How to understand bubbles in the economy

Excessive growth of virtual capital.

A bubble economy refers to a macroeconomic situation in which the value of assets exceeds the value of the real economy, and it is easy to lose the ability to sustain development. Bubble economies tend to be supported by a lot of speculative activity, and due to the lack of support from the real economy, their assets tend to burst easily, hence the name bubble economy.

The bubble economy is often accompanied by the ups and downs of commodities, but the bubble economy is not the fluctuation of commodities in the general sense, but refers to the fundamental changes in the value of commodities after excessive concentration of social capital and excessive speculation caused by repeated sales of the same commodity.

For example, the big wolf and the Yan group are both selling baked cakes, one day, they began to buy each other's baked cakes, buying and buying to raise the ** from 1 to 50, people in the market saw that the price of the baked cakes kept rising, so they joined in a swarm, resulting in the crazy rise of the baked cakes, a baked cake worth only 1 yuan, sold alive to hundreds of yuan, and some people believe that it will go to **, this is the bubble economy.

Bubble economy refers to a macroeconomic state in which the value of assets exceeds that of the real economy and it is easy to lose the ability to sustain development. Bubble economies are often propped up by a lot of speculation and are essentially greedy. Due to the lack of support from the real economy, its assets are as easy to burst as bubbles, so it is called in economics"Bubble economy"。

When the bubble economy grows to a certain extent, it is often due to the bursting of market expectations or myths that support speculative activity, resulting in rapid asset value, which is known in economics as bubble bursting.

For example, the big wolf and the Yan group are both selling baked cakes, one day, they began to buy each other's baked cakes, buying and buying to raise the ** from 1 to 50, people in the market saw that the price of the baked cakes kept rising, so they joined in a swarm, resulting in the crazy rise of the baked cakes, a baked cake worth only 1 yuan, sold alive to hundreds of yuan, and some people believe that it will go to **, this is the bubble economy.

Bubble economy: the excessive growth of virtual capital and the continuous expansion of related transactions are increasingly detached from the growth of physical capital and the growth of the industrial sector, the financial and real estate sectors are soaring, and speculative transactions are extremely active. The bubble economy is based on financial speculation, resulting in a false prosperity of the social economy, and eventually the bubble will burst, leading to social and even economic collapse.

It's an economic phenomenon that's not real. The words are actually very vivid, they look very prosperous, but they are actually of no quality. To use an analogy:

I borrowed 100 yuan from the Bank of China, opened a small stall, and then used this stall as a guarantee to borrow 500 yuan from the China Construction Bank to expand the area of my stall, and then used this new store to borrow 1,500 yuan from the Industrial and Commercial Bank of China, rented a storefront, turned the stall into a commissary, and then used this commissary as collateral, and then Citibank borrowed 5,000 yuan to open a restaurant. It looks like I'm rich, but it's all borrowed! Mine is a classic example of a bubble economy.

If I earn and pay back the bank's money, the bank doesn't lose money. But if I go bankrupt, I won't be able to replace the bank's money, and I will end up losing the bank's ......That is, the ...... of the stateIf everyone is like me, it looks like a prosperous scene, but in fact it is an empty ......In the end, it is the state that pays the bill, and if the country cannot afford it, the country will go bankrupt, and then it will be the people who suffer. (The bankruptcy of the country means that everyone does not pay enough taxes, and in the end it is either an increase in taxes or a reduction in public facilities, and it is the people who suffer).