The World is in a Bubble - Here is why
Things haven’t improved since the last financial crisis in 07/08. In contrary it has only gotten worse. The economy is at such a high growing pace that speculative bubbles and overheating of the market has come to be inevitable. We can see a pattern of overheating markets, a.k.a. bubbles, occuring all 7 to 8 years. Before 2000 this has never been the case so regularly.
S&P 500 Chart as Reference
THE WHOLE WORLD IS IN A BUBBLE - WHY?
There are multiple reasons but the most obvious is that so many markets are at all time highs. Just take:
- The above shown S&P500
- Cryptomarket: Bitcoin and multiple other Alts (Cryptomarket ressembles the .com bubble: People are throwing their money at the market and bragging how easy it is to multiply your money)
- Nasdaq: Mainly driven by FAAMG (Facebook, Apple, Amazon, Microsoft and Google) they are amongst the most speculative names. Also Tesla and Nvdia are subjects to great speculation.
- Student Debt & Loans
- Housing Market: Overprizing in Canada, California and Sweden. Especially in Sweden the housing prices rose by almost 50% since 2008. Thanks to the monetary policy of the Central Bank Sweden didn't feel a big recession and also thanks to high population growth and low mortgages rates the housing prices will keep on climbing. A reference index below:
One has to understand that Globalisation has in an economic sense become a huge problem: Since everything is interconnected and everything relies on everything else. If the general market trend is bullish, every single market will behave in this way. Of course there are sometimes some divergences.
Especially with banks this globalisation stuff is like playing Russian roulette. Since the banking business is usually in a 20:1 debt ratio it is even worse in this sector. For example what happened with Lehmann Brothers. One bank collapsed -> All other banks & the whole economy followed. When a Bank Run occurs many banks will run out of money and eventually collapse.
Growth is good and volatility is inevitable. Sooner or later there will always be a correction. But if it's later the correction will be more aggressive. I believe there will be a big correction in the following 10-15 months. We can't do anything against it but i suggest we wait for the so-called dip. In this sense the popping bubble has also good sides too.
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What are your thoughts on this topic? When will the "bubble" pop? Are you also looking forward for the THE BIG DIP??😄 I highly encourage you to participate in the discussion below!
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Kind regards,
Caspar
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came here to look at pretty bubbles...
but all i got was those charts...
what goes up, must come down... it won't be pretty when the bubbles pop!
here you go my friend:
#bubblesfordays
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the words 'Russian roulette' have never felt more true.
yes sir! i was very conscious about the usage there! ;)
not sure if conscious is helpful in the world we live in sometimes. being WOKE can be TIRING.
true words.. but being conscious as an intellectual it is important to keep ones consciousness! 😁
hurrah!
The world is in a bubble searching for a pin, eventually it will find one. Great post. Thanks
thanks for your appreciation!
cheers my friend!
Great article - thank you!
you are welcome! thank you!!
Great article, but if ''everything'' is eventually in a bubble whats gonna be your safe haven till the bubble explodes?
thanks my friend! i believe raw materials like oil, which is extremely cheap now, or precious metals like palladium and gold. but it's still a very hard question to answer and i don't have the holy solution... 😕
Well holy bibles sure sell when times are tough, could be one :D
lol yeah! get to the print and produce some! ;)
Janet Yellen has promised we wont have another economic collapse in your lifetime.
I'd be very worried that is a sign of a bubble about to pop
STEEM On !!
Dave
haha for sure! this is also an indicator for a bubble :'D
cheers!
The problem is that policy makers still listen to economists. It seems like a dream gig, make predictions based on shoddy models and when you are wrong -- you still get to keep your job.
This wouldn't matter so much if their theories only stayed in their publications and classrooms, but they're used by people to govern the flow of commerce and the exchange of money.
Bernanke, a classic economist-turned-Federal-Reserve-Chairman (former), is famous for a few things, most notably for testifying that the economy was sound and due for more growth -- right before the housing collapse in 2008.
If the ivory-tower PhD's can't see it coming, what chance does anyone else have?
There has to be a better way. Embracing economics as a cure-all for monetary policy (if it was that effective, we shouldn't have depressions and frothy bubbles -- but yet we do), is a prescription for further frustration.
Cryptocurrencies are a potential shelter from this misguided academia-experiment, and may prove pivotal in the trend to purge the whole middle-man parasitic financial "services" industry.
There's a distinct feeling that we're nearing a critical point, that if we don't make it through this one -- we're facing a large reset that will take generations to recover from.
i really agree will all you said and especially with the last paragraph! we are approaching a critical turning point for better or for worse...
We cannot continue to take and abuse our natural resources and expect a vibrant economy. Yes, it is a matter of time when we see the bubble pop. Poor leadership continues. But the root of all this evil is based on poor morality. Everywhere you look, people are rude, selfish, depressed, unhappy and think that life is all about "just me". Well, it isn't. We are all God's creation and need to share and work together. Our children are evidence of greed by being overweight. Children everywhere in America can eat junk food (which is so expensive) through health and medical care added in...anytime they want. They get way too many toys, shoes, and all the materials things, but lack in the important lessons of life. Parents work 2 jobs to give these kids everything they want, just to see their health jeopardized. What a shame? Why don't we stop giving everyone so much, reduce our national debt, personal debt and just start enjoying life. Maybe those parents can work just one job and do without all those expensive games for the kids and start spending quality time with their offspring. If this would happen, our economy would see some dramatic changes. Just saying!
very true! i believe this is a topic for an other article in #philosophy ! very important topic that needs to be addressed..
I think crypto is positioned to flourish if traditional assets decline
time will tell... but crypto has indeed an advantage i believe