Financial euphoria is fueled by the belief in perpetually rising asset prices from "summary" of A Short History of Financial Euphoria by John Kenneth Galbraith
The notion that asset prices will always go up is a powerful and dangerous force in the world of finance. It can lead investors to make risky decisions based on unrealistic expectations of perpetual growth. This belief in never-ending price appreciation creates a sense of euphoria that can cloud judgment and lead to irrational exuberance. When people are caught up in this euphoria, they tend to ignore warning signs and dismiss any evidence that contradicts their rosy outlook. They become convinced that the market will continue to rise indefinitely, and any dips or corrections are seen as temporary setbacks rather than signs of a bubble about to burst. This relentless optimism fuels a feedback loop where rising prices attract more buyers, which in turn drives prices even higher. This self-reinforcing cycle can cr...
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