From America’s Bubble Economy, chapter Bubblequake -- A Likely Scenario of How Our Bubbles Will Collide and Fall

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What's the Best Analogy for Our Bubble Economy?
Is It the Internet Stock Bubble? The Florida Land Boom?
No, Believe It or Not, It's Enron!

     "Few people had a clue that one of the largest U.S. companies, built on one of the most solid U.S. assets -- natural gas pipelines -- was about to go under. Was it really so hard to see that Enron was actually a house of cards headed for a fall?
     "How is it possible that so many Enron accountants (the most esteemed in the nation), lawyers (the most esteemed in Houston), investment bankers (the most esteemed in the world), stockholders, employees, and managers all simultaneously suffered group blindness in the face of the facts: Enron's basic business practices were a disaster waiting to happen, and anyone with their eyes open could have easily seen it.
     "The truth is, everyone involved was smart enough to see it coming, they just didn't want to. Management may have been guilty of misleading people, but that doesn't change the fact that everyone desperately wanted to be misled.
     "Ironically, Enron's motto was, 'Ask Why.' Apparently, no one ever did. And the same is true of America's bubble economy. Like the Enron folks who had so much to gain by keeping their eyes closed, America seems to be suffering simultaneous bubble blindness.
     "Before Enron collapsed, no one asked why their stock was up 50 percent in just one year and then up almost 100 percent the next. No one asked why Enron stock jumped up 30 percent in just a few days, following a relatively minor announcement that they would enter a new broadband market. No, nobody asked. They all just kept quiet and kept making money. Despite the plain facts, they all desperately wanted to believe the good times would never end.
     "Just like the rest of us.
     "Along the same line of thinking regarding the U.S. economy, is it really that hard to see that $8 trillion in government debt that can't possibly be paid back might not be the best thing for the country? Is it really that hard to see the fallacy in homes appreciating 80 percent while incomes are up only 2 percent? Is it really that hard to see that the stock market is overvalued when it's up more than 1,000 percent in 20 years without an equal rise in real earnings? And why isn't anyone mentioning the disturbing fact that China and Japan have had to buy almost $2 trillion of our U.S. dollars just to prop up its value [to maintain their US export market]? Is it really that difficult to see that all this, coupled with a nearly $1 trillion [annual] trade deficit, might be setting us up for one hell of a fall?"