Financial bubbles are a shared speculative hallucination followed by a crash, and then a depression. They are manufactured by government, finance, and industry. Bubbles were once very rare, but now there is barely a pause between them.

The dot-com crash in early years of 2000 should have been followed by decades of financial soul-searching. Instead, even before the old bubble had fully deflated, the housing bubble began.

This great Harper’s article argues that the Internet and housing hyperinflations are only the beginning. There will be many more booms and busts, for without them the economy of the United States can no longer function. The bubble cycle has replaced the business cycle.

Click the link below to read a clear and fascinating analysis of bubbles, finance, and U.S. economics.

The author predicts that an alternative energy bubble is most likely the next one coming down the pike.