Hello,
My name is Jesse Colombo and I am an economic analyst and activist who was called one of the “Ten People Who Predicted the Financial Meltdown” in 2008 by the London Times because I created a popular website called “Stock Market Crash!” (stock-market-crash.net) in early 2004 for the precise purpose of warning about the then little-known U.S. housing and banking bubble.
At the peak of the housing bubble in 2005, my website was one of the four most heavily-trafficked housing bubble-related websites and was mentioned in an LA Times article for this very reason.
Several million people visited my website and read my prescient financial crisis predictions that I made more than four years before they came true.
The same economic framework that allowed me to foresee the housing bubble and crash many years in advance is now flashing a “red alert” for a whole new crop of dangerous economic bubbles that I have been publicly warning about on a large scale since June 2011. I truly hope that I’m wrong this time.
I’d Like to Interact With You
Before I introduce today’s latest bubbles, I’d like to invite you to join a thriving economic crisis discussion community that I’ve built that has over 30,000 knowledgeable and influential members on both Twitter and Facebook. This community includes journalists from The Wall Street Journal,
the Financial Times, Reuters and the BBC, TV news anchors, economists, hedge fund managers and other financial professionals, well-known authors and bloggers, university professors and political activists. There are even a couple of U.S. State Senators in the community.
I post the latest, cutting-edge news related to these bubbles and follow up with my own commentary and discussion with other members of the community, from novices to experts. I encourage everyone to get involved in the discussion – the whole world needs to learn about these little-known, but extremely dangerous economic bubbles.
Click the buttons below to join the discussion community on Twitter (I will follow you back) and on Facebook and I strongly encourage you to ask me any questions that you may have and I will personally answer them to the best of my abilities:
The Economic Recovery is Actually a “Bubblecovery”
Most mainstream economists and economic commentators, the same group that didn’t foresee the housing & Global Financial Crisis, are now saying that the economy is on the “road to recovery” as the housing market and consumers slowly but surely heal.
What these mainstream economists do not realize is 
that our bubble problems didn’t end with the housing bubble. The very same socio-psychological and monetary factors that caused the last decade’s housing bubble and other excesses have created numerous other bubbles that have not popped yet. There are many bubbles that are still expanding and creation an illusion of economic strength, including rising stock prices, while threatening to devastate the global economy upon their inevitable popping.
The Post-2009 Economic Bubbles that I have identified have greatly expanded since the depths of the Great Recession in early 2009 and are largely responsible for creating the illusion of an economic recovery. This “recovery” is mostly artificial as it is based largely on these bubbles (I call it a “bubblecovery“) and very little on true economic substance. When the Post-2009 Economic Bubbles pop, the false recovery will violently end and the secular bear market and economic decline that began in the year 2000 will continue.
Introducing the Post-2009 Economic Bubbles:
The Post-2009 Global Housing Bubble or “Housing Bubble 2.0″
(this bubble encompasses all of the country-specific bubbles listed below)
After the cataclysmic mid-2000s housing bubbles in the U.S. and European PIIGS nations, one would think that the world would never allow another housing bubble to rear its ugly head again. Unfortunately, this thinking is completely wrong. Since 2008, 
the world has openly embraced new housing bubbles with astounding vigor, in complete defiance of all lessons taught by the Global Financial Crisis. A series of new housing bubbles have inflated in practically every country outside of deflation-prone Japan, the U.S. and PIIGS nations. These new housing bubbles are located in China, Canada, Australia, emerging market countries and northern & western Europe.
Read more about the Post-2009 Global Housing Bubble
The Post-2009 Northern & Western European Housing Bubble
(this bubble is a subset of the Post-2009 Global Housing Bubble)
Could Sweden or Finland be the scene of the next European financial crisis? It is actually far likelier than most people realize. While the world has been laser-focused
on the woes of the heavily-indebted PIIGS nations for the last couple of years, property markets in Northern and Western European countries have been bubbling up to dizzying new heights in a repeat performance of the very property bubbles that caused the global financial crisis in the first place.
Read more about the Post-2009 Northern & Western European Housing Bubble
Amid the excitement over the rise of China, investors and economic commentators have been eagerly scouring the world for “The Next China” – or at least the next country to supply the raw materials that China needs for its boom (and construction of empty cities!). Global investors,
seeking to diversify away from the heavily-indebted post-crash Western world, have inadvertently created a massive “hot-money” bubble in emerging market nations, causing overheated economies and property bubbles everywhere from Brazil to Turkey to the Philippines. Soaring asset prices and easy money is creating “luxury fever” as emerging market nations copy the spendthrift ways that led to the West’s downfall just a few years earlier. In its essence, the emerging markets bubble is a derivative of the commodities and China bubbles and is highly vulnerable to their inevitable popping.Read more about the Emerging Markets Bubble
China’s Bubble Economy
China’s economic bubble starting out as a boom based on successful economic reforms and modernization that helped to lift hundreds of millions of people out of poverty, while eventually devolving into an orgy of wild real 
estate speculation, reckless construction of empty cities to create economic growth and materialism mania. Even if China’s long-term growth thesis remains intact, the same was also true of the U.S. in 1929; China could conceivably experience a Great Depression of its very own when its massive bubble pops.
Read more about China’s Bubble Economy & Housing Bubble
Canada is caught up in a full-blown bubble that is very similar to Australia’s bubble. Canada’s bubble is based on a
commodities boom (which is part of the commodities bubble), a massive housing bubble that is 40% larger than the U.S. housing bubble was at its peak, a household debt bubble and global “hot-money” investment inflows. Canada’s precarious bubble is no trivial matter for the already suffering U.S. economy as the two nations have one of the most extensive economic relationships in the world, with Canada being the U.S.’s largest export market. Read more about Canada’s Bubble Economy & Housing Bubble
earn $200,000 per year as mine workers (part of the commodities bubble), a severe housing bubble that’s larger than the U.S. housing bubble was at its peak, a household debt bubble and global “hot-money” investment inflows. Read more about Australia’s Bubble Economy & Housing Bubble
In our age of incessant financial bubbles, it was only a matter of time before commodities experienced a bubble of their very own. Initially rising due the rapid development of China and other emerging markets, the price of nearly every commodity, from wheat to uranium, exploded
during the past decade as hundreds of billions of dollars of capital entered commodities as the new “hot” investment destination. Terrorism, war in the Middle East, near-zero interest rates, quantitative easing and growing distrust of conventional investments have only served to bolster commodities’ newfound role as an investment. Now in its eleventh year, the fate of the commodities boom (and now bubble) is inextricably tied to China’s teetering economic bubble, Western economies on the verge of another financial crisis and the vagaries of speculative capital flows.Read more about the Commodities Bubble
The U.S. College & Higher Education Bubble
For many of today’s college students and recent graduates, obtaining a degree means taking on mortgage-like levels of debt without having the house (or much of a job!) to show for it. Like housing in 2005, the institution of college education is firmly in the throes of a bona-fide bubble that will end just as disastrously. College tuition costs are 
soaring and forcing our nation’s young to bear obscenely high levels of student loan debt, while a ballooning $1 trillion student loan bubble shares a strikingly scary resemblance to the toxic subprime mortgages of six years earlier (and are just as likely to be repaid). As more and more college presidents shamelessly bank $1 million per year and colleges build opulent mega-million dollar stadiums, their graduates struggle to find minimum wage jobs in the worst job market since the Great Depression. You know there’s a crisis when even young law school grads are forced to become topless dancers to support themselves and their crushing student loan bills! Read more about the U.S. College Bubble
perpetually soaring cost of healthcare, virtually nobody has put two and two together and realized that healthcare has become the ultimate bubble that will put the housing bubble to shame. While the healthcare industry hoodwinks us into believing that soaring healthcare costs are our own fault and hospital scrub-wearing mini-Madoffs rake in millions by cheating their patients, a modern-day gold rush is on as young Americans frantically look to healthcare careers as one of their last remaining shots at middle class life. Expect to hear much more about the U.S. healthcare bubble in the future as healthcare becomes far out of reach for even more Americans and the healthcare industry is forced to learn that perpetual motion doesn’t exist. Read more about the U.S. Healthcare Bubble
Abundant hype, wildly overvalued IPOs, overnight millionaires, questionable business models,
scores of startups offering gimmicky and frivolous services, the social media bubble has it all – it’s a dream come true for Generation Y techies and investors who missed out on the Dot-com bubble or for those folks who simply feel nostalgic for the heady days of the late 90s.Read more about the Social Media Bubble (aka The Facebook Bubble)
Questions? Comments?
Click on the buttons below to discuss or ask me any question about these bubbles on Twitter or Facebook and I will personally respond:
Hi there. I took some time to read up on your blog. I like the views you have on the markets as a whole. I share the same views as well. Keep up with the blog, you have great talents for this. Will look forward to talking to you in the stream on twitter some time in the future. All the best!
Mindwarpfx.
We should all be very afraid. What is coming down the tracks, if Keynesian economics continues to dominate, is a wiping out of the middle classes leaving just the very wealthy, the poor and the very poor. 45 mil in the US on ‘food stamps’ will seem like a picnic.
This article might, by some, be called alarmist. To me balanced and rational. I think the under 30s actually see this. I hope they take the future in their own hands.
The bubble is the Hindenberg Two which will duplicate Hindenberg one.
I don’t know what those boys are smoking, but damn, I’d love to get a bag of it….
They’re smoking all of that money they’re printing. LOL
I really like this site and appreciate the SHARING of ideas! Also, keep up the outstanding fundamental work your doing for all of us smart enough to read your written masterpieces and site.
*the next eight bubbles actually*
haaaahaaaahaaaa 
I LOVE THIS KID !!! and to think I just found this website accidentally.
Great people/things/movies: david morgan, max keiser, bill still, gerald celente, peter schiff, the money masters, money as debt, the secret of oz, rule by secrecy, jim marrs, and carrol quigley’s book tragedy and hope which i have not read yet, and many more i am not willing to type right now.
Great site once a freakin gain. lol
Thanks – glad you’ve enjoyed it
Keep coming back because I’m writing some new analyses that cover topics that no other analysts have covered so far. You can also visit my Twitter http://www.twitter.com/TheBubbleBubble, where you can be a part of some lively bubble convo.
Jesse
Very interesting, keep posting
As stated already your comments are very interesting.
What your article doesn’t state is how you suggest people should best protect themselves. Gold is generally the main suggestion.
Thanks – I do believe in gold as an investment for the long run, though it can experience downdrafts when deflationary events occur, such as when bubbles pop. When central banks try to stimulate economies after those deflationary events, it causes gold to rise. I expect gold to regain its former role as a monetary metal again, causing prices to rise much higher.
Thanks for a great post and for following me on twitter.
I’m newly researching and studying the economy, having started forex trading and now need to learn quickly.
Thanks for the heads up..
Hi there, I totally agree about Australia’s housing bubble bursting. I was one of the guys working in the mines earning $135,000 per year, 3 years ago. Luckily, I saved most of it.(About $80,000)
Even with my savings, there is no way I was going to borrow $300,000 to buy a house in a nearby town. Anyway, I think it will be just a matter of time, before the housing market goes downhill.
Hi Brad – thanks for the comment – I love hearing these stories firsthand.
Hi Jesse, Robert from Quebec Canada. (french).
I sold most of my realestate here because I anticipate the ”burst” of real estate in the near futur.
Unfortunatly I am havely invested in commodities.
I should be much more in the US dollar wich, if I understand you, should be the place to park some cash ??
I understand now that the Qe’s did not affect the consumer market as some had anticipated.
All that cash is park in the banking system and did not reach the small and medium size buseness and certainly not the public.
And they will keep it there for as long as there is a risk in the banking and in the soveriens.
That’s why there is no job creation in the US.
So as you say, fiat currencies will fail, but a refuge in the dollar will probably happen first. Im I right ??
Robert
Hello Robert,
Thanks for the message. I definitely agree that selling Canadian real estate was a good move.
As you know, I do believe that commodities are experiencing a bubble that is driven by Chinese bubble-based growth and investment funds that are clamoring into commodities. I ultimately believe that the commodities bubble will pop and send prices much lower but I could see this bubble continuing to grow as long as central banks around the world are trying to stimulate their economies. I’m also actively monitoring all of the idle QE money to see if it is deployed into commodities and other areas, causing the bubble to grow much larger.
The time that I am most worried about the commodities bubble popping is when central banks around the world start to raise interest rates to slow inflation and possible asset bubbles – right now they are in full stimulation mode, which is why commodities and other risk assets never seem to stay down for very long, even after a shock like we saw in Summer 2011. When the commodities bubble pops, I expect the US dollar and US Treasury bonds to surge – this is a typical “risk off” pattern and we are seeing this type of action since April. I’m still not completely convinced that this is the ultimate popping of the commodities bubble and the recent talk of China’s new stimulus plan confirms my doubts.
Personally, I have no problem with trading commodities from a long perspective – I have done it over the past three years and I may continue to do so if central banks continue to show willingness to stimulate. Because commodities are a bet on economic growth, I am more wary of long-term investing (versus trading) in commodities due to the ultimate risk of a severe decrease in demand for them that will be triggered by the next global recession or depression.
I am more worried about industrial commodities like copper and platinum but I am longer-term bullish on gold, which I believe will again have a role as a monetary metal. During short term deflationary shocks, like we are experiencing now to a small extent and in ’08, gold tends to drop and the US Dollar and Treasuries rally – I may look to buy those as a trade when I expect the global bubbles to pop and then I would switch into gold as a longer-term investment after it experiences a short-term deflationary drop.
I hope this answers your questions,
Jesse
Thanks…
I sold my house in Australia 2 years ago for over 500K near a small coastal town. Prices have already dropped 10-20% since then, the Australian real estate bubble deflation is well under way.
Yes – it has been deflating slowly, but still firmly in bubble-territory.
Very interesting to read. I am from Auckland , New Zealand. Recently, I have been to few auctions around the Auckland CBD’s especially in Mt Eden and Epsom. Prices were at crazy level, usually $300k to $500k above government valuations. For e.g GV$1.75m sold for $2.25m, GV$1.1m sold for $1.9m for a do-up, GV$1.35m sold for $1.7m also for a do-up and the list goes on. In some cases, frenzy bidding. Prices have doubled since 2000 and “bubble” hasn’t really popped even during the 2008 crisis. Our household debt is huge but people over here still think there will never be a bubble and even if there is one it won’t burst even during the 1997 Asia crisis and the 2008 crisis. Your opinions?
Thanks for the message – I believe that New Zealand also has a housing bubble/economic bubble, along with Australia and for similar reasons (global “hot money” flows & the China bubble-driven commodities supercycle). I will be writing an article on New Zealand’s housing bubble in the near future.
Jesse
I just stumbled upon this website. Thanks for the great information, and thanks for documenting all of your claims. It is refreshing to read a well-written, honest, documented piece of literature. I’m looking forward to additional posts in the future. I would be interested in reading a section in each of these articles entitled, “Possible solutions to this problem”, or ” Structural/Legal causes of this bubble”. You’ve sort of addressed this issue briefly in a few of the articles, but I’d like to see it get more direct attention. Thanks for the good read.
Thanks for the compliments, Seth
I will definitely try to write articles in which I propose solutions to these problems.
Jesse
Hello Jesse
It was great to check out your analysis while researching for my Documentary on CHINA. Im doing several segments on the housing bubble and economy in CHINA BEYOND THE RED HORIZON. check out the link and if you like i can send you a video promo via email. Please keep in touch.
Roger Muchmore
Hello Roger,
Thank you for stopping by – I’d definitely be interested in watching a video promo of your documentary. You can send it to my email at: jesse -at- thebubblebubble.com. Please let me know if there’s anything I can help you with information-wise.
Thanks,
Jesse
Hi Mr. Colombo,
I would appreciate it if you would tell me the date of your vey interesting (and disconcerting) piece on “The Post-2009 Northern & Western European Housing Bubble” which I found on your website today, September 17. Unless I missed it, the date is not on the website.
Thanks,
Andrew Martin
Hello Andrew,
Thank you for reading this article. It was originally written in late February 2012 and I will be updating it very soon.
Thanks,
Jesse
Hi Jesse,
I commend you on your insightful paper. Your views & summations are pragmatic & to the point. I am studying the markets with a view for entering into the game of buy & sell for the first time.
Jesse, in your own personal studies, do you lookout for particular patterns?
E.G: Would you make the pint of obatin in the various Fed/reserve media press releases from the major economies around the globe?
With a plethora of info available on the net & media outlets, can you suggest any sites that I could perhaps keep an eye on? That can sharpen my knowledge for buying & selling in the markets?
Also have you considered what would be ramifications to the global markets (if any..) If the tensions between the U.S & Iran escalate into a serious conflict at Sea. Lastly what do you perceive could happen to the markets with the highly probable Israeli strike on Iran?
Hi, I just came upon your website and it’s really informative. I’m pretty concerned about the emerging markets bubble and the China bubble. Here in the Philippines a couple of corporations (SMDC) are putting up a lot of condo units. The buildings are a common sight, and the prices don’t seem to attract that much buyers either. Any thoughts on how this will end?
Sorry for the delay – I’m glad that you found this site informative. I just received a similar comment from a reader who is an expat in the Philippines (it’s at the very bottom of the page): http://www.thebubblebubble.com/emerging-markets-bubble/
As far as how it will end, it can go many ways, but I suspect that a Chinese, US or European hard landing and/or a crash in commodities prices would be the major catalysts that could pop the emerging markets bubble. I’m concerned about a deflationary scenario in which the US dollar (and possibly Yen) soar and liquidity is drained from risk assets and emerging market economies, popping their property and credit bubbles.
You can follow me on Twitter http://www.twitter.com/TheBubbleBubble, where I provide ongoing updates and discussions about these bubbles.
Thanks for the comment,
Jesse
If we read this article, it states every things is bubble. The writer is right in his own way. It is a process, whoever and whichever goes on top must have to come down as well. Sometime a single mistake can put you down and sometime multiple. However, if ever polices have been developed for the people at large and to give them true benefits then no bubble occurs, where this will be failed only when equal distribution of wealth will not occur.
Muhammad Naeem ul Fateh
Social Media will be the next one. Virtual world can not sustain for a long. This one I have mentioned before facebook started IPO in the financial times, London.
I agree – the popping of the social media bubble seems to be well underway.
An insightful read to say the least! I found this blog while googling “the currency bubble” feeling that bubble alone is the bubble that rules them all. I would appreciate being subscribed to your blog and any other information you have regarding the economy. What you share is what the media and establishment would prefer “we the people” don’t know about.
Is this the acme of society…?
It makes me wonder if the implosion of too many bubbles too close in time frame could wipe out any chance of real recovery or worse yet, putting the world into the throes of a dark age. Although I’m not a doom and gloom fear monger extolling blame on some shadow “Illuminati” group, however, considerations must be made – if one were to remain objective about three crucially important facts:
1) These bubbles do exist.
2) Every fix by our leaders have been nothing more than superficial remedies (Infinity QE3, near zero fed rates, Obama back in power)
3) These bubbles can and will burst.
So now the question is not if but when all of these bubbles burst, coupled with the added natural global catastrophes. NOAA reports of the top 10 Hurricane disasters in the U.S. 8 of of the most devastating that have resulted in staggering financial cost upwards of a quarter trillion and tragic loss of life, have occurred in the last 10 years. (After Sandy it is 9 of 10 and Sandy is estimated to be some 50billion the 2nd most costly in history).
That’s not to mention the billions spent on war in the last decade.
The human body can take a single laceration and needs time to heal, but multiple lacerations all at once and the body goes into shock resulting in death. In that sense for the economies of the U.S. and around the world, could this be the height of what we’ve come to know as modern civilization? I’m hopeful because I believe in the resolve of the human spirit, yet saddened by the accomplished results so far.
“There is sufficiency in the world for man’s need but not for man’s greed” ~Ghandi
Hello Jason,
I’m sorry for the delayed response. Thank you so much for the kind compliments – I made this site for people like you!
You make great points and I’m in complete agreement with them. You said that you’d like to subscribe to this blog – I would love to have you join my on Twitter or on Facebook, where I engage in active discussion about this topic – you’d be right at home.
Here’s my Twitter blog: http://www.twitter.com/thebubblebubble and Facebook: http://www.facebook.com/thebubblebubble
I hope to chat with you again soon!
Jesse
Hi Jesse, I was wondering what you are doing personally to protect yourself when these bubbles burst and there is an collapse, and I’m not talking about investing. How are you preparing?
Hello Denise,
I do believe in “prepping” such as storing necessities, means of self-defense, and some precious metals. I talk about this topic quite extensively on my Twitter blog and I welcome you to read it and participate in the lively discussions that I hold there: http://www.twitter.com/thebubblebubble.com. If you don’t have Twitter, you can join the discussion on Facebook: http://www.facebook.com/thebubblebubble .
I hope this answers your question,
Jesse
Hi!
Great article and thanks for persistently analysing these multiple bubbles.
In India we have a real estate bubble but nobody is willing to call it that. Basically from 2002, the rates in urban areas have gone 4X to 8X times by 2012. After the 2009 crash, there was a 1-2 yr plateau or small dip in the rates, but they are going back up again.
People are justifying it saying we have 1.2 billion people so demand will always by there. Besides, those holding tons of black money are willing “investors” in real estate. So prices just don’t seem to go down.
What do you think — will the prices actually ever go down? Will this bubble pop, and if so, what will make it pop?
Thanks!
Hello YP,
I truly believe that India has a housing bubble and my suspicions are confirmed by the fact that the entire emerging world is experiencing similar bubbles, as you can see here: http://www.thebubblebubble.com/emerging-markets-bubble/
It could pop due to any number of factors: a U.S. fiscal cliff crisis, a Eurozone crisis escalation or a Chinese hard landing, or just due to the fact that high inflation in emerging markets limits the ability of central banks to provide monetary stimulus.
I hope this answers your question,
Jesse
I spent two years teaching in China and am quite sure you are right about the China bubble. The U.S. college bubble is another interesting one. Right now the cost of a college education is probably more than it is worth and too many students are going too far into debt. In my book, “Stop the Insanity Target 2014,” I propose a number of solutions to problems in the U.S. One it the cost of a college education which I believe can easily be reduced by 40%. I hope people (and politicians) listen when the book is published and available on Amazon in December.
David Welch
Hello David,
Thanks for the comment. I’ll make sure I check out your book when it’s published soon. Good luck!
Jesse
Hello, I’m not a financially educated man Jesse Colombo, but I feel it was really obvious in my working class environment as well. It was only a matter of simple deduction to see how easy people were finding it to obtain loans then use a little deductive thinking to imagine the higher up you go the bigger that monetary flow must be getting. However, since the crash I having studied the credit derivatives called credit default swaps and the speculative gambling that occurs around them, & I hope I am beginning to understand a fair amount about them. Where it appears that these derivatives are not directly tied to any solid asset, does this mean that the finance involved is not actually tied to any product and therefore a major part of these bubbles? Also, do you think that insurance on a loan at any level is creating more finance tied to nothing in effects?
Great blog by the way; it’s the first thing I’ve read in recent times & not had to spend a week looking up half the meanings of terms!!!
Hello Martin,
The ever-ballooning derivatives bubble seems to have helped to inflate certain investments assets because it creates artificial buying power, so you are on to something.
I’m glad that you’ve enjoyed my site! My goal is to make it so that people can understand it without needing a degree in economics. I will be writing many more articles soon and updating the existing ones.
You can follow my live updates about these bubbles on Facebook: http://www.facebook.com/thebubblebubble and on Twitter: http://www.twitter.com/thebubblebubble. I hope to see you there!
Jesse
Your articles reminded me of an article I read a while back in National Geographic Traveler which discussed people who are hiking and, despite conditions deteriorating, i.e., weather, they continue on. After being rescued (the ones who were-some didn’t make it) they all said they realized conditions were getting worse but they pushed on because they thought things would get better. It’s like human optimism (hubris?) can be our worst enemy at times. I’m sure people much smarter than me have studied this but I find it fascinating that our belief in ourselves which can get us through much difficulty can also bite us at times. I wonder if pessimistic people aren’t taken in by bubbles?
Hello Pam – that’s a wonderful metaphor – thanks! It’s very possible that pessimistic or skeptical people don’t buy into the typical bubble-hype compared to the average person.
Jesse