Are We in a Bubble Economy? Its Easiest Way to Tell, Get Info Right Now

Fri, Feb 22, 2013

USA Bubble Economy

It is never easy to tell when you’re in a bubble.are we in a bubble economy

After all, when all of your investments are going up – whether they’re gold, stocks, bonds, or real estate – it’s most likely because you’re a wise investor, right?

That’s what most people believe. And they only realize the bubble when it’s well past and it’s too late to take profits.

That’s why we at Contrarian Insights have developed a number of ways to tell when we’re in a bubble.

One of those We’re In A Bubble Right Now flashed clearly earlier today.

Bloomberg reports in Bernanke Said to Minimize Asset-Bubble Concern at Meeting:

Federal Reserve Chairman Ben Bernanke minimized concerns that the central bank’s easy monetary policy has spawned economically-risky asset bubbles in comments at a meeting with dealers and investors this month.

What we have here we have here is a major play in the political side of the financial industry essentially saying we’re not here in a bubble.

bubble economy definition

This kind of move-along-nothing-to-see-here comments are historically the exact opposite of what is happening.

Some other classic comments like these include;

Ben Bernanke in February 2008:

I don’t anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system.

Six months later the banking system was insolvent.

Ben Bernanke again June 2008:

Despite a recent spike in the nation’s unemployment rate, the danger that the economy has fallen into a ‘substantial downturn’ appears to have waned.

As reports would later prove, the economy was already seven months into a recession. And the worst financial and economic collapse in decades followed a few months afterwards.

Barney Frank in July 2008:

Fannie Mae and Freddie Mac are fundamentally sound. They’re not in danger of going under…. I think they are in good shape going forward.

Three months later both Fannie Mae and Freddie Mac were bankrupt.

As you can see, the politicians and political players have a motive to state the exact opposite of what is happening in the real world.

Most often they tend to make these statements at exactly the wrong time.

So are we in a bubble?

There’s no way to tell. But this indicator says we certainly are in one.

So Bubble Investing Rules apply. Jump on board and go for the ride. But set trailing stop losses and stay away from illiquid assets which can be tough to sell so when it starts to burst you can run to the safety of the sidelines.

Good investing,

 

Andrew Mickey
Executive Editor, Contrarian Insights

Join Now

The Group of Big Investors in United States.

Your Email

bubble economy us

Tags: , ,

Like This?

Share This:

Facebook Twitter Share on Google+ Digg Reddit LinkedIn Pinterest StumbleUpon

Recent Post

How to Buy Commodity Stocks Online 2015 - Learn here it’s Safe to Investment in Commodity Market

The how to invest in commodities stock 2015 can correct any fluctuations that investors may have felt recently in their fortunes. The beginning of the year was on a shaky note with the direction of profits not very clear. However, with the months wearing on, the commodities market is once..... Read More...

Is Gold and Silver a Good Investment in 2015? Gold Coins Investment Best Idea for a Great Return

The is investing in gold a good idea right now is the hot conversation for small and big time investors alike. With the crash in real estate markets and the continued disfavor of bonds, gold is the only option which is fast emerging as the fail safe investment. Moreover, gold..... Read More...

Top 10 Best Stocks To Invest In Right Now in 2015, Learn Here How to Buy Stock Now

The top ten best stocks to invest in 2015 can help investors consolidate gains this year with a great margin. These are the stocks one’s would prefer to buy and hold onto for a long time. There are more winners here than losers which sped way past the rest..... Read More...

Best Investment Strategy for High Income Earners, Learn Here Investment Strategies for Buying Stocks

The investment strategies for high income earners are a few of the best special financial tips to help in wealth management. The top 2-3 per cent of the high income earners has a challenging task in holding onto their money and investment may be the only way out to avoid..... Read More...

How to Make Money in the Stock Market with Little Money for beginners, Future Wealth

The how to make money in the stock market with little money is a sure fire way to get out a less than perfect existence. It is a means other catapult in to luxury almost overnight as has been shown by many an investor in all times. Investing in the..... Read More...