‘The Everything Bubble’: Why The Coming Collapse Will Be Even Worse Than The Last

by | May 18, 2017 | Headline News | 46 comments

This report was originally published by Tyler Durden at ZeroHedge.com


The next crash is coming, and the decision by central banks to paper over their economy’s troubles with a massive injection of debt likely means that the next crash is already overdue.

Soon, investors will be forced to reconcile a massive expansion of debt and falling productivity and growth with a host of potentially disruptive crises: The advent of government-sponsored cyberwarfare, followed by the collapse of the global dollar-based monetary system. Whereas the last crisis trigger massive devaluations in the real estate and stock markets, the next crash will be the result of a triple bubble in stocks, real estate and bonds as investors bail out of traditional assets in favor of the safety of gold, silver and – perhaps – cryptocurrencies like bitcoin.

Gold analyst Mike Maloney believes that traditional assets will plunge, and gold, silver and cryptocurrencies like bitcoin will outperform, as investors seek protection from the coming collapse of the global dollar system. Maloney explains his thinking in a new YouTube video “The Everything Bubble.”

In the U.S., housing prices have experienced a halting recovery since the subprime crisis. But in other markets, like New Zealand, Canada, a frenzy of buying by wealthy Chinese hoping to stash their money abroad kept prices afloat, driving the ratio of home prices to incomes to all time highs. In Canada, the affordability index – the ratio of housing prices to incomes – has risen to an all-time high of 1.4.

In the stock market, a few vulnerabilities have emerged; the ratio of debt borrowed against investors’ brokerage account balances has reached all-time highs, which tells you that recent gains are vulnerable to a short-squeeze – which is when brokerages close clients out of their positions.

Worth noting: the rise in margin debt has traced the run-up in the S&P 500.

The VIX – a gauge of expected volatility – has fallen to multi-decade lows, suggesting that markets have grown complacent in the face of the coming crash. Earnings-per-share ratios are looking precariously stretched to dot-com-era levels.

And, finally, a look at intraday trading patterns also reveals signs of strain: Maloney, borrowing from the research of John Hussman of Hussman Funds, the former University of Michigan finance professor who famously predicted the 2008 crisis, explains that lately he’s seen what he calls “exhaustion gaps” appearing with increasing frequency. Hussman defines an “exhaustion gap” as any time the S&P 500 opens 0.5% above its previous close while its within 2% of its all-time high. These gaps show that the supply of capital pouring into the market is thinning, or ” that there are no more suckers willing to buy at the top.”

Bonds have been in a “perfect bull market” for 36 years, Maloney says. But historical patters suggest that the coming shock will likely trigger its demise: Over a span of decades, interest rates have tended to spend about equal time on either side of a peak. If this pattern holds, it would mean that the decadeslong bond-market rally only has two or three years left to run, which brings us to another important question: when the crash comes, what’s it going to look like?

Maloney believes it will unfold in two stages:

In the first, investors will flood into the perceived safety of bond markets, causing a temporary spike, as stocks and real estate markets collapse.

Then all three markets will plummet as the collapse of a catastrophic pile of debt brings about the end of the global dollar-based monetary system.

In the 20th Century, shifts in the global monetary paradigm have occurred about every 30-50 years.

And shifts in secular bond-market trends have tended to mirror them. Maloney, who has long advocated owning gold and silver, also revealed that he has purchased a small share of bitcoin and other cryptocurrencies, though he cautions against owning an outside position. Rising demand in the East has been offsetting falling demand in the U.S. So far, excess capacity in the U.S. market has helped compensate for this as the East has attracted Western gold.

But soon this imbalance will be ameliorated, and the price of gold – which has already risen modestly year-to-date – will see a large, sustained rise.

Inflation is Running at 40-Year Highs!

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    1. J

      FlashNews from CNN (communist news network)…..”car slams into crowd at Times square; one person dead, 22 injured…does not appear to be terrorism”

      They forgot to tell you that it was a drunk Hispanic, likely illegal, with multiple arrest records aggravated crimes and DUI…and appears to have been done deliberately, according to eye witnesses!!!!!

      I hope I see the day that these main stream media moguls are tried for sedition and imprisoned…or hung!!!!!

      • Gandhi

        What crash? Only people with money was affected.

      • Gandhi

        Car was prolly driven by a drunk veteran on PTSD meds.

      • Kevin2

        Was a high performance assault car used or a mundane run of the mill automobile? Why should assault cars be available to the public? Why do you need to have a vehicle that can exceed the freeway speed limit by 2X? Only police should have such a vehicle.

        • Plan twice, prep once

          They hate it when their mass killers don’t commit suicide.

          Perfect example is the Fort Lauderdale shooter. Has anyone else noticed the guy was just disappeared?

          Esteban Santiago-Ruiz hasn’t been heard of in many months. He’s just vanished.

          This guy had some crazy stuff happening, he apparently used multiple identies he created by claiming he was an illegal in sanctuary cities. Meanwhile he was a US citizen? He used some of these identies to illegally buy weapons used in his crimes. If the real story gets out there will be hell to pay.

      • durangokidd

        Reports say he blew “0.0” in a breath test. Drug tests are ongoing. 🙁

      • durangokidd

        “Then all three markets will plummet as the collapse of a catastrophic pile of debt brings about the end of the global dollar-based monetary system.”

        Markets have regularly “collapsed” at the end of every business cycle in America; with too much debt, not enough available credit to unworthy borrowers, and saturated demand. Particularly since WWII when the dollar ascended to the throne.

        At no time, NEVER, did these market collapses at the end of the business cycle bring about the end of the global dollar based monetary system. And it will not do so this time either.

        There is NO correlation between market collapses and the global dollar system. NONE. On the CONTRARY, the reverse is true. The global dollar system has survived NUMEROUS market crashes. This time is NOT different.

        Ask yourself one question: What is this guy trying to sell you ??? Gold ??? Money management ??? Newsletter ??? Preps ??? Junior mining stocks ??? 🙁

        • YellowPokaDotBikini

          Wrong again Durango Kitty. Obviously you didn’t watch the Malony Video. Try educating yourself before inserting foot into piehole.

          And more proof China is backing their Yuan with Gold.
          Russia trades Oil for Yuan, Russia deposits the Yuan in China’s Gold exchange and get Gold for the oil sale.

    2. Gonetoolong

      Amazing insight, never heard anything like this before.

      • BlackMoe

        No kidding. Hasn’t this big collapse been predicted every year for the past couple of decades?

        • Gandhi

          I have a silver investing book that says a collapse is imminent! But I bought it 35 years ago?

    3. John Stiner


      This is the first I have heard about this!!!!

      • Gandhi

        I didn’t read the article yet. Saving it for a day that I feel just a little too happy.

    4. MRD

      I’ve been prepping since 2010 listening to warnings like this. I’m not saying it is not true; it will probably happen some day. At least I’m prepared beyond belief 🙂

      • Justice

        Agreed, It’s better to have it and not need it, than to need it and not have it. Or something like that.

        • rrrr

          Yes, but is it better to have it and need it, or to not have it and not need it?

          • Gandhi

            It is better to have it stored in 401k, fancy home, and laugh at preppers.

    5. GrandpaSpeaks

      Those gold quality swaps early this century could only have been FDR’s confiscated monetary gold. Spending our gold to keep confidence in the fiat dollar is theft induced insanity. When the world returns to gold our vaults will only contain echoes yet the barbaric relic is still considered a tier one asset. I once asked a banker if he would accept a one ounce bar of gold in an assay case that I had in my possession as payment for a $1500 debt. He greedily put out his hand. I said No, I just wanted to know if you would as I wrote a check for the debt. His face said all I needed to know.

    6. Frank Thoughts

      Canada is screwed. They have the biggest housing bubble on the planet.

      • GrandpaSpeaks

        The total speculative derivative investment market is estimated at upwards of 2 quadrillion dollars. Canada’s bubble will be pushed aside like clouds during a nuclear explosion when that one pops. The metaphors are intentional. Our screw is bigger and longer.

    7. king krazy

      I’m all for a collapse 🙂

    8. MOCountryBoy

      This collapse is just what we need to do the big reset. I’m sure a better, stronger, more constitutionally minded country will emerge from the other side!

      • Gandhi

        Yes, we need a reset collapse so that is why they won’t allow it.

      • Kevin2


        Take a note of the aftermath of the Great Depression, gold confiscation, price controls, global war. If anything the “big reset” will facilitate greater government intrusion.

      • Anticommie

        Collapse will only help if it collapses the government completely.

        • Gandhi

          Collapse is only for making the rich richer. Gives them an excuse to rob you and keep the loot. Every single transaction with the markets has the little disclaimer saying: all or part of your investment will eventually be stolen from you. Suckers.

    9. logicrazy

      The proverbial straw that breaks the camels back? We shall see…

    10. Enemy of the State

      WaPo put out the fake Trump story 1 hour after the #SethRich story broke to distract from it.

      Podesta works for WaPo.

      100% collusion.

    11. Tank

      Blah blah blah
      Hurry up! Go buy all your freeze dried gruel

    12. GrandpaSpeaks

      The false flag countdown clock is holding at eleven fifty nine, it’s movement has apparently been trumped. We should be treating our last freely elected President better than this. Our last chance doth slippeth away. “So signal the ships distress master Donald. Wheft the ensign and hoist it inverted that we may abandon this stricken vessel to come what may. What’s that? You know how to fix it? Well don’t stomp on the man, bring him forth and quickly so. The ship need righting or sinketh we shall.” We are the Captains of our fate, I just wondered what they should say.

    13. B from CA

      Buy fruit and nut trees that are already bearing fruit. Be sure to get nonGMO trees. If you live in a hot weather place like here in the desert called Southern California, olive trees and lemon are good choices.

      For your low hedge, plant Rosemary Bushes about two feet apart. They smell great. Plant some grape vines along that chain link fence. Don’t be stingy, let the kids eat a grape or two as they pass by. But if you want to build a barrier, plant blackberries with thorns.

      Get the dirt ready by putting in your mulch and plant some vegtables. Do like the Indians. In a circle winding spiral into the center plant corn, climbing vine green beans, and squash at the bottom. Or make rows, it’s your garden, do what you want to do. Just do it.

      If there really is a financial crunch, your garden will save you from hunger. If not, the exercise, sunshine, and clean healthy fresh food will save you a fortune on doctor bills, including a psychiatrist. There is nothing more satisfying than watching the earth come alive with a bounty (almost nothing).

      If you want your grand kids to avoid the degradation of a life of crime, drugs, and perverted sex; get them interested in growing healthy food. It is better than yelling and threatening them. Trust me, I know.


      • Plan twice, prep once

        Speaking of fruit trees, I use as few chemicals as possible, but……
        When I moved into my current house, built on an old potato farm, there came plagues of insects and critters that ate freaking everything I planted.

        Anytime the balance of nature is upset, there will be blooms of voracious insects and animals that will devour everything.

        Even if you have it all under control, when the SHTF expect nature to rebel, and your little part of heaven will come under attack.

        Biological solutions. I have treated my property with milky spore, it is a fungus that attacks grubs. Get it established and retreat every ten years. In warmer climates, nematodes work great. BT is a bacteria sold in powder form to be sprayed. Spray it whenever there is caterpillar damage. It kills caterpillars, but is low in toxicity to humans and animals. But I keep it away from pets live stock and people. As much as they pretend it’s safe. I don’t believe it. It does work, it is natural, and once established it produces a natural shield to invaders.

        Beyond this, have some commercial insecticides rated for food crops. As much as I hate to use them, I’d rather miss a single harvest than to lose trees that took years to grow. In a SHTF situation, expect nature to misbehave. If you can take steps, you win.

        My fruit trees are growing well by the way. I planted another variety of raspberry this year that produces on a different schedule than what I already have. I like raspberries, they are a bramble and once established are pretty tough plants that just keep producing.

        Have some fence assemblies to protect plants when rabbits, deer etc are starving, that will happen in the SHTF. They make a rabbit control graduated fence that works wonders. I take a section 16 sections long and make it into a cone with the top 14 sections. Take the top two and form them into a cone, so deer can’t feed through the hole on top. These are stackable and can be staked in place to protect all kinds of plants from animal damage.

        Around fruit trees reverse the cone, 14 sections at the bottom 16 at the top. Make the top two sections face out. Cut the end wire at an angle to make it sharp to repel deer. I don’t care if deer eat the fruit that falls on the ground, but the good stuff hanging is for us. The deer are good for prepper eating too, use a silent crossbow.

        Anyway, expect nature to join in the battle, it’s biblical?

      • J.R.

        What’s wrong with perverted sex?

    14. PO'd Patriot

      We’ll up be drinkin’ that green bubble up and eatin’ that rainbow stew.- Merle Haggard.

      • Jacknife

        We don’t smoke marijuana in Muskogee.

        • ruckus

          They do now.

    15. The realist

      The sky is falling the sky is falling.,, wait a minute …haven’t we all
      Heard this BS before ?

      Let’s Move on…

      • GrandpaSpeaks

        If you do not consider how and why you are brought to a place then to move on is just a stampede.

      • laura ann

        The realist: Heard this stuff since the early 1980’s from newsletters and books, then talk radio, now the internet. Kinda like y2k, and those y2k preppers are not prepping now, as stuff was tossed or donated. Heirs tossed out the dec. peppers stuff, some I knew were really into stockpiling.

    16. Traitor Hator

      A million seconds is 12 days, A billion seconds is 32 years, A trillion seconds is 32,000 years. A trillion one dollar bills laid end to end will go around this planet 3000 times. Game over man, Game over?

    17. Plan twice, prep once

      I have to say, things will only crash when the globalists want them to crash.

      When I was young I saw movies like “Gold Finger”, “Dr No” etc.

      It seemed absurd that there were super villains that with impunity crashed economies, over threw governments, and caused the destruction of nations. People who crossed them ended up dead.

      Wow, now we see billionaire guys like Soros that do just that, operate not in secret, but in full view, and cause the deaths of tens of thousands of innocent people.

      We live in amazing times. We are watching a president being destroyed by a liberal application of mud slinging, tossed by an unaccountable, out of touch, rouge media that does the bidding of murderous, treasonous super villains. This is wild B grade fiction become reality.

    18. Capt. Howdy

      Do you folks ever wonder if we’re being played? All of these doom and gloom stories listed right in the middle of tons of advertisements selling exactly what we’ll need if and when something happens. I totally believe in being prepared for whatever is likely to happen in your area but sometimes I just feel like the big companies try to play on our fears especially when there are links in the articles right to the websites that sell things. Convenience or just clever marketing?

      • TEST

        Mac has to make a living too, y’know. It’s just these stupid Russian dating sites, tho I suspect Mac has no control over that. Anyhow, I have no problem with people advertising here. So what? Caveat emptor

      • bjlyon615

        Even if an economic collapse is approaching, that won’t stop people from trying to capitalize on it right now. But I hear you. I often wonder why there’s so much gold and silver being sold to the general population. If it’s so valuable and they think there will indeed be an economic collapse, wouldn’t those in control of the gold and silver want to keep it for themselves?

    19. Drew In Michigan

      Remember when we, almost to a man, prayed no one would harm 44, because that would only make a martyr, well same goes for 45, any form of harm is unacceptable…

      Just sayin

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