What is it about asset bubbles that makes them so compelling? Why is it that when you're in the middle of the bubble it is no longer rational to resist the temptations of joining in the insanity even though you know you're risking more than you can afford to lose?
It seems as though asset bubbles wipe out any safe harbor. You have to enter the market because there's no place to store your value that's not in the market.
Asset bubbles make for insecure affluence by shifting the usual balance from security to affluence. Usually it is easy to find secure stores of wealth while it is hard to acquire affluence. In an asset bubble it is easy to acquire the wealth, it is just hard to find where to store it.
Given that all stores of wealth are being degraded, the only rational thing to do is to try to acquire as much affluence as possible, hoping that after the crash you're left with enough to get by on. 'Get rich quick' usually comes with 'it's getting harder and harder to stay rich.'
Along with mortgaging away the future for the present comes the problem of mortgaging away the present for the present.
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