What Will be the Next Asset Bubble?

Asset bubbles are inevitable with debt-based money, due to the Compound Interest Paradox. The most recent asset bubble was residential real estate and subprime mortgages. Before that, the asset bubble was in tech stocks and the overall stock market in the late 1990s. Where will the next asset bubble be?

The next asset bubble usually isn't the bubble that recently popped. People remember losing money and are reluctant to invest in that area again.

The stock market is the most likely candidate. It may be a narrow sector, or maybe the market as a whole. Banking stocks have been taking a heavy beating lately, so they are promising candidates for the next boom.

I have no idea where the next asset bubble is going to occur. I can guess. By the time you hear an asset bubble being touted on the MSM, it is probably already too late to invest.

When the Federal Reserve starts raising interest rates again, you know that the recently inflated asset bubble is at risk for popping. However, unless you're an insider who knows exactly what the Federal Reserve is going to do, trying to time the market is very risky. As a non-insider, it's too difficult to predict the top or bottom of the stock market. Sophisticated models are useless, except to the extent that the people at the Federal Reserve are using those same models. The ultimate factor is the market manipulation caused by the Federal Reserve and the government. This makes predicting the direction of the market incredibly risky.

The bottom line is that there *WILL* be another asset bubble. By the time you hear about it, the politically-connected insiders have already made their purchases. As an individual, you can predict that an asset bubble will occur, but you don't know exactly where or how long it will last.