Nothing and I mean NOTHING can continue to double in price year over year for more than just a few years. A $10K mustang would be $160k in 5 years at that rate.
What happens in bubbles is the buyers who are USERS of the material will pay a price that can justify an ongoing use. In the case of a cool car. Someone who wants to own it so that it can be used (driven) will bid it up to a price that will make the transaction fair in his mind taking into consideration the cost/usefullness/atractiveness of the car. There are alot of owner/users/car lovers out there but at some point the cost will be too high for a user to want it for the purpose of using it.
If the RATE of increase is high enough then the price change attracts SPECULATORS. This group of buyers have no intention of useing the product (car) only reselling it at a higher price. All the potential other buyers in this group are only looking at the rate of change in the price and when it begins to decline they will rapidly run for the door. Usually all at once.
The value will decline back to the range that the users will pay and since all the speculators have moved on to another product to speculate on there are few if any of them avaiable for another round. The "chart" is known to them now and the recent experiance of the sharp decline is fresh in their minds, AND the capital has been reinvested in other transactions making it no longer avaiable, so there is little if any activity in the "burst" market. Usually for a long time.
The tulip bubble may have been a long time ago but don't think it can't continue to happen. During the internet bubble, just a few yers ago, a few of the startup internet stocks with no earnings and a few dozen 20 somethings employees, reached valuations that equaled that of Microsoft, GE, GM, etc. They had NO earnings(Growth) and NO plan that I could see that would ever produce earnings. Their only plan seamed to be to burn the startup money and keep the stock price/hype going up and then sell out befor anyone caught on to the game. It got so bad the finanical community made up a new indicator for it "Burn Rate". They also coined a new type of investing stratagy called " momentum trading/style" In short the burn rate was how long will it take before the market can precieve that the business plan isn't going to work and the money has run out. POP!! goes the Bubble. If you look at some of their charts you will see the same pattern as the tulips. BIG spike and equally steep decline.
So..... that "mustang" will fetch 10K-20K-40K-80K-???K. Plot that chart. At some point here anybody who would drive (use) the car can't afford to buy it. Or at least very few can and what happens next isn't a secret to anyone (except the greedest). The guy with the most greed will complete the last transaction with the second most greediest guy and.... wallla! POP! The bubble bursts when there isn't a new buyer at a higher price. Everyone else had been priced out of the market a long time ago.
Greed (risk) is good, it causes a variation in price in markets. Too much greed is......well too much risk. Big risk.... big failure. I know, I know, somebody is thinking, oh but what about the big reward?
He's the last guy.
Happens all the time.