Getting Caught in the Trump Bubble

The reckless rise of British Trumpism can only end one way for Nigel Farage and Kemi Badenoch's parties

Economists suggest there are five clear stages to an asset bubble.

When a new business, or technology, first enters the market there is an initial displacement as investors dip their toe into the fresh opportunity.

Before long the asset’s value starts to boom as investors rush to avoid missing out on rapidly rising prices. Eventually this boom turns to euphoria, with investors making increasingly reckless bets on a business whose value only ever seems to go up.

As the bubble grows, so too does its value, which reaches its peak of profitability shortly before things start to go wrong. Around this time, the smartest investors anticipate what is coming, ducking out of the same investment they’d poured their funds into just weeks before.

However, as doubts grow, most investors cling on, hopeful of squeezing out just a little more value before it all goes pop. When the inevitable explosion finally happens, panic sets in, sending prices crashing down as quickly as they gone up.

I was thinking of this process as I considered the bubble that is now surrounding the rise of Trumpism on the British right.