Locked up Money, Assets and Gold can Freeze Economy. Productive Business and Responsible Employment Sustains Economy. Money cannot be Doubled or Multiplied. It acquires value when invested and sustained in sensible business Models. Rapid Money Earnings in Shares and other methods leads to Financial Malaise.
Wealth is neither created or destroyed, it does change form. Currency is one, Gold another... many more. Numbers multiply not Money. Virtual Wealth creates loud numbers, some are real, others vanish later.
Investments should not be Head Heavy, Industrial and Business Investments must be well distributed. Niche and sector promotion by some groups will make it appear as a high growth area. The valuation goes high and then leads to the formation of Toxic Assets like it happened in the Real Estate sector.
Sustainable development is possible, rapid and unstable development can cause such problems that has been seen in the past few years. Even early as 2005, observing Globalization Trends, Business Life Cycles, i could foresee the Economic Situation today. I gave some indications then.
When such a situation occurs in any country, we have to form another company to hold the Toxic Assets. This entity will contain both the Overvalued Companies and Nonperishable assets in that Sector and also the 'Assets' of the Affected Financial Firms. This Consolidated Company can be then Listed in the Stock Exchange, the Public will hold shares and trade on, till the economy fully recovers, and it regains the market value.
The sectors that get into bubbles like Real Estate, Metals, Commodities or even Technologies are Interrelated and depend very much on Employment and Healthy Careers of Personnel. These people form the consumer base.
When local business erodes due to global investments, there are jobs and firms that are lost. This leads to loss of consumer confidence. Now you have a weaker consumer base.
Some Reasons Behind Toxic Assets