.

A new bubble will replace the old one.

Maybe the word bubble is used too carelessly.

Every bubble is a country. The size is population.

The size of the bubble here is the population.

And the size of the bubble is the population.

So we basically turned the box into a bubble.

So, what should this brief Palin bubble teach us?

So we live on the most fragile, little soap bubble you can imagine, a very sacred soap bubble, but one that is very, very easy to affect.

But if owners of oil reserves think that prices will fall in the long run, they gain an incentive to explore for oil and expand production now in order to sell as much oil as possible before the fall. The resulting supply surge drives down prices, reinforces expectations of further declines, and produces the inverse of a speculative bubble a collapse in prices.

On the other hand, the estimate of the amount required would have to be speculative.

You can see how China is the red, big bubble.

We can say, Well how fast does the bubble burst?

Nicolas Sarkozy, the leading contender in the French presidential election, recently lashed out against what he called speculative capitalism, and says he wants to moralize the financial zone created by the euro. What does Sarkozy mean by speculative capitalism?

In my view, bubbles are social epidemics, fostered by a sort of interpersonal contagion. A bubble forms when the contagion rate goes up for ideas that support a bubble.

But it was a bubble and a highly leveraged one at that. While periodic bubbles may be unavoidable, and no bubble is without consequences, a highly leveraged bubble tends to cause far more damage, owing to its impact on the real economy and the duration of the deleveraging process.

2D game inspired in Bubble Bobble, Snow Bros and Tumble Pop

And look here when I take you into my bubble graphs.

Alan Greenspan, the former Fed chairman, recently said that he now believes that speculative bubbles are important driving forces in our economy, but that, at the same time, the world s monetary authorities cannot control bubbles. He is mostly right the best thing that monetary authorities could have done, given their other priorities and concerns, is to lean against the real estate bubble, not stop it from inflating.

Japan s ultra low interest rate policy was initiated in the 1990 s to put a floor under the economy following the bursting of its asset price bubble. However, over time these ultra low interest rates have promoted a highly speculative financial carry trade speculators borrow yen at low interest rates and then buy dollars and other currencies that are invested in higher yield assets elsewhere.