Speculation drives asset bubbles from "summary" of The Money Culture by Michael Lewis
In the financial world, there exists a phenomenon where speculation plays a significant role in driving asset bubbles. These bubbles are essentially market distortions that occur when the price of an asset becomes disconnected from its intrinsic value. Speculators are individuals who enter the market with the sole purpose of making a profit by buying and selling assets at opportune times. When speculation intensifies in a particular market, it can create a self-fulfilling prophecy. As more speculators enter the market, the demand for the asset increases, driving up its price. This increase in price can attract even more speculators who are drawn to the prospect of making quick profits. In this way, speculation fuels a cycle of rising prices that can eventually lead to an a...
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