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Sunday, July 28, 2013

Son of Bubble



October 21, 2009 by · Leave a Comment 

Bullion Vault

The great leverage bubble is back and bubblier than ever…

WHAT A GREAT recovery! writes Bill Bonner in The Daily Reckoning.

No jobs…

No credit…

No sales…

But look at those stocks!

And oil! And gold! And even London property!

Real estate agents in London say they are sold out…as prices go to records. Well, asking prices…that is. As for sales prices, that is another story.

Still, London is driven by finance…and finance seems to have gotten out of rehab. It’s party time again.

The Wall Street Journal is talking about a “full recovery” in luxury goods sales by 2011. And Wall Street itself is pricing stocks as if the record profit margins of ’05 and ’06 were just around the corner.

In other words…investors’ expectations have not changed. They think things will return to the way they were in the Bubble Epoque.

How could that happen? A full recovery implies a number of things…

..that the ‘Son of Bubble’ will be as big as his dad…

..that all those people without money or jobs will somehow find the wherewithal to spend again…

..and that the baby boomers will stop saving for their retirements and begin to party like it was 2006 again…

Read more….

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