Bankless

171 - What Causes Bubbles? with Edward Chancellor - "The Price of Time"

24 snips
May 15, 2023
Edward Chancellor, a financial historian and journalist known for his insightful works on financial speculation, dives deep into the fascinating world of money and interest. He explores how low interest rates fuel speculative bubbles and discusses the societal impacts of debt and inflation. Chancellor connects historical events with modern challenges like central bank digital currencies, emphasizing the emotional narratives behind financial systems. The conversation also critiques current banking practices and highlights the potential risks of the 'everything bubble' in today’s economy.
Ask episode
AI Snips
Chapters
Books
Transcript
Episode notes
INSIGHT

Low Interest Rates and Bubbles

  • Low interest rates fuel speculative bubbles, not just the "madness of crowds."
  • This is evident in the dot-com bubble, fueled by cheap capital for fiber optic overinvestment.
ANECDOTE

Dot-Com Bubble and Fiber Optics

  • The dot-com bubble saw massive overinvestment in fiber optic cables based on inflated data growth forecasts.
  • This led to telecom bankruptcies but ultimately benefited tech firms and consumers.
INSIGHT

The Nature of Interest

  • Interest, a naturally occurring phenomenon, predates money, emerging with early farming.
  • Reflecting time preference, it represents the difference in value between present and future money.
Get the Snipd Podcast app to discover more snips from this episode
Get the app