Alternative energy: the next bubble
Eric Janszen‘s recent article notes the serial bubbles that have occurred since the 90′s, and predicts that the only viable candidate for the next bubble is alternative energy.
The argument that there will be another bubble seems pretty strong; but to me, the reasoning around how and why “the bubble cycle has replaced the business cycle” raises a lot of questions. He traces origins to the 1971 decoupling of the dollar from gold and the 1999 repeal of the depression-era Glass-Steagall Act regulating banks and markets. I don’t see a complete story there, but then again, maybe his book goes into more detail.
A backstory that I see being mentioned many other places is the question of how much longer the standard “reflation” methods can be used to recover from burst bubbles while inflating new ones. Interest rates, the dollar, and taxes are all already low, while the federal deficit is high; and the credit / real estate bust has yet to run its course. I suppose that short of moderating the cycles themselves, the lesson is to be disciplined in increasing rates, taxes, and surpluses while a boom is on.