United States Now Prices Bubble
A bubble is a state in which deviation from valuation (fair price) or from normal levels becomes significantly large (upward).
(1) The 2000 stock price bubble
In 2000, stock prices were clearly deviating upward from the trend line.
It is referred to as the dot-com bubble, the internet bubble, the IT bubble, etc.
(2) The housing bubble
Next is the 2006 housing bubble.
Why did the U.S. housing bubble occur? An explanation considering the social background of the United States | Action
The background includes an environment conducive to purchasing homes, namely (A) low interest rate policy from 2000 to 2005, (B) a rise in subprime loan users.
(3) The price bubble
And now it is a price bubble.
The background includes (A) energy price increases due to the Ukraine conflict (crude oil, natural gas, etc.), (B) ultra-loose monetary policy and ultra-stimulus as measures against the COVID-19 pandemic, as well as related supply-chain disruptions from urban lockdowns. Transportation costs have risen, and wages have also risen.
Both stock price bubbles and housing bubbles collapsed (stabilized) due to rate hikes.
The price bubble is likely to follow suit. This time, it may bring about recession and stock market crashes as side effects.
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