Just thinking about bubbles no not the ones you blew as a kid with a small plastic hoop dipped in the bottle but the ones that keep being blown as part of our economy. We're just hell bent on blowing more. Maybe that is just human nature. We think of a whiz bang idea to make money and we run with it and run with it. Until like the merathon runner we run out of steam and the idea goes beyond the breaking point. And those at the beginning who were smart enough to head to the showers before the pop make off with grand prize without even crossing the finish line.
We've had a bunch of bubbles before. The industrial revolution was one bubble where machines turned out products faster than ever before. There was the railroad bubble. That started around the Civil War with thousands of men laying tracks to every major city. Now it's done by a couple of guys and one machine. Then there was the airline bubble. That started just after WWII. I think it was Pan Am that was one of the first.A buch followed but things changed with deregulation and they are slowly merging into a handful. Anyone remember Eastern, TWA, or Allegheny?
There was the Dot Com bubble. I have to laugh at some of the ideas that were promoted during that wild west show. Let's take a totally unsubstainable business model and try to make it work on the internet. Again the guys who got in and sold out half way though did quite well for themselves. You may still remember the sock puppet from Pets.com or the orange guy from Homegrocer.com. I remember seeing one of the delivery vans and thinking how they won't be around long.
Now we come to our next bubble. I'll skip the housing bubble and move forward to the next. Energy or specifically oil will be the next one. Mark my words please. As we all know oil is finite. There's only so much in the ground and at some point the supplies will run out. They think that we are at peak right now. That is we're beyond the halfway point in our consumption. So what happens? First everything starts to slow down transportationwise. Then rationing followed by desperation. Then we get smart and get serious about using our noodles to solve the problem. That will create the next bubble but not until oil has hit new highs and a crisis is near. The oil bubble will pop and the cycle will start again.