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{{See also|Austrian predictions}} | {{See also|Austrian predictions}} | ||
The '''[[Dot-com bubble]]''' and its bust was foreseen by several Austrian economists.<ref name="Thornton_Bubble">Mark Thornton. [http://www.independent.org/pdf/tir/tir_09_1_1_thornton.pdf "Who Predicted the Bubble? Who Predicted the Crash?"] (pdf), ''The Independent Review'', v. IX, n. 1, Summer 2004, ISSN 1086-1653, Copyright © 2004, pp. 5–30. Referenced 2011-12-13.</ref> In October, 1999, [[Sean Corrigan]] pointed out a massive bubble and implied it will burst. He compared the conditions to those during the late summer of [[Black Monday (1987)|1987]], the [[Japanese asset price bubble|Japanese bubble]] of the late 1980s, and the "[[roaring Twenties]]" in the United States. <ref name="Corrigan_Pop">Sean Corrigan. [ | The '''[[Dot-com bubble]]''' and its bust was foreseen by several Austrian economists.<ref name="Thornton_Bubble">Mark Thornton. [http://www.independent.org/pdf/tir/tir_09_1_1_thornton.pdf "Who Predicted the Bubble? Who Predicted the Crash?"] (pdf), ''The Independent Review'', v. IX, n. 1, Summer 2004, ISSN 1086-1653, Copyright © 2004, pp. 5–30. Referenced 2011-12-13.</ref> In October, 1999, [[Sean Corrigan]] pointed out a massive bubble and implied it will burst. He compared the conditions to those during the late summer of [[Black Monday (1987)|1987]], the [[Japanese asset price bubble|Japanese bubble]] of the late 1980s, and the "[[roaring Twenties]]" in the United States. <ref name="Corrigan_Pop">Sean Corrigan. [https://mises.freecapitalists.org/daily/317 "Will the Bubble Pop?"], ''Mises Daily'', October 18, 1999. Referenced 2012-01-08.</ref> In March, 2000, [[Christopher Mayer]] noted that all the ingredients of a bubble - fundamental (i.e., a technological revolution), financial (i.e., a surge in money and credit) and psychological (i.e., a suspension of belief in traditional valuation measures) - appear to exist in the current bull market and predicted it will end with a bust.<ref name="Mayer_Over-Valued">Christopher Mayer. [https://mises.freecapitalists.org/daily/405 "The Meaning of 'Over-Valued'"], ''Mises Daily'', March 30, 2000. Referenced 2011-12-13.</ref> In August, 2000, [[William Anderson]] pointed to the bubble in the high-technology sector, mentioned the negative consequences of a regulatory attack at Microsoft<ref name="Anderson_Delusion">William L. Anderson. [https://mises.freecapitalists.org/freemarket_detail.aspx?control=316 "New Economy, Old Delusion"], ''The Free market'', August 2000, Volume 18, Number 8. Referenced 2012-01-08. Quote: "''As things stand currently, the once-vaunted bull market is in flux. This is partly due to the government’s arrogance in believing it could attack Microsoft without harming other high-technology firms that have been the most visible in the current economic expansion.'' | ||
''But even without the DOJ’s Microsoft follies, the high-technology sector of the economy faces real problems. First, the bubble that pushed so many of the "dot.com" initial offerings into the stratosphere had burst even before Reno’s pyrrhic victory. Second, the malinvestments as described by Ludwig von Mises and Murray Rothbard that occur as the result of wildly expansive monetary policies by the Fed have been centered in the high-technology sector. The growth of new money that is the signature of inflation can come only through the fractional-reserve banking system in the form of loans, which, as noted earlier, have found their way into high technologies, real estate, and the stock market.''"</ref> (which was analyzed a year earlier by [[Thomas DiLorenzo]]<ref name="DiLorenzo_Sneak">DiLorenzo, Thomas J. [ | ''But even without the DOJ’s Microsoft follies, the high-technology sector of the economy faces real problems. First, the bubble that pushed so many of the "dot.com" initial offerings into the stratosphere had burst even before Reno’s pyrrhic victory. Second, the malinvestments as described by Ludwig von Mises and Murray Rothbard that occur as the result of wildly expansive monetary policies by the Fed have been centered in the high-technology sector. The growth of new money that is the signature of inflation can come only through the fractional-reserve banking system in the form of loans, which, as noted earlier, have found their way into high technologies, real estate, and the stock market.''"</ref> (which was analyzed a year earlier by [[Thomas DiLorenzo]]<ref name="DiLorenzo_Sneak">DiLorenzo, Thomas J. [https://mises.freecapitalists.org/daily/297 "Regulatory Sneak Attack."], ''Mises Daily'', September 16, 1999. Referenced 2012-01-08.</ref>). There were others. | ||
==Predictions== | ==Predictions== | ||
<small>Anderson, 2000; Corrigan, 1999; Deden, 1999; DiLorenzo, 1999; Grant, 1996A, 1996B; Hülsmann, 2000; Mayer, 2000; Paul, 2000; Reisman, 1999; Sennholz, 2000; Shostak, 1999; Thornton, 2000.</small> | <small>Anderson, 2000; Corrigan, 1999; Deden, 1999; DiLorenzo, 1999; Grant, 1996A, 1996B; Hülsmann, 2000; Mayer, 2000; Paul, 2000; Reisman, 1999; Sennholz, 2000; Shostak, 1999; Thornton, 2000.</small> | ||
* Anderson, William. 2000. "[ | * Anderson, William. 2000. "[https://mises.freecapitalists.org/freemarket_detail.aspx?control=316 New Economy, Old Delusion.]" The Free Market, August <!-- "As things stand currently, the once-vaunted bull market is in flux. This is partly due to the government’s arrogance in believing it could attack Microsoft without harming other high-technology firms that have been the most visible in the current economic expansion. | ||
But even without the DOJ’s Microsoft follies, the high-technology sector of the economy faces real problems. First, the bubble that pushed so many of the "dot.com" initial offerings into the stratosphere had burst even before Reno’s pyrrhic victory. Second, the malinvestments as described by Ludwig von Mises and Murray Rothbard that occur as the result of wildly expansive monetary policies by the Fed have been centered in the high-technology sector. The growth of new money that is the signature of inflation can come only through the fractional-reserve banking system in the form of loans, which, as noted earlier, have found their way into high technologies, real estate, and the stock market." --> | But even without the DOJ’s Microsoft follies, the high-technology sector of the economy faces real problems. First, the bubble that pushed so many of the "dot.com" initial offerings into the stratosphere had burst even before Reno’s pyrrhic victory. Second, the malinvestments as described by Ludwig von Mises and Murray Rothbard that occur as the result of wildly expansive monetary policies by the Fed have been centered in the high-technology sector. The growth of new money that is the signature of inflation can come only through the fractional-reserve banking system in the form of loans, which, as noted earlier, have found their way into high technologies, real estate, and the stock market." --> | ||
* Corrigan, Sean. 1999. "[ | * Corrigan, Sean. 1999. "[https://mises.freecapitalists.org/daily/317 Will the Bubble Pop?]", October 18 <!-- compared conditions | ||
during the fall of 1999 to those during the late summer of 1987, the Japanese bubble of the late 1980s, and the “roaring Twenties” in the United States. | during the fall of 1999 to those during the late summer of 1987, the Japanese bubble of the late 1980s, and the “roaring Twenties” in the United States. | ||
| Line 23: | Line 23: | ||
Dec 29, 1999 --> | Dec 29, 1999 --> | ||
* DiLorenzo, Thomas J. 1999. "[ | * DiLorenzo, Thomas J. 1999. "[https://mises.freecapitalists.org/daily/297 Regulatory Sneak Attack.]" September 16 <!-- about the effects of sudden regulatory changes, hinting to Microsoft --> | ||
* Grant, James. 1996A. The Trouble with Prosperity, May <!-- Grant, in his book The Trouble with Prosperity, written in May 1996, says: "Predictably, the risks to saving are the greatest just when they appear to be the smallest. By suppressing crises, the modern financial welfare state has inadvertently promoted speculation. Never before has a boom ended except in crisis." Grant continued to warn investors about the stock-market bubble in his investment newsletter, to provide detailed explanations of the cause of the bubble, and to chronicle the relevant statistics.<ref name="Thornton_Bubble" /> - anything more about that? Can't check the book; should check out the newsletter - Grant’s Interest Rate Observer. --> | * Grant, James. 1996A. The Trouble with Prosperity, May <!-- Grant, in his book The Trouble with Prosperity, written in May 1996, says: "Predictably, the risks to saving are the greatest just when they appear to be the smallest. By suppressing crises, the modern financial welfare state has inadvertently promoted speculation. Never before has a boom ended except in crisis." Grant continued to warn investors about the stock-market bubble in his investment newsletter, to provide detailed explanations of the cause of the bubble, and to chronicle the relevant statistics.<ref name="Thornton_Bubble" /> - anything more about that? Can't check the book; should check out the newsletter - Grant’s Interest Rate Observer. --> | ||
* Grant, James. 1996B [ | * Grant, James. 1996B [https://freecapitalists.org/journals/aen/ The Trouble with Prosperity], Winter 1996, Interview <!-- general prediction with a little extra: "Before this is all over, there will be a big speculative upset, a loss of faith in financial assets, and a loss of faith in the steward of financial markets: Greenspan himself." --> | ||
* Hülsmann, Jörg G. 2000. Schöne neue Zeichengeldwelt <!-- can't verify <ref name="Thornton_Bubble" /> --> | * Hülsmann, Jörg G. 2000. Schöne neue Zeichengeldwelt <!-- can't verify <ref name="Thornton_Bubble" /> --> | ||
* Mayer, Christopher. 2000. "[ | * Mayer, Christopher. 2000. "[https://mises.freecapitalists.org/daily/405 The Meaning of 'Over-Valued']", March 30. <!-- Mayer noted that all the ingredients of a bubble - fundamental (i.e., a technological revolution), financial (i.e., a surge in money and credit) and psychological (i.e., a suspension of belief in traditional valuation measures) - appear to exist in the current bull market and predicted it will end with a bust.<ref name="Mayer_Over-Valued">Christopher Mayer. [https://mises.freecapitalists.org/daily/405 "The Meaning of 'Over-Valued'"], ''Mises Daily'', March 30, 2000. Referenced 2011-12-13.</ref> --> | ||
* Paul, Ron. 2000. "[http://ronpaulforcongress.com/html/republic.html A Republic, If You Can Keep It]" January 31 <!-- | * Paul, Ron. 2000. "[http://ronpaulforcongress.com/html/republic.html A Republic, If You Can Keep It]" January 31 <!-- | ||
| Line 37: | Line 37: | ||
--> | --> | ||
* Reisman, George. 1999. "[ | * Reisman, George. 1999. "[https://mises.freecapitalists.org/daily/284 When Will the Bubble Burst?]", August 18 <!-- "It simply cannot be that we can have a society in which everybody lives by day trading in the stock market. While the stock market does make an important contribution to capital accumulation and the production of wealth, it is far from an unlimited one, and its contribution is not enlarged by hordes of essentially ignorant people dabbling in it on the basis of tips and hunches. Yet such an absurd outcome of practically everyone being able to live by means of buying stocks cheap and selling them dear is what is implied by an indefinite continuation of the bull market. As a result, it is inescapable that the bull market must end." ... "The bubble must break. It would almost certainly have ended in the Fall of 1998 with the failure of Long- Term Capital Management, had the Federal Reserve not arranged for its rescue and quickly re-accelerated its own policy of money creation." --> | ||
* Sennholz, Hans. 2000. "[ | * Sennholz, Hans. 2000. "[https://mises.freecapitalists.org/daily/477 Can the Boom Last?]", July 31 <!-- "The economic maladjustments due to many years of monetary manipulations by the Federal Reserve System are the prime source and mover of the inevitable readjustment. Once the market structure no longer reflects the unhampered choices of all participants, the readjustment is unavoidable. In the end, the laws of the market always prevail over the edicts of political controllers and regulators." --> | ||
* Shostak, Frank. 1999. "[ | * Shostak, Frank. 1999. "[https://mises.freecapitalists.org/daily/309 Inflation, Deflation, and the Future]". October 7 <!-- "Obviously the sheer dimension of the monetary pumping and the accompanied artificial lowering of interest rates has caused a massive misallocation of resources which ultimately will culminate in a severe economic slump." | ||
Inflation, Deflation, and the Future - Mises Daily: Thursday, October 07, 1999 by Frank Shostak | Inflation, Deflation, and the Future - Mises Daily: Thursday, October 07, 1999 by Frank Shostak | ||
Latest revision as of 04:21, 16 August 2026
See also: Austrian predictions
The Dot-com bubble and its bust was foreseen by several Austrian economists.[1] In October, 1999, Sean Corrigan pointed out a massive bubble and implied it will burst. He compared the conditions to those during the late summer of 1987, the Japanese bubble of the late 1980s, and the "roaring Twenties" in the United States. [2] In March, 2000, Christopher Mayer noted that all the ingredients of a bubble - fundamental (i.e., a technological revolution), financial (i.e., a surge in money and credit) and psychological (i.e., a suspension of belief in traditional valuation measures) - appear to exist in the current bull market and predicted it will end with a bust.[3] In August, 2000, William Anderson pointed to the bubble in the high-technology sector, mentioned the negative consequences of a regulatory attack at Microsoft[4] (which was analyzed a year earlier by Thomas DiLorenzo[5]). There were others.
Predictions
Anderson, 2000; Corrigan, 1999; Deden, 1999; DiLorenzo, 1999; Grant, 1996A, 1996B; Hülsmann, 2000; Mayer, 2000; Paul, 2000; Reisman, 1999; Sennholz, 2000; Shostak, 1999; Thornton, 2000.
- Anderson, William. 2000. "New Economy, Old Delusion." The Free Market, August
- Corrigan, Sean. 1999. "Will the Bubble Pop?", October 18
- Deden, Anthony. 1999. "Reflections On Prosperity" December 29
- DiLorenzo, Thomas J. 1999. "Regulatory Sneak Attack." September 16
- Grant, James. 1996A. The Trouble with Prosperity, May
- Grant, James. 1996B The Trouble with Prosperity, Winter 1996, Interview
- Hülsmann, Jörg G. 2000. Schöne neue Zeichengeldwelt
- Mayer, Christopher. 2000. "The Meaning of 'Over-Valued'", March 30.
- Paul, Ron. 2000. "A Republic, If You Can Keep It" January 31
- Reisman, George. 1999. "When Will the Bubble Burst?", August 18
- Sennholz, Hans. 2000. "Can the Boom Last?", July 31
- Shostak, Frank. 1999. "Inflation, Deflation, and the Future". October 7
- Thornton, Mark. 2000. "Who Predicted the Bubble? Who Predicted the Crash?" (pdf), The Independent Review, Summer 2004
References
- ↑ Mark Thornton. "Who Predicted the Bubble? Who Predicted the Crash?" (pdf), The Independent Review, v. IX, n. 1, Summer 2004, ISSN 1086-1653, Copyright © 2004, pp. 5–30. Referenced 2011-12-13.
- ↑ Sean Corrigan. "Will the Bubble Pop?", Mises Daily, October 18, 1999. Referenced 2012-01-08.
- ↑ Christopher Mayer. "The Meaning of 'Over-Valued'", Mises Daily, March 30, 2000. Referenced 2011-12-13.
- ↑ William L. Anderson. "New Economy, Old Delusion", The Free market, August 2000, Volume 18, Number 8. Referenced 2012-01-08. Quote: "As things stand currently, the once-vaunted bull market is in flux. This is partly due to the government’s arrogance in believing it could attack Microsoft without harming other high-technology firms that have been the most visible in the current economic expansion. But even without the DOJ’s Microsoft follies, the high-technology sector of the economy faces real problems. First, the bubble that pushed so many of the "dot.com" initial offerings into the stratosphere had burst even before Reno’s pyrrhic victory. Second, the malinvestments as described by Ludwig von Mises and Murray Rothbard that occur as the result of wildly expansive monetary policies by the Fed have been centered in the high-technology sector. The growth of new money that is the signature of inflation can come only through the fractional-reserve banking system in the form of loans, which, as noted earlier, have found their way into high technologies, real estate, and the stock market."
- ↑ DiLorenzo, Thomas J. "Regulatory Sneak Attack.", Mises Daily, September 16, 1999. Referenced 2012-01-08.