A bubble - however little we may know about its very intrisic and chemical composition - certainly bursts. It is first born, develops itself with the help of our fellow men (and their respective lungs), and then explodes, showing us something that we should already know, that is, that they are empty on the inside.
No one knows for sure what caused the Great Depression. Some say that it was because of the stock market crash, some argued that a draught in Mississipi had something to do with it. We could go to a many different economists and get as many different answers as there are to deep philosophical questions such as "Why did the chicken cross the road?" What we might be able to say, and - have - an answer in common from all of those economists might be the lack of regulation and a contraction of the money supply by the US Federal Reserve. Right after the Great Depression, banks were tightly regulated, and both parties were happy, the free marketeers and the 'regulatories'. However, as the years passed and the country got richer and richer, the leashes were let loose, and any bubble, monetary bubbles, I say, that were accompanied by unending equations to justify them, weren't taken too seriously. Internet, Real State, War, and so forth. And History rhymed, as Mark Twain told us.
In the XIX century, Great Britain was the great superpower, and many, like us, believed that their empire would last forever. To their disdain, the U.S. rose as the great and massive power of comsumption that we know today. Sooner than we think, the unfortunate might happen, and the batoon could be easily passed to China, not as a power of consumption, but as a power of production, giving them not only more stability, but also longevity.
Let there be light.
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