Bubble and Human Life

The bubbles inflated in every cycle of economy have always caused damages at the time of bursts. More and more economists have to accept that the markets are not rational in nature and principle. It is because people are invovled in every market and they make decisions in every second in trying to earn the best advantages. Most people claim that they have applied rational thinkings and every kind of advanced models to make judgements in all sorts of investment. However, it turns out that all these decisions are at large part come from their basic instincts or feelings which are irrational and not predictable. This kind of behaviour is fully reflected in the crisis.

When millions of people act together in one society, the outcome is highly unpredictable. At most of the time, they have herd instinct to follow the so-called successful leaders. Of course, at the start, they will try to find out who is most successful and spend time to observe. Then, when a large group seems to be more successful than the others, the remaining mass will exercise the instinct to follow suit. Their decisions will then be decided by the basic human nature rather than reasonable calculations. This is the stage when the bubble is inflating and its appearance is most beautiful. At such time, people have the thought that everything is so perfect that world is having no problem and there are endless happy days forever. From old thinking, this is the time when the party is to end.

From the above observation, people can see that no matter how the bubble is damaging, it cannot be avoided because the bubble is part of human nature. It is what we want to be exciting and wonderful in our life.

To be fair, without bubbles, life is very boring to most people whom would prefer to die young.

To get rid of the bubble is meaningless at all.