Financial Crisis: Social, Political and Economic Upheavals

1125 Words4 Pages
As we know history has a habit of repeating itself. Throughout history we can see that financial crises have come and gone and come again. In order to answer this question we must first take a look in understanding what a financial bubble is, how it might form and the consequences we face due to the after math of the effects. Through the history of the United Stated our most recent Real Estate bubble is the largest economic crises to date. The bursting of asset bubbles has always been traumatic. Social, political and economic upheavals have a bad habit of following financial crises but wealth destructions can arguably be a guaranteed feature. While taking a look at our history we can see that bubbles would usually happen once every generation or so. Today we are recovering from a second major asset bubble. Housing spaced less than ten years from the dot-com bubble. This is astounding and unprecedented. So how do we know we are in an assets bubble, what do they look like and how can we expect one to occur in the future. The federal government notably likes to claim that you cannot predict when a bubble is going to occur until it actually happens but others would like to argue that this is not the case. This can be simply answered by looking at the definition of a financial bubble or otherwise known as an economic bubble or market bubble, which exists when asset price inflation rises beyond what incomes can sustain. This is a very important part to understanding
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