Stock Bubble Burst Essay Sample

Stock Bubble Burst Essay Sample

… up. Since most recessions are short anyway, there isn’t much time difference in having the lag time or just waiting patiently for the recession to be over.
“Bubble and Squeak”
What started our current economic problems? The amount of easy credit that the central bank was giving out in the 1990’s largely contributed to the problems with our economy today. The credit helped to sustain the rise of the stock market for a very long time. The problem was, the stock market was like a bubble, and when it finally burst, it made a real mess. If the central bank hadn’t have been so free with credit, the stock market wouldn’t have risen so high, but it would not have collapsed so hard, either.
Does low inflation really give financial stability? Apparently not. It was thought that was the case, but after the problems with the stock market, it seems that low inflation rates really have little to do with any kind of financial stability. It’s possible that low inflation may even make people feel overconfident about their financial future. If this happens, they will likely spread themselves too thin and really be in trouble …

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