how does an economic bubble\speculative bubble work?
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The misguided or false belief that a commodity will have a high demand in the future is the “speculation”, the growing number of investors who latch onto this belief in hopes of earning a profit is the “bubble”, the sharp decline in price as reality sets in and everybody starts dumping their worthless commodity is the “pop”.
The price only goes up on a speculated commodity for as long as there are investors entering the market on it, but there are not an infinite number of investors in the world, hence why the bubble can only grow to a certain point before it collapses.
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