tag:blogger.com,1999:blog-5676200792504814374.post403680638749845372..comments2020-07-15T01:48:17.542-07:00Comments on Mickanomics: Rational ExuberanceUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5676200792504814374.post-72308663668823343122009-10-27T11:29:21.267-07:002009-10-27T11:29:21.267-07:00Your theory is non-sensical. Prices are paramount....Your theory is non-sensical. Prices are paramount. No amount of cultural irrationality will overcome scarce resources. It is only when the price system is broken are irrational purchasing decisions made.<br /><br />It may be that culturally everyone wants a Corvette. Due to this insane demand prices seem to rise every year giving the appearance that its a great investment model. (This goes along with your concept that if X heads in the same direction people will jump on the bandwagon) So long as the price system is un-altered though there will be no error in purchasing decisions. Despite the fact that everyone wants one not everyone will buy one as the price system will not allow them to. As a result X will never continuously go in a single direction for a prolonged period of time.<br /><br />Only when you remove the pricing system could your concept of Rational Exhuberance prevail. People will have the perception that they have the resources necessary to indulge. The kicker here is that prices are still being used, it's just that people are being lied to of what the "Real Value" is in relation to prices.<br /><br />The price system is Paramount. No amount of Rational Exhuberance will occur in a stable monetary system. Prices will deter people from it. <br /><br />You need to read up on the Marginal Theory of Value and you also need to actually read about the Austrian Theory of the Business cycle.beaonnoreply@blogger.comtag:blogger.com,1999:blog-5676200792504814374.post-41202343734591864022009-05-04T13:02:00.000-07:002009-05-04T13:02:00.000-07:00I rest my case !I rest my case !Nick Drewhttps://www.blogger.com/profile/13670594203660051701noreply@blogger.comtag:blogger.com,1999:blog-5676200792504814374.post-18647586581615885582009-05-04T08:03:00.000-07:002009-05-04T08:03:00.000-07:00Perhaps I should have made this point clearer. The...Perhaps I should have made this point clearer. The vociferousness or confidence of the non-believers is immaterial. The critical thing is the proportion of the potential house buying public that become non-believers that is the key. I believe that tracking this percentage would be a huge clue as to the timing. Sadly I don't know if any surveys giving this number were produced.Mickanomicshttps://www.blogger.com/profile/15474474764908992770noreply@blogger.comtag:blogger.com,1999:blog-5676200792504814374.post-1882425926234642362009-05-04T06:41:00.000-07:002009-05-04T06:41:00.000-07:00you haven't refuted Shiller's (3), we have little ...you haven't refuted Shiller's (3), <I>we have little clue of the timing</I>... and timing is everything !<br /><br />I know dozens of people who were 100% confident that the latter stage of the UK property boom was a bubble (including many who acted on this) - and there were whole websites devoted to it - <br /><br />but I know almost none who called the timing correctlyNick Drewhttps://www.blogger.com/profile/13670594203660051701noreply@blogger.com