economic cycle
TRANSCRIPT
THE HOUSING BUBBLE
• Houses were built that were too big and expensive for the families that owned them
• Grocery stores and employment centers were too far away; driving there took up too much gas
• Suddenly the price of the home combined with daily transportation made it all too expensive
• Other industries were sucked in too: plumbing, electrical, construction
THE TECHNOLOGY BUBBLE
• Occurred at the turn of the century
• The market was not ready for all the websites and software products at once
• A great deal of the software was dysfunctional; it was not yet perfected
EXPLOSION
AMERICA’S BANKS WERE PROVIDING NECESSARY FUNDS FOR THE HOUSING AND TECHNOLOGY BUBBLES…. UNTIL THEY COULDN’T
CRISIS
• A crisis is a great time for reconstruction
• Crashes and reconstruction are all part of the business cycle
• This cycle of bubbles, banks overprinting money, and resulting in a crisis is repeated throughout history
RIPPLE EFFECT
Overproduction of money is similar to throwing a stone in a pond. The
ripple affects the whole body of water.