The SOVERIEGN DEBT BUBBLE...

...as today's Great Currency Bubble should more accurately be named, has already ended, or peaked. In a multiple-series article, we're going to explain what's going to happen next. The Currency Bubble peak occurred in December 2017 and January 2018 when Steemit climbed above $8 and bitcoin (or 'bitcone' as the Hobson Twins affectionately call it) nearly topped $20,000. What neither professional currency traders (Yen, USD, Swissie, Yuan, Real, Ruble, Pound, Euro, etc...) nor cryptocurrency traders understand is that they are both linked in the same bubble market in the same way Microsoft Intel Sun-Micro and Oracle were linked to Pets.com, Audiohighway, and PurchasePro.com. "All ships go higher with the rising tide" is a common phrase describing how large sectors of world economies work, but this example is a slightly inaccurate description because the "boats" aren't actually in synch. Dominoes is probably a more accurate description of how bubbles collapse, in a "worse-first" order. When you blow bubbles, in fact, the weakest-formed ones pop first, and then after a certain amount of time, they're all gone. Let's take a comedic break before we elaborate on the currency bubble using a familiar comparison.

What will the wicked Witch say when we finish our 4-piece article...?

(what does he say at 0:42, gug-up? can someone please define that?)

OUR HISTORICAL MODEL: the "comparison"

The 2nd great bubble of the last 80 years, the Real Estate Bubble, is much easier to document than the internet bubble, bc the names are more recognizable to you the readers, so while we COULD document the timeline of the August 1999--> Fall 2002 internet bubble collapse and use it as our example, we find it easier to document the slow-motion crash of the Summer 2005 to March 2009 crash of the Real Estate bubble instead. So let's begin our timeline...

Summer 2015: Supplier crash
The builders like Lennar peaked WAY before home prices did. Stocks like Pulte Homes peaked as early as JULY 2005. That's WAY before everyone was watching their TV sets in horror in October 2008 as talking heads were explaining how home finance was crashing to a world population of onlookers. Lennar and Pulte and other homebuilders, heck, they were supposed to be the CATALYSTS of the continued boom in housing, not the canaries in the coalmines giving people cause to be scared. In fact, in July 2006, the homebuilders were a nice little buy, Pulte (NYSE: PHM) had dropped from it's 2005 peak of almost $50 to a bargain of $25 a year later. The price-earnings multiple was probably absurdly low. And do you know what? The homebuilders like PHM went from $25 to $35 by January 2017-- in 6 months. That's a rather sexy 40% gain in just a half a year. Now i know a 40% gain would bore people who owned crypto in the 2nd half of 2017, but to normal Joe Sixpacks, that's a great gain in a short time period. By Jan 2017 the homebuilders probably still seemed cheap by some earnings ratio, but they were FAR from cheap as Pulte would trade for $4 per share by 2011. Without worldwide money-printing stimulus by nations everywhere, builders like Pulte would've realistically gone bankrupt many times over. Let us fast forward a whole DECADE later; Pulte, one of the strongest of the homebuilders (weaker ones went bankrupt in 2009-2011), has still only recovered to about $20 per share since it's 2011 lows-- a mere shadow of it's Summer 2005 peak valuation ($50). In retrospect, it all seemed so obvious, but the 50% drop in the strongest of homebuilder stocks wasn't the ONLY warning people had...

Volcanic Rumbling #2; the New Century ends
While Pulte and it's EFFICIENT homebuilding brethren were the canaries in the coalmine, there was another early indicator which everyone could have heeded, and it's name was New Century Financial Corp. New Century trafficked in the loans which catapulted home purchases at the end of the housing bubble, they called them (afterwards) "no-doc" loans. No-doc meant the borrower basically got a > 100% loan to buy property on nothing more than a handshake. New Century trafficked in these loans called "subprime" at the time, and was quite a popular stock during the good days of the Real Estate bubble. But since it trafficked in the most unstable loans, it was the first casualty. By early March 2007, right about when Pulte Homebuilder was making it's final long turn downward from that recent January "deadcat-bounce" high of $25, New Century was announcing a criminal investigation into it by government agencies, and a short time later declared bankruptcy. The world's investors were getting a look behind the green curtain, but the Wizards of Oz just say "PAY NO ATTENTION TO THAT MAN BEHIND THE GREEN CURTAIN". The big bankers got on TV and said (paraphrasing, but not terribly so!) "pay no attention to this subprime scumbag lender, WE have no subprime exposure, only the weak have died today". New Century's bankruptcy should have been all anyone needed to see the sh!t smeared all over the lending industry walls. But it wasn't, people STILL believed. How is that possible, that two huge indicators of the housing and loan industry were screaming "TROUBLE AHEAD" yet no one really paid heed?

In the next installment of how today's GREAT CURRENCY BUBBLE will end, we'll finish the story of how the Great Banking & RE Bubble crashed and how speculators fought it the whole way, to ruin. For now, imprint this scene in your head, and remember that only in Hollywood do the heroes realize they've been duped...