Everyone knows that financial or housing bubbles are bad for any society’s economic health. Yet such bubbles brew all the time and spare no societies, regardless of whether they are poor or rich, authoritarian or democratic.
So why do bubbles keep occurring if they’re bad for society as a whole? Because they’re still good for a small minority—after all, if bubbles are bad for everybody, then it’s inconceivable that they’d be created in the first place. And at the moment, based on conventional measures, China is Exhibit A for anyone wishing to see a runaway housing bubble.
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