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i just got through reading an e-book version of "A Bubble that broke the world" by Garrett that is available at fraser books.

The essential thesis of this book, originally published in 1932, is that there are fundamental processes that create financial bubbles. First, there must be a multi-year period of rising prices with no let-up. Second, the concept that one may be able to build wealth through investment changes to a belief in outright entitlement (if i hold it long enough i will definitely make money). Third, the most recent period of prosperity is thought to be predominately a result of a new economic paradigm rather than cyclical forces or credit expansion. And finally, credit is adopted as a panacea for debt, that is, debt levels are rationalized by the notion that credit will be available for refinancing and restructuring if and when necessary.

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