The Next Bubble?
economic bubble
Our most recent economic bubble was the housing market and we all know how that ended. Keep in mind, during the frenzy anyone who raised any red flags was immediately labeled a bubble head. When the music is playing very few plan for what will happen when the song ends.
Right now our loose monetary policy is playing another enticing song. The loose monetary policies from governments across the world have flooded the markets with capital and it seems just about everything has soaked it up. The S&P is approximately 40% more expensive in relation to earnings than its long term average. Oil is trading at a 15 month high. Metals have had an outstanding year: silver gained 49%, palladium gained 117% and copper gained close to 140%.
It just may be prudent to plan for now for the consequences of our abundant loose money policy to avoid getting caught with your pants down again.