Thursday, March 12, 2009
Some things never change – Excellent piece on boom and bust from 1897
He even explains leverage, housing booms and hpc. "during the prosperous times the demand for goods and property increases and soon the demand exceeds supply, and then prices advance....When prices of property and goods during a period of business depression are falling, the loss does not come on the entire property, but only on that portion of it represented by the cash capital the man has invested in it. The debt never shrinks until the real investment is all gone."