The Repeating Pattern

Economist Hyman Minsky identified the cycle that drives every bubble: stability breeds instability. When markets are calm, people take more risk. More risk creates more returns. More returns attract more people. More people push prices higher. Higher prices require more leverage.

Eventually the leverage exceeds what the underlying assets can support — and everything unwinds. This is called the Minsky Moment. It happened with tulips in 1637, railroads in 1893, stocks in 1929, tech in 2000, housing in 2008, and it will happen again.