The next bubble in the U.S. economy should be taking hold right about now, entrepreneur and investor Eric Janszen writes in Harper’s Magazine.
After years in venture capital, Mr. Janszen now runs iTulip*, an investment Web site premised on the idea that the financial sector has locked the U.S. into a damaging cycle of bubbles that are disconnected from the actual health of the economy. According to his theory, the finance, insurance and real-estate businesses survive by pouring capital into a sector, creating a self-fulfilling prophecy that asset prices will rise. When prices collapse back to their true value, financiers make up their losses by pouring capital into another sector and creating another bubble.Where will the next bubble turn up? In Mr. Janszen’s view, the alternative-energy industry’s expansion is showing some of the same patterns that allowed values to swell far beyond their true worth during the dot-com and housing booms. For starters...MORE
*In "Climateer Lives (I Think)" I reprise one of my favorite songs and give a tip of the cap to iTulip:
A long, long week ago
I can still remember how the market used to make me smile
What I'd do when I had the chance
Is get myself a cash advance
And add another tech stock to the pile.
But Alan Greenspan made me shiver
With every speech that he delivered
Bad news on the rate front
Still I'd take one more punt
I can't remember if I cried
When I heard about the CPI
I lost my fortune and my pride
The day the NASDAQ died
...(continued)Thanks to iTulip for giving it eternal cyber-life.