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Word Count: 1,951
When the word bubble is heard the mind may often associate it with things of very childish or innocent nature However as any economist can affirm speculative or economic bubbles are in fact the complete opposite Due to increased globalization bubbles have the power to bring the entire world to its figurative knees A speculative or economic bubble occurs when prices of an asset or commodity experience rapid growth to unsustainable levels over a period of time only to crash when those prices cannot be maintained The history of speculative bubbles goes back as far as the 1600s when the first ever recorded economic bubble occurred in the Netherlands when the price of tulips reached astronomical levels only to come tumbling down when it could not be sustained A more recent example is the American Housing bubble Once it burst it ushered in an era of recession and economic crisis and its negative economic effects can still be felt by the American public in the present day Another looming bubble is the real estate bubble that is currently forming in the Peoples Republic of China Over the past eight years the price of real estate has been rapidly increasing in China because it has been spurred on by various government policies that promote economic stimulus and due to Chinese societal and cultural pressure The effects of the real estate bubble are beginning to manifest themselves as the dream of owning property is becoming less and less feasible to average Chinese citizen After the Communist revolution of China occurred in 1949 all property rights were abolished and the ownership of all land was transferred to the state The government then allocated the usage of land for various functions such as agriculture housing communes etc Once Deng Xiaoping took over the helm of the Communist party in the late 1970s he began to open up China to the rest of the world and enacted capitalist-friendly policies including
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