Tag Archives: Everything bubble

We’re in a Bubble that’s Too Big To Fail, by Mark E. Jeftovic

Keeping the bubble inflated requires ever-increasing injections of fiat debt, but sooner or later not even those injections will keep the bubble from popping. From Mark E. Jeftovic at bombthrower.com:

I’ve been hearing the phrase “Everything Bubble” come up more often lately. This isn’t a new phrase, Graham Summers was among the first to coin it in his 2017 book “The Everything Bubble: The Endgame for Central Bank Policy”:

“The Everything Bubble chronicles the creation and evolution of the US financial system, starting with the founding of the US Federal Reserve in 1913 and leading up to the present era of serial bubbles: the Tech Bubble of the ‘90s, the Housing Bubble of the early ‘00s and the current bubble in US sovereign bonds, which are also called Treasuries.

Because these bonds serve as the foundation of our current financial system, when they are in a bubble, it means that all risk assets (truly EVERYTHING), are in a bubble, hence our title, The Everything Bubble. In this sense, the Everything Bubble represents the proverbial end game for central bank policy: the final speculative frenzy induced by Federal Reserve overreach.”

Most recently the idea of the Everything Bubble came up on Coindesk’s Breakdown with NLW edition about NFT’s and the record setting sale of Beeple’s The First Five Thousand Days for $69 million USD. I say this as a guy who has been into crypto since 2013 and is getting even more involved today: I don’t get NFTs. Or rather, it only makes sense why they’re selling for such excessive valuations when you consider it to be a phenomenon occurring within the dynamics of an Everything Bubble.

Endgame is another theme asserting itself, that’s what Grant Williams and Bill Fleckenstein call their podcast (it recently went premium, but the first bunch of episodes are widely available across all major platforms). In Grant Williams’ February newsletter (“Let Them Eat Risk”), he afforded a lot of coverage to Bitcoin, including a piece by Ray Dalio and Rana Faroohar’s “Bitcoin’s Rise Reflects America’s Decline” (originally an op ed for the Financial Times).

What struck me about her piece, and to a similar extent, Dalio’s, was this recognition that even if they hadn’t themselves embraced the idea of crypto, it would be a mistake to dismiss crypto-currencies as merely a speculative bubble. Said differently, even Bitcoin skeptics are beginning to understand that Bitcoin’s rise means something. It portends a shift. A big one:

“A little over 100 years ago, there was a bubble asset that rose and fell wildly over the course of a decade. People who held it would have lost 100 per cent of their money five different times. They would have, at various points, made huge fortunes, or seen the value of their asset destroyed by hyperinflation.

The asset I’m referring to is gold priced in Weimar marks. If this reminds you of bitcoin, you are not alone. In his newsletter Tree Rings, analyst Luke Gromen looked at the startling similarities in the volatility of gold in Weimar Germany and bitcoin today. His conclusion? Bitcoin isn’t so much a bubble as “the last functioning fire alarm” warning us of some very big geopolitical changes ahead.” (emphasis added)

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Is This The Biggest Financial Bubble Ever? Hell Yes It Is, by John Rubino

It’s hard to argue with John Rubino; this is undoubtedly the biggest financial bubble ever. From Rubino at dollarcollapse.com:

If you’re over 40 you’ve lived through at least three epic financial bubbles: junk bonds in the 1980s, tech stocks in the 1990s, and housing in the 2000s. Each was spectacular in its own way, and each threatened to take down the whole financial system when it burst.

But they pale next to what’s happening today. Where those past bubbles were sector-specific, which is to say the mania and resulting carnage occurred mostly within one asset class, today’s bubble is spread across, well, pretty much everything – hence the term “everything bubble.”

When this one pops there won’t be a lot of hiding places.

Way too much money
Most bubbles start when an influx of outside cash sends the price of something up dramatically. This captures the imagination of the broader investing public and the process takes on a life of its own, culminating in an orgy of bad decisions and eventually a wipe-out of the easy fortunes made on the way up.

So to understand the everything bubble, let’s start at the beginning with that influx of outside money. This time it’s coming from the Federal Reserve in what can only be described as the mother of all print runs. M2, a medium-broad measure of the US money supply, has more than tripled so far in this century, and lately the arc has gone vertical, rising by nearly a third in just the past year.

M2 everything bubble

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