Booms and Bubbles

Here's a thought on semantics and economics for the new financial year. Any price increase will be described as a "boom" while it's occurring, and a "bubble" in retrospect. There's a distinction between a bubble driven by speculative investment and a boom driven by increased demand and / or supply constraints, but a boom gets redefined as a bubble whenever people lose money after buying near the top of the market.

At the moment, there's a "commodities boom" or "mining boom." The surge in mineral prices (coal, iron, oil, aluminium etc.) is clearly driven by the fundamentals: consumption of most materials has increased due to Asian industrialisation, while production capacity has yet to catch up. Even so, mineral prices will fall back at some point, due to a severe recession or new mines coming into operation. While I can only guess at the timing (2009? 2012?), I'm certain about the reaction. We'll start talking about the "late 00's mining bubble."