I don't blame anyone for acting in their own best economic interests (owners, breeders, or insurance people).

If some capital in the insurance industry has moved to other more profitable lines, then it makes perfect sense that prices would rise. However, some if not most of the cost HAS to be related to the values of the horses.

Your point about the Japanese purses etc.. is a good one. It could make more sense to a Japanese buyer if the purses are larger in Japan (especially since I assume the competition is weaker). Over time I would expect market forces to bring that into sync too. Over time more US (and other) owners will take their horses there to race and pick up those bigger purses. In the end, I think the prices of yearlings have to be related to purses even if owners are losing in aggregate. It's a matter of what that level is. Right now, I believe prices are WAY TOO HIGH. I'm not an expert. I'm not even moderately informed. It just screams so loudly that that's the case based on basic economics that I feel very confident in my opinion that a bust is on the way.