William Pesek Spots the Bubble Elephant in the Room

Biggest Bubble in History Is Growing Every Day: William Pesek

The reserve bubble is actually an Asia-wide phenomenon. And we should stop viewing this monetary arms race as a source of strength. Here are three reasons why it’s fast becoming a bigger liability than policy makers say publicly.

One, it’s a massive and growing pyramid scheme. The issue has reached new levels of absurdity with traders buzzing about crisis-plagued Greece seeking a Chinese bailout. After all, if economies were for sale, China could use the $453 billion of reserves it amassed last year to buy Greece and Vietnam and have enough left over for Mongolia.

Oh crap. That's only one of the three reasons. I now remember why I only lean towards deflation short-term while simultaneously hoarding toilet paper.

Think about how Dubai shook the global economy, or how the mere hint that Chinese growth may dip below 8 percent inspires panic. These disappointments pale in comparison with the turbulence that may come from Asia’s biggest bubble popping.

As usual, he makes a good point. This global economy is seriously messed up and grows more unstable by the year.

On a lighter note, I feel better about my stagflationary name long-term. Sigh.