People go to the bank to buy a house the bank doesnt give you cash but they give you a document (loan) wich has some numbers on it and you can magically buy your house now...
You are a good person so you work from 9 to 5 to pay back the bank for the loan that they gave you..
Now what is the problem with this picture??
That's what they call a bubble :)
The money they lend you, never really existed, was just numbers on a computer screen. But when you pay them back, it has to be reall money, which they are going to lend to other people eventually. But since it's just numbers on a computer screen, they will lend the same money to thousands of people. Till the day everything comes tumbling down. 2007 was a small example of what will happen.
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Beautyfully said i could not put in better words..
I am happy to see your comment it says a lot about your knowledge..
I will follow you and upvote for you..
Have a great day!
Kind regards,
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