Bubbles

The boom and bust cycle presently has the US economy in a bust. This time it's the "subprime mortgage crisis". Oh no! a "subprime mortgage crisis"! We're all gonna die!

The truth is, these booms and busts come and they go. The bubble before this one was the "internet/venture capital crisis". What happens is, a good idea comes around, but buying into the idea gets out of control.

That doesn't mean I'm too happy with letting the subprimers off the hook, while I continue to honor the deal I made with the bank...oh well.

In any event, the Internet was/is a great innovation. Home ownership was/is a great source of wealth. That shouldn't lead to the mania seen in both booms and busts. The problems started when the charlatans got in on the act. Anyone that got burned by them has only themselves to blame.

But a charlatan stays on the move, and he already is laying the foundation for the next bubble. Want to know what it is?

The "green" bubble.

***

A graphical representation of recent bubbles might look like this:

Internet (2000) ---> Mortgage (2007) ---> Green (2014?)

We're going to lower our expenses so much by going green! Buy, buy, buy!

Again, going green is generally a good idea. Do it where appropriate, but don't fret when that bubble goes by the boards too, in around 5- 7 years.

***

A charlatan has to say one step ahead. A good charlatan is probably already working on plans for just after the "green crisis".

But, he will be hard pressed to avoid "THE BIG ONE". The mother of all bubbles, which has been building for generations and will be the ultimate financial collapse-

The Social Security Bubble

Thank You to the framers for creating one of the greatest societies the planet has ever known. But, even your great wisdom could not see this far into the future:

To the robber barons who eventually found a small crack,
Patted each other on the back,
And ruined it for everyone.

Have a nice day.