What Is the Next Bubble, and When Will it Pop?
Woefully underinformed speculators like us regularly prognosticate wildly about where the next economic disaster will come from, in a futile attempt to prepare ourselves for the inevitable anvil of financial doom that always, but always, falls upon the head of the underclass. How long until we all are smashed again?
The boom and bust cycle of the economy seems like a force of nature now, which we tolerate as a necessary side effect of a world in which YOU can get RICH at ANY TIME, maybe even TOMORROW! (Lie.) Everyone loves a bubble when it's inflating; we only wail and gnash our teeth once it pops, always unexpectedly. Even though everyone knows that it will happen sooner or later, we always suspect that it will be later, rather than sooner. But the writing is on the wall, and everyone from Barack Obama on down to underqualified bloggers can see that something bad is coming. From Bloomberg:
While economists are more concerned with inadequate growth, there’s reason for vigilance. Thanks to low borrowing costs, U.S. companies have issued $241 billion in junk bonds this year, more than twice the amount during the same period in 2007; investors’ use of borrowed money to buy stocks is up about one-third in the past year to a near record, and housing prices are surging in areas such as Las Vegas and Phoenix.
Sounds oddly familiar, somehow. So where will the next set of life-threatening cracks appear in our economy? What will the next bubble be? Real estate? Student loans? Stock prices, which continue to soar unabated? Another rerun of the tech collapse, perchance?
All good candidates. Please put your own educated guesses in the discussion section. I'll go with... all four collapsing in unison approximately 2.5 years from now, with the candlestick, in the observatory. It is 2006, after all. The bad times are just over that sunny horizon.
