As money movies in prices inflate and returns are good. This attracts more money. However, it's the flow of money which is generating above market returns which requires exponential increases to keep returns up. Exponential growth is never sustainable so eventually new money can't keep up which lowers the returns. This further reduces the influx of money, further depressing returns. This pops the bubble.
Of note, the 401k system did similar things to the stock market which ended up reducing returns. In the end exponential returns are only viable when the outflow of money is greater than the inflow enabling a steady state. Eventually returns will end up averaging out as if that influx never happened, but it's going to take decades.
EX: A farm get's a fixed amount of sunlight, it can increase efficiency up to a point, but in the end it's going to output a fixed amount of food <= some constant * amounts of land. Investing more money can't push past that limit (diminishing returns), so eventually you just have more money chasing a lower return. On the other hand if you don't invest more money then the dividend continues indefinitely.
A huge range of things have increased in value because other parts of the economy improve. But, this is limited by overall economic growth. Also of note long term market manipulations are counter productive. You can prop up housing prices by reducing future returns.
As money movies in prices inflate and returns are good. This attracts more money. However, it's the flow of money which is generating above market returns which requires exponential increases to keep returns up. Exponential growth is never sustainable so eventually new money can't keep up which lowers the returns. This further reduces the influx of money, further depressing returns. This pops the bubble.
Of note, the 401k system did similar things to the stock market which ended up reducing returns. In the end exponential returns are only viable when the outflow of money is greater than the inflow enabling a steady state. Eventually returns will end up averaging out as if that influx never happened, but it's going to take decades.
EX: A farm get's a fixed amount of sunlight, it can increase efficiency up to a point, but in the end it's going to output a fixed amount of food <= some constant * amounts of land. Investing more money can't push past that limit (diminishing returns), so eventually you just have more money chasing a lower return. On the other hand if you don't invest more money then the dividend continues indefinitely.
A huge range of things have increased in value because other parts of the economy improve. But, this is limited by overall economic growth. Also of note long term market manipulations are counter productive. You can prop up housing prices by reducing future returns.