An economic bubble or asset bubble (sometimes also referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania, or a balloon) is a situation in which asset prices appear to be based on implausible or inconsistent views about the future.
What is bubble money?
What Is a Bubble? A bubble is an economic cycle that is characterized by the rapid escalation of market value, particularly in the price of assets. This fast inflation is followed by a quick decrease in value, or a contraction, that is sometimes referred to as a crash or a bubble burst.
What causes a financial bubble to burst?
The price bubble is no longer sustainable without additional injections of new money (or credit) by the central bank or monetary authority. The bubble then begins to deflate. When the flow of new money stops, or even slows substantially, this can cause the asset bubble to burst.
What does a bubble mean in the stock market?
A stock market bubble—also known as an asset bubble or a speculative bubble—is when prices for a stock or an asset rise exponentially over a period of time, well in excess of its intrinsic value.
What does bubble burst mean?
said to mean that a situation or idea which was very successful has suddenly stopped being successful. The bubble has burst. Crowds at the teams World League games are down from last years 40,000 average to 22,000.
What happens if the stock market bubble bursts?
What happens when a stock market bubble bursts. All stock market bubbles eventually burst, meaning that stock prices suddenly and sharply decline. While any number of events can lead to a market bubble bursting, crashes often occur after a key source of credit dries up.
What causes market bubbles?
Bubbles occur when prices for a particular item rise far above the items real value. Examples include houses, Internet stocks, gold, or even tulip bulbs and baseball cards. Sooner or later, the high prices become unsustainable and they fall dramatically until the item is valued at or even below its true worth.
What causes bubbles in water?
Atmospheric gases such as nitrogen and oxygen can dissolve in water. When you draw a glass of cold water from your faucet and allow it to warm to room temperature, nitrogen and oxygen slowly come out of solution, with tiny bubbles forming and coalescing at sites of microscopic imperfections on the glass.