Saturday, August 15, 2009
Bubbles beget Bubbles: The great Wine Bubble
A financial system out of control begets a housing bubble. But little attention is paid to the fact that a housing bubble by itself cannot cause economic hardship/ruin. It must, by definition 'infect' an entire economy (national and/or global). It does this by creating bubbles in other industries. A housing bubble makes people richer (artificially), and this richness leads to other spending of fancy which leads to other bubbles...like the great wine bubble of the 2000s. There is certainly a correlation here.
Cite: "Wine Spectator" magazine, Sept 30, 2009 issue