Why the experts believed bubbles can't existShort answer: 'cuz they believed Milton Friedman.
Milton Friedman and his Chicago school proved that markets are perfect. They are efficient. They ALWAYS price things at just the right $$$. What the market says something is worth - well, you can believe it!
In this world speculative bubbles are simply impossible.
Pay no attention to the man behind the curtain:
Milton Friedman's son, David, goes further than his famous father, and argues that the government should be replaced by private business. David Friedman developed a theory of anarcho-capitalism where all goods and services including law itself would be produced by the free market. He currently posts on the usenet group alt.fan.cecil-adams and comes across perhaps as an Asperger's Syndrome kind of person.
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