atlantistowncrier.com

Industry Bubbles that Pop – Is anything original Today?

The market crisis dejour - throughout time, markets have experienced a crowd mindset. The more heated a market becomes, the more individuals want to buy in, and the higher the prices are pushed up.

This mindset has occured throughout history and the cycles can be observed consistently. Professor Watson teaches entrepreneur and the role of the market economy. Regardless of whether we want to analyze recent banking markets which have Broke, these events are not unique. They have consistently occurred throughout history.

One of the most well known historical markets that burst was Amsterdam's Tuplip sector. We can study the Tulipmania of the tulip market that burst in 1637 as a popularly reported historical account of a market that overheated.

Tulips were originally brought from Turkey in the early 16th century. As new "varieties" of tulips were discovered, competition intensified and their prices soared. One legitimately rare variety was the Semper Augustus which reached prices in excess of 1,000 florins per single bulb in 1623. This price exceeded more than six times the average annual income.

This economic mania continued - and 10 years later the value had increased another ten fold. At the market height, the value of a single Semper Augustus bulb reached 10,000 florins - the value of what it cost to purchase a house in central Amsterdam at the time.

Eventually the market peaked and there was no-one left who still wanted to buy these tulips at such high prices. Within months, the market price crashed and thousands of people were left in financial ruin.

Throughout time - we have seen similar bubbles develop. As the crowd continues to get more hyped, those contrary voices become less and less popular to be heard. Are any of the recent market bubbles any different? In modern environment of politically correct speech, are the contrarian voices that speak up for morality, ethics, and integrity any different? Throughout history, these contrarian voices have been demeaned and ignored. But the market for products and the market for principles has a way of always correcting itself from the heat of the crowd mentality - and those politically correct views tend to have their bubbles burst as the inevitable correction occurs. Today's market is no different.