I think the reason why this has happened is because of cheap...

I think the reason why this has happened is because of cheap lending which has resulted in asset inflation

But what underlies all this is something I read in a book called "Tomorrow's Gold" by Marc Faber a bit of genius when comes to fore casting

I'm paraphrasing a fair bit here but he says is that industry is being sucked out of the major developed countries
and taken up by India and China
business and all that creates value is moving overseas
Developed countries are losing business and value
Hence the declining US$
Further their is a flight to asset classes like property
so we have property booms all around the world
With booms comes speculation and debt
But this is unfolding before our eyes
Property values are falling in the US and with that comes falling demand
the cost of borrowing is increasing and is getting tighter
Business can't expand, the economy cant grow
the US accounts for $9 trillion of the world economy and China $1 trillion
recession
inflation
invest in gold and emerging economies and perhaps soft commodities as Yellowcake suggests...

Anyway that could be the answer to all this.