MONETARY INTELLIGENCETHE HOUSING BUBBLEBY AYOKUNNU ARE

Bubbles exist all the time: Investment bubbles, housing bubbles, social

bubbles…

THE HOUSING BUBBLE

• Houses were built that were too big and expensive for the families that owned them

• Grocery stores and employment centers were too far away; driving there took up too much gas

• Suddenly the price of the home combined with daily transportation made it all too expensive

• Other industries were sucked in too: plumbing, electrical, construction

THE TECHNOLOGY BUBBLE

• Occurred at the turn of the century

• The market was not ready for all the websites and software products at once

• A great deal of the software was dysfunctional; it was not yet perfected

EXPLOSION

AMERICA’S BANKS WERE PROVIDING NECESSARY FUNDS FOR THE HOUSING AND TECHNOLOGY BUBBLES…. UNTIL THEY COULDN’T

CRISIS

• A crisis is a great time for reconstruction

• Crashes and reconstruction are all part of the business cycle

• This cycle of bubbles, banks overprinting money, and resulting in a crisis is repeated throughout history

RIPPLE EFFECT

Overproduction of money is similar to throwing a stone in a pond. The

ripple affects the whole body of water.

BUT IS THERE A WAY TO BENEFIT FROM THIS CYCLE?

-Ayokunnu AreInvestment Manager

“Within a given business cycle it is possible to gain an advantage if one

knows what one is doing… By understand what went before, we can better appreciate where we are now and what we need to do about it.”