The next market bubble?

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GR8TFUL's picture
GR8TFUL
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The next market bubble?

No doiubt this is overly simplistic, but it seems to me that over the last 10 years, investors, en masse, have jumped from one investment category to another, and in doing so have helped to create temporary market bubbles.

Ten years ago there was the tech bubble, then the real estate bubble, the commodities bubble, most recently the oil bubble, the gold bubble . . . what's next?

At the end of the day, doesn't economics boil down to simple supply & demand? Right now everyone is concentrating on capital preservation, but if one could predict what sector(s) investment money was going to flow into en masse over the next year, that would be logical place to invest in now . . .

 Doug

JeffCFP's picture
JeffCFP
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Re: The next market bubble?

It seems to me the next bubble will be centered around the nebulous sector of Alternative Energy.  More than likely it will be a specific form of Alternative Energy such as Nuclear or Solar.  As oil begins it climb back up and past its previous high, the global economy will continue to be drepressed and 10's of Millions of world citizens will "want in on the action" on the coming speculative Altervative Energy bubble.

mainecooncat's picture
mainecooncat
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Re: The next market bubble?

Just a thought.

Can oil's activity over the past year or so really be considered a traditional bubble?

As goes oil so does the world.

The world economy has crashed along with oil. In fact, oil itself crashed the world economy -- further testament to its pixie dust-like nature. (For those who will contend my preceeding point with an argument about complex financial instruments and severe over-leveraging. I agree, but what do you think caused those creaky boards to finally snap?)

Often, with other bubbles, just that particular sector or commodity crashes but not necessarily everything along with it.

One gets the sense that if the economy were to recover and grow again (which I think it won't) that oil's price would once again skyrocket. The price, once it reached another unsustainable point, would then again crash the greater economy, which in turn would crash the price of oil. This economic and mathematical relationship seems to go well beyond what we'd normally consider typical bubble theory.

Bubble theory also incompletely addresses inherent value. I mean, who's going to argue that tulips are indispensable to civilization?

SkylightMT's picture
SkylightMT
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Re: The next market bubble?
JeffCFP wrote:

...the next bubble will be centered around the nebulous sector of Alternative Energy.  More than likely it will be a specific form of Alternative Energy such as Nuclear or Solar...

 I think you are probably exactly right. Even though eventually alternative energy will be essential, until the most viable sources are identified and production is online, many will tend to be overvalued.

ds's picture
ds
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Re: The next market bubble?

Hopefully, this crisis will purge the worst of the speculative mania out of the system for a while. Speculative excesses were contained for a while after the Great Depression, for example.

Ultimately, capitalism is a flawed system. No form of it, not even the Austrian school, makes for the ideal economic system.

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6damon9
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Ray Hewitt's picture
Ray Hewitt
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Re: The next market bubble?

Ultimately, capitalism is a flawed system. No form of it, not even the Austrian school, makes for the ideal economic system.

On the presumption that actions have consequences, Austrian Theory merely describes economic man.

That statement is about equivalent to saying humans are flawed. Hey man. Nobody's perfect.

And the alternative? Socialism? Fascism? Statism? Communism? Feudalism? What?

barrt's picture
barrt
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Re: The next market bubble?

perhaps we're in the mids of a big bubble right now, in short selling and put options. Everyones going crazy for them. It may well all end soon like all other bubbles with a giant short squeeze at the bottom of it all... but then again this bubble might go on for years

perhaps the Giant Short Sell Bubble will be the last big one we ever have, then later some much smaller bubbles in oil/ energy

do you think we have some kind of a civic duty to pull some money out of the giant stack of evaporating dollars as it fizzles away?

ironcloudz's picture
ironcloudz
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Re: The next market bubble? (what is to be done)

Getting rid of capitalism is a pre-requisite for a sutainable human prospect.  The time when it presented any sort of progressive alternative is long gone.   Not since the rising bourgeoisie replaced  the feudal landlords probably.

The currrent setup is not at this stage reforrmable.  The masses must take control of the state apparatuses on a global level with the aim of eventual dismantling it.

Withdraw from a system whose base tenets include endless physical expansion fueling endless profit margins for fewer and fewer humans and that's neutralizing the life generating mechanisms of the planet.

The workers must be put in charge of the factories retooled to use what's left of the fossil fuel era for tools designed to make the leap to a post-fossil era.  Use recovered money from the capitalist speculative thieves and direct toward unemployed human masses to reforest and perform other permacultural actions in order to assist the earth to recover.   Recompense those small holders who lost in the current crash, pegged dividends at some reasobale agreed upoin rate. Revivify local food horticultural practices where feasible.  Withdraw excess human population from landbase areas not equipped to support it.  Must leave landbase at least as good as you find it or work with natural forces to improve outputs directed to human sustenance.

Since absolutely nothing in natural terrestrial system is wasted and all re-used a sane economy must be based on similar model which earth mother is so kind to equip us with brains to witness. You cannot decrease soil nutrients and expect to survive over time; only fossil-based industrial agri has sustained it for this long as Chris' presentation points out so succinctly.

If this is done cultural evolution will take a huge leap forward and this will be a much nicer place to live in all ways. Human population will naturally come into line with carrying capacities. 

The best of the idigenous store of knowledges (which is freely downloadable from open-Source gaia for anyone who directs their mind and intentions toward it) married to the ingenuities of western techne.

Socialist libertarian anarchic Trotskyist permanent-revolutionism.To coin a phrase.

 

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