Historian: Housing bubble like silver rush

Aug. 26, 2009 at 3:24 PM

DAVIS, Calif., Aug. 26 (UPI) -- A University of California anthropologist says her study of 19th-century silver prospectors sheds light on the recent bubble in the U.S. housing market.

Susan Glover, who recently received a Ph.D. from University of California-Davis, in a report published in the journal Human Ecology, looked at the relationship between what was reported in contemporary local newspapers and the strategy used by prospectors in Gothic, Colo. She found news reports tended to overstate what prospectors could find and understate the risks.

Glover suggests the newspapers themselves were misinformed and not deliberately passing on false information. She also said the newspapers reflected the kind of information passed on informally in saloons.

She compared the 19th-century silver rush in Colorado to the dot-com boom of the late 1990s and the housing bubble that brought on the current global financial meltdown.

She said overoptimistic information in the news media and from informal networks over-exaggerated payoffs while underplaying the risks.

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