Reply #3: Economic bubbles have been around since recorded time.

[DinahMoeHum]

I recommend a book and a website to help you understand the psychology of bubbles:

There is that classic tome Extraordinary Popular Delusions and The Madness of Crowds by Charles Mackay, which has been around since 1841.

http://www.amazon.com/Extraordinary-Popular-Delusions-Madness-Crowds/dp/1453690298/ref=sr_1_1?s=books&ie=UTF8&qid=1281319592&sr=1-1#_

There is a website I stumbled across while perusing websites and blogs on the current real estate bubble and crash titled You Are Not So Smart which also explains the psychologies of deception and delusion/self-delusion.

http://youarenotsosmart.com/

Oops, make that several websites: For a look into the current housing bubble, go to
http://patrick.net/housing/crash.html,
click on links that interest you, then scroll down further to Other Housing Crash Blogs for further insights. My favorites there include Doctor Housing Bubble, Irvine Housing Blog
and if you click on either one, there is a link to Real Estate in the LBC, which is hilarious.

Hope this helps you.