re: Drudge linked, Economist on housing bubble: We never left the bubble, its bubble inception

quote:

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We're in an enormous fixed asset bubble that has been created by 20 years of fed experimentation and extreme levels of foreign capital parking.

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Something is being conflated here.

There is only a "fixed asset bubble" in the fact that we are in an inflation/interest rate/currency value bubble.

The reason for my above reply is because your OP clearly mentions another "housing bubble". Which is very odd because there is no correlation. So I don't get how this guy's "barometer" is throwing up red flags if he's using the previous housing bubble as his means of comparison.


Believe me, I've been trying for years to explain to Obama sycophants why his economy was actually shite, and his stock markets were propped up on monopoly money printed out of thin air (QE), and that he's dangerously pushing us into another massive bubble.

You can't turn a $6 trillion M2 money supply into $12 trillion and only raise inflation 14.8% over two terms and not expect some kind of wide spread asset devaluation or a fall into hyper-inflation sometime down the road.

Fortunately for us, however, Trump won and appears to be staving off disaster.

The Fed has already released interest rates .75 points (.25 per quarter) over 3 quarters in 2017, and are about to raise it some more. Very likely .50 points in just the first quarter of 2018.

If we continue at 4%+ GDP growth, they will continue to do this at a steady pace, probably .25 to.50 a quarter until we get in the 7% range.

With 4% GDP growth and rising interest rates, the bubble will dissipate and eventually vanish.

And we haven't even really begun to feel the effects of Trump's economy agenda changes yet. So far, this has all pretty much happened on consumer and business sentiment and confidence.

Real change is happening, and more is coming. Repatriation of a couple trillion. Corporate inversion into the US. Massive job growth. Wages will rise. labor participation will rise. Corporate investment will spur R&D and create an innovation boom. $1 trillion in infrastructure spending will increase efficiencies. Relaxing of domestic energy drilling and exploration will reduce our foreign dependence and move us towards energy independence, creating even more jobs and wealth.

Stock markets under this agenda have no real reason to lose confidence and reverse trajectory. There is no real reason for a bubble to expand and burst in this environment. All the money is moving INTO the economy, not out. The value of the dollar should at the very least stay stable and stave off harmful excessive inflation.