The Fifteen Biggest Bubbles In 2017

By: Curtis Wayne 0 Comments   7/26/2017

One of the best ways to survive a recession is to avoid the bubbles that are created by all the money printing.   

Last year I wrote about the 5 biggest bubbles of 2016 but this year I see at least 15 major bubbles.  

The Fed has successfully expanded credit into so many industries that the economy has created bubbles all over the place. 

Bubbles eventually pop and when these crash it is going to be very difficult.

15 biggest bubbles in 2017  

  1. Auto loans/debt – Reaching $1 trillion.  Financial terms has been the primary driver of this bubble.
  2. Student loans/debt – Reaching $1.3 trillion.  After the 2008 recession, Obama took government supported loans away from banks in order to allow higher loans with better terms.  This allowed many unemployed to live on students loans for years.
  3. Farming – Farmland values/debts have reached $8 trillion, primarily because of low interest rates. 
  4. US Stock market - $100 Trillion increase in the last 5-years, stocks have tripled.  This has created a wealth effect as people spend more of their income when they see their investments increase.  
  5. Derivatives / Banks - $700 Trillion, 20% increase since 2008
  6. Real Estate – Home prices have reached record highs they were at in 2007.
  7. Bonds – Bonds are at the end of a 30 year bull market.  Rising interest rates are bringing this to an end.
  8. Crypto Currencies – The bubble in crypto currencies is a demand for honest money (gold backed money), because the world is flooded with fiat currencies tied to massive debts and inflation.
  9. Dollar Value – With 60% of the dollars in the world outside the US, used for reserves by other nations for trading goods and oil, the value of the dollar is unsustainable without 4% US growth which is not happening.
  10. Health Care Industry – Government involvement in healthcare had created massive overhead and become 1/6th of the economy.  The nation cannot afford Obamacare or any other government involvement. 
  11. State Pensions – Illinois pension’s liability is now $130 billion.  Several states have massive pensions that they cannot pay because they were created with the idea that bonds would return an average of 7%, not the 0-1% that interest rates have been at for nearly 10 years.
  12. Retail – The US consumer can no longer shop at the malls because they have too much debt. This bubble has begun to pop this year as major retail chain are closing thousands of stores.
  13. Restaurants – Restaurants have helped provide part time jobs for many that have lost jobs in other industries.  The restaurant industry has been one of the bright spots in the economic slowdown.  Millennials like to spend their money on experiences like trying new local beers and getting out of their apartments or parents basements in the evenings.  And the baby boomers are tired of cooking for themselves all their lives, with retirement and social security checks, they are more than willing to pay someone else to do the dishes. 
  14. Rent Prices – Rent prices have increased since the 2008 recession ended, but they are approaching a peak as they have been increasing faster than wages for several years.  This has also driven the construction industry to build a record number of apartment buildings, many will be half empty for decades, but it didn’t matter because the high rent prices and low interest rates made the math work out.  When this bubble pops it will also collapse the apartment builders and every industry associated with them.
  15. Food Stamps – Food stamps have drastically increased since the 2008 recession began, with 47 million people now receiving food from government programs.  This reveals the truth about the economy, since the recession ended in 2009, most people have not recovered and probably never will.  Government programs like this one have been added to the national debt (20 Trillion), which cannot continue forever and needs to be paid back to the nations that borrowed us the money.   

It is easier said than done, but one of the best ways to survive a recession is to avoid all of the bubbles. 

Most of these bubble have not popped yet, which is why we still see a 1-2% GDP.   

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