By Tyler Durden
Authored by Mike Shedlock via MishTalk,
Buffet explains bubbles: “People see neighbors ‘dumber than they are’ getting rich.”
Warren Buffett explains Why Bubbles Happen
Buffett was asked by CNBC’s Andrew Ross Sorkin if he is worried another crisis will happen again.
“Well there will be one sometime,” Buffett said in an interview for CNBC’s “Crisis on Wall Street: The Week That Shook the World” documentary. The documentary airs Wednesday night at 10 p.m. ET/PT.
“People start being interested in something because it’s going up, not because they understand it or anything else. But the guy next door, who they know is dumber than they are, is getting rich and they aren’t,” he said.
“And their spouse is saying can’t you figure it out, too? It is so contagious. So that’s a permanent part of the system.”
That last paragraph perfectly explains Bitcoin. Most of those investing in cryptos have little idea how they work, or what they are even buying.
Buffet made no mention of the corporate bond bubble, the equities bubble, or even the crypto bubble. He does not see any bubbles now, at least that he mentioned.
Symptom or Cause?
Buffett confuses a symptom (rampant speculation) with the true cause
The Fed (central banks in general), …read more
Source:: Zero Hedge