Future Bubble brainstorming thread

Ok, all you financial geniuses...

Let's assume, for the sake of argument, that the boom-bust cycle can revolve at least a few more turns without total systemic collapse. This may indeed prove not to be the case, and I know its a big hurdle for many on ATS to think outside the "all doom, all the time" box, but let's run with the concept just for giggles.

So, what in your minds are likely candidates for future possible bubbles? What could replace real estate the way real estate replaced tech stocks? And what about after that? Anyone feel brave enough to forecast two or more "bubble cycles" into the future?

Some possible candidates:

-A sovereign wealth bubble
-A precious metals bubble
-A commodities bubble
-An emerging markets bubble
-A biotech bubble
-A "green tech" bubble
-A carbon-emissions-trading bubble
-Another financial-intrument-based bubble (what kind of instrument(s)?)
-A FOREX bubble
-An agricultural bubble (?)
-Maybe someday, a "re-industrialization of the developed world" bubble
-Also a bit farther in the future, a possible "Africa bubble" (i.e., jobs moving from more-expensive China/India to Africa?)

And so on.





[edit on 5/3/10 by silent thunder]

reply to post by silent thunder


Actually, the next "bubble" will be the 2nd wave of home foreclosures.

A lot of ARM Mortgages will be due starting later this year , and increasing

into 2012.

reply to post by Sean48


Yeah, its gonna be a groovy Q3\Q4 2010 with that summertime reset spike coming up, isn't it.

I heard there was a big bubble in the Chinese Realestate market waiting to burst - so I would keep an eye out for that.

reply to post by ghostsoldier


Indeed. It may already be underway:


China's housing market slows; buyers hesitant

New Chinese rules to drop home prices by 30%

China: Property sales plunge over holiday weekend

Bubbles happen when expectations get ahead of & start leading people's actions without any sounding of the depths down through to the 'ground'.

It is very similar to inertia. Expectations & inertia act similarly, but if there is some additional force involved [like gravity] then there is a very good possibility that that force will make itself known & win out over some temporarily predominant inertia.

Usually with bubbles, it starts out with some kind of seemingly quite sound economic expansion, & then people begin to anticipate a continuation of expansion & people start launching into dodgier & goofier schemes that make less & less logically based sense.
It is where people lose contact with real economic activity, cause & effect, & just expect effects to occur from no cause.

reply to post by slank


It seems to me that bubbles have become the de-facto engine of growth in the developed world if not the world in general, despite their inherent irrationality. I would not call this a good development and generally I'm on the "doom-y" side of things. Yet I sometimes wonder if it is theroretically possible to drive an economy indefinitely with bubbles, despite their underlying lack of substance. If forced to anwer one way or another at gunpoint I would say "no," and yet the carnival merry-go-round seems to keep turning year after year, long after reason suggested to me that the game would have ground to a halt.

One interesting possible underlying trend is that technology, efficiency, and productivity may have reached a point already where there really has been a "paradigm shift" in terms of creating more new value. True paradigm shifts, while rare, are not unknown -- look at the Industrial Revolution, for example; we have not even come close to retreating from the gains made since the 1700s, and few would argue that life is not genuinely better for humans now than then, at least in the developed world. Of course, the arguments of total sustainablity and other fundamental limits challenge the assumption that we *won't* retrench to pre-eighteenth-century levels.

If we have indeed reached such a shift, the profusion of bubbles would show a flaw in the general distribution-of-wealth model rather than in the process of underlying value creation, and could be a symptom of the need to adjust to fit new levels of value creation rather than a sign of long-term collapse or malaise. Going even further out on a limb, I think its possible to at least conceive of a system in which a boom-bust cycle (i.e., a more extreme and erratic form of the old business cycle) could serve as a catalyst or even basic framework for value delivery itself, albeit in a rather rough-and-tumble manner.


[edit on 5/3/10 by silent thunder]

reply to post by silent thunder


All signs are pointing to an "Enron Bubble" ... trading "energy credits" .. be it "carbon" or what ever.. it's a shadowy market right now, but growing fast. If the Dems and Neo-cons have their way, not only will trading credits be encouraged, but taxed... even though they represent no wealth at all. Unfortunately in this bubble "average joe" only gets screwed.

reply to post by Rockpuck


Yes, I've been paying close attention to the energy and carbon markets recently...there is major explansion in those areas but I think they are going to keep it out of the grubby reach of minor players. It is quietly being deployed to serve the Masters of the Universe.

In the short term, oil is already a bubble. Per barrel prices have well inflated past economic fundamentals (i.e. anemic recovery).

The problem with this bubble is that barrel prices that reach near $100 can easily derail this tenuous economy as consumers are forced to reallocate to pay for higher prices.