Explain what would happen if the speculation made by Mr. Reddy became widespread. Would expectations become self-fulfilling?

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Explain what would happen if the speculation made by Mr. Reddy became widespread. Would expectations become self-fulfilling?


Rahul Reddy, an Indian real estate entrepreneur, believes that “The United States is good for speculative higher-risk investments.” He profited from earlier investment in Australia, and a strong Australian dollar provided him with the funds to enter the U.S. real estate market at prices that he believed “we will probably not see for a long time.” He said, “The United States is an economic powerhouse that I think will recover, and if the exchange rate goes back to what it was a few years ago, we will benefit.” Based on an article in Forbes , July 10, 2008

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