I found this great overview of “The Everything Bubble“
The ultimate effect of unlimited money printing?
Is it ALL a Bubble? Stocks, Bonds, Real Estate, Car/Student Loans and Cryptos?
I do wonder, if almost every asset class show signs of a bubble, then where will the money flow once the inevitable happens?Or is a complete lack of demand enough to reset prices?
And if we all say that it’s a bubble, then by definition it can’t be a bubble right?
If we were to believe Martin Armstrong, then the bond market is likely the biggest bubble of them all (record low interest rates). Armstrong expects a flight out of public assets (government bonds) and into private assets, such as listed equities. So bonds down/rates up and stocks even up more?
Real Estate seems like it’s a bit overstretched indeed…Here in The Netherlands, people overbid the asking prices by 10% or more, just to get the house they want. Finance is cheap, as 10 year rates are 2%, and 40% to 50% of the interest cost is tax deductible for the income statement so you buy a house for 1% net. The sky is the limit. Imagine what will happen it interest normalize to 4%-6% again….
Although I do think that the cryptomarket could cool off a bit, there’s only 1% of the world population invested in cryptos. A characteristic of a bubble is that the Average Joe is holding the bag. Not there yet.
So if I had to make a choice for the future, I’d say buy stocks and cryptos. Buy precious metals, the physical one. Sell Government Bonds and definitely be careful with your Real Estate financing –> lock the rates for the long term, 10+ years and pay off your debt asap. And stay away from car loan investments…or short them. Same as with student debt –> asset categories that resemble the MBS market of 2007/8.
For my latest update of the US markets and Cryptos, click here.
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