What if, back in 2008, when Lehman Brothers, Bear Stearns, Merrill Lynch and many others were toppling like dominoes, someone said to you: “If you think this is bad, wait another decade, and an even bigger financial crisis will loom.” It would have been hard to believe, but it would have been correct. The same policies that created the 2008 crash were adopted and an even bigger bubble is now here. Ron Paul discusses.
AFAIK the context of this is. A bubble describes a significant sector of an economy being overvalued with the inevitable negative price correction expected to cause an economic downturn which will generate decreased tax revenues and possibly require additional state spending if institutions are being bailed out at taxpayer expense.
Many current sectors in the global economy are overpriced and expected to lose value on diminishing demand. We currently see this happening with the car loan subprime market. Living expenses and inflation are growing at a much faster pace in relation to wages. Inevitably we will reach a point where consumers can't afford things like real estate whose respective value will plummet as liabilities generally outpace the growth of assets. (Although in nations like the united states this trend is being offset by foreigners buying up US real estate, which will help to mitigate the damage but likely will only decrease the final dreaded outcome over the short term.)
No one may want to admit it but Ron Paul is probably right. The real question may be when these things will happen moreso than whether or not they'll occur eventually.
