Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Let's build a bubble!
Old 03-17-2008, 04:52 AM   #1
Dryer sheet aficionado
Join Date: Nov 2007
Posts: 29
Let's build a bubble!

A financial bubble is a market aberration manufactured by
government, finance, and industry, a shared speculative hallucination and then a crash, followed by depression. Bubbles were once very rare—one every hundred years or so was enough to motivate politicians, bearing the post-bubble ire of their newly destitute citizenry, to enact legislation that would prevent subsequent occurrences. After the dust settled from the 1720 crash of the South Sea Bubble, for instance, British Parliament passed the Bubble Act to forbid “raising or pretending to raise a transferable stock.” For a century this law did much to prevent the formation of new speculative swellings.

Nowadays we barely pause between such bouts of insanity. The dot-com crash of the early 2000s should have been followed by decades of soul-searching; instead, even before the old bubble had fully deflated, a new mania began to take hold on the foundation of our long-standing American faith that the wide expansion of home ownership can produce social harmony and national economic well-being. Spurred by the actions of the Federal Reserve, financed by exotic credit derivatives and debt securitiztion, an already massive real estate sales-and-marketing program expanded to include the desperate issuance of mortgages to the poor and feckless, compounding their troubles and ours.

That the Internet and housing hyperinflations transpired within a period of ten years, each creating trillions of dollars in fake wealth, is, I believe, only the beginning. There will and must be many more such booms, for without them the economy of the United States can no longer function. The bubble cycle has replaced the business cycle.
Cont'd: "The next bubble: Priming the markets for tomorrow's big crash" by Eric Janszen (Harper's Magazine)

Well constructed and laid out viewpoint relating to bubbles - good reading!

Please let me know your thoughts.
Neongreen is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-17-2008, 04:57 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
Can the next bubble at least wait until we dig ourselves out of the current hole we are in?
chinaco is offline   Reply With Quote
Old 03-17-2008, 09:46 AM   #3
Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 1,556
Too late. The commodity bubble is already leaving the gate. Don't get left behind

Originally Posted by chinaco View Post
Can the next bubble at least wait until we dig ourselves out of the current hole we are in?
Hamlet is offline   Reply With Quote
Old 03-17-2008, 10:10 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
My PCRIX is up 24% YTD...
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 03-17-2008, 10:29 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ziggy29's Avatar
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
There already IS a bubble in commodities and basically anything that bets against the dollar.

There's almost always a bubble somewhere.
Originally Posted by HFWR View Post
My PCRIX is up 24% YTD...
So is my position in USAA Gold (USAGX).
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
ziggy29 is offline   Reply With Quote
Old 03-17-2008, 11:05 AM   #6
Full time employment: Posting here.
CCdaCE's Avatar
Join Date: Apr 2006
Posts: 897
Really good article. Thanks for posting.

I keep hearing the part, towards the end, that the next bubble will relate to alternative energy, etc. I wonder if it's already started. If you want to include all energy companies, it has.

"There's those thinkin' more or less, less is more, but if less is more, how you keepin' score?
It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder
CCdaCE is offline   Reply With Quote
Old 03-17-2008, 02:46 PM   #7
Dryer sheet aficionado
Join Date: Nov 2007
Posts: 29
I think that there might be two bubbles - one definitely in commodities and one lurking underneath in alternative energy, as mentioned by the article. The alternative energy one is probably going to take at least 5 years to mature, but the commodities one can pop anytime during the next decade.

Seems to me that once those two pop, the States in for a depression. There are almost no other asset classes that can withstand a high level of investment - the investors from the housing, commodities, and alt. en. markets will be looking for a fresh place to dump their assets. This will inevitably create a huge new bubble(as mentioned in the article) but one that will pop faster.

Looks like a vicious never ending cycle.
Neongreen is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
I want to build a moveable hot-tub...can you help? thefed Other topics 11 05-15-2007 12:19 PM
Self defeated..trying to build a deck thefed Other topics 22 08-17-2006 08:38 PM
When did you build your retirement and why Foodeefish Young Dreamers 16 12-16-2005 11:51 AM
Build your church upon the rock John Galt Other topics 23 12-29-2004 12:54 PM
Cost to build house Traveler Life after FIRE 12 11-18-2004 06:19 AM

» Quick Links

All times are GMT -6. The time now is 06:51 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2023, vBulletin Solutions, Inc.