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A small bubble/burst cycle Irish style

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hiyall Posted: Mon, Nov 14 2011 3:13 PM

Dublin Taxi medallions rose in price, while regulated, to over 200K Euros. Then suddenly dropped to 0 Euros in value when deregulated.

In NYC, medallions are currently priced at 700,000 to 1,000,000 dollars. It would be an OMG moment for speculators should they become deregulated. Needless to say, the holders of the medallions in NYC are active political donors.

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z1235 replied on Mon, Nov 14 2011 4:29 PM

Correct on the OMG moment, but I wouldn't call these instances bubbles/bursts. They are examples of price/cost increases due to supply limitations caused by government regulation. Once the supply limitations go away, then the supply freely increases, and the price/cost goes down. 

 

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