a look at bubbles and busts

The Economists like to be fancy with pedantic terms and cliches and presumptuously impose on "less economic times and more TOI" junta like me with horrendous mathematical figuses that baffles and belittle us.So I decided to give a closer(and a less boring look) on the bubbles and busts concept
With the recuperation from the greatest recession after the Great Deprsession in progress,it becomes important to analyse what went wrong.I decide to analyse this by taking pieces of jigsaw and scrutinising it....
1.so,what is a bubble and a bust?
It is a speculative mania that is charaterised by trade in high volumes at very inflated prices.The term "bubble", in reference to financial crises, originated in the 1711–1720 British South sea bubble, and originally referred to the companies themselves, and their inflated stock, rather than to the crisis itself. This was one of the earliest modern financial crises; other episodes were referred to as "manias", as in the Dutch Tulip mania. The metaphor indicated that the prices of the stock were inflated and fragile – expanded based on nothing but air, and vulnerable to a sudden burst, as in fact occurred. Some later commentators have extended the metaphor to emphasize the suddenness, suggesting that economic bubbles end "All at once, and nothing first, / Just as bubbles do when they burst,though theories of financial crises such as debt-deflation and the financial instability hypotheses suggest instead that bubbles burst progressively, with the most vulnerable (most highly-levered) assets failing first, and then the collapse spreading throughout the economy.
2.what causes the bubble?
A prime cause is liquidity that is indusced by banks by creating inappropriate lending rates.According to the explanation, excessive monetary liquidity (easy credit, large disposable incomes) potentially occurs while fractional reserve banks are implementing expansionary monetary policy (i.e. lowering of interest rates and flushing the financial system with money supply). When interest rates are going down, investors tend to avoid putting their capital into savings accounts. Instead, investors tend to leverage their capital by borrowing from banks and invest the leveraged capital in financial assets such as equities and real estate.In short,too much money chasing too few assets.
Greater fool theory
Popular among laymen but not fully confirmed by empirical research,this theory portrays bubbles as driven by the behavior of a perennially optimistic market participants (the fools) who buy overvalued assets in anticipation of selling it to other speculators (the greater fools) at a much higher price. According to this unsupported explanation, the bubbles continue as long as the fools can find greater fools to pay up for the overvalued asset. The bubbles will end only when the greater fool becomes the greatest fool who pays the top price for the overvalued asset and can no longer find another buyer to pay for it at a higher price.
other causes can be:
Extrapolation: projecting historical data into the future on the same basis; if prices have risen at a certain rate in the past, they will continue to rise at that rate forever.
Herding:the fact that investors tend to buy or sell in the direction of the market trend
3.Net Result of a Bubble:The one true constant with all bubbles is that they create excess demand and production. Once the bubble deflates, which it always does, a contraction or consolidation has to occur to alleviate the excess. Two perfect examples are the Dot Com Bubble and the current Housing Bubble. In both cases there were huge consolidations, bankruptcies, and deterioration of asset values.
4.the biggest bubbles of all time:apart from the recent Dot com bubble(1995 to 2000) and the real estate bubble,the history of the bubble dates back to as far as 17th century...
Tulipmania (1634-1638)
The Mississippi Bubble (1719-1720)
The South Sea Bubble (1720)
The Bull Market of the Roaring Twenties (1924-1929)
The Japanese "Bubble Economy" (1984-1989)