Bubbles

Every bubble need a little prick

Everyone knows that bubbles and sharp objects are not a good mix. Bubbles are bad things in markets as we are learning, most of us at some cost. And so the thing that bursts the bubble is like bad tasting medicine – unpleasant but necessary.

Mr. McDowell, the erstwhile leader of the unlamented PD’s, is widely credited with having burst the Irish property bubble with his irresponsible comments on Stamp Duty, 5 months ahead of the last General Election.

What was the little prick for the global ‘credit crunch’ – what was it that caused everyone to stop and look and say ‘ I think I better think it out again’.

I believe that it was the arrival of Peak Oil. When oil got to 145$ a barrel then a whole lot of things that were possible at 50 were suddenly not so smart.

Then the credit and the credibility of the globalised market and banking system started to unravel.

And when credibility goes everything goes – as we now know.