What was the overspecualtion?

Answer 1

Overspeculation refers to excessive investment in assets, often driven by the belief that prices will continue to rise. This behavior can create asset bubbles, where prices become disconnected from their fundamental values. When the bubble bursts, it can lead to significant financial losses and economic instability, as seen in historical events like the 2008 financial crisis or the dot-com bubble in the late 1990s. Essentially, overspeculation occurs when optimism outpaces reality, leading to unsustainable market conditions.