Reply #5: I think you're missing the necessary ingredients for bubble markets

[Warpy]

First, a large number of people have to be beggared so the normal economy just isn't working that well because they're not spending enough to keep the money rolling in to the upper class. Second, wealth concentration has to give the upper class lots of money looking for places to make more money.

You end up with too much wealth in too few hands looking for the next big thing. That resulted in the dotcom bubble leading to the Dow bubble leading to the real estate bubble and culminating in the commodities bubble last winter and spring. The wealthy create these bubbles by rushing in at the same time. As soon as enough suckers follow suit, they start easing out, leaving the suckers to take the hit when the bubble collapses.

Bubbles are easy to spot. Tracing who started them off is much more difficult, but hedge funds figured largely in the commodities bubble.

We've now had enough collapses that have taken enough money out of the economy that everybody is feeling the pinch, even the fat cats who caused the whole mess.

(yes, this is oversimplified. It's a post, not a book)