This is an interesting thread. I think the next great bubble is the biggest current fear with Central Banks. I am reading article after article on why the FED needs to lower interest rates, which by the way is the source from which bubbles arise. The articles never seem to mention the risk associated with such a move. I saw an interview with Martin Feldstein (Greenspan’s first choice for Fed Chair and probably THE top economist in the country) this week on CNBC. He is the biggest advocate of a 100 bps cut to avert what he sees as a disaster looming. Even if the Fed cuts he indicated we only may avert a major recession…..with a little luck. The reporter did confront him in the interview about cutting in the face of $80 oil, a historically weak dollar and $715 Gold. He acknowledged those risk which are very inflationary / stagflationary and indicated that rate cuts were the lesser of two evils. In my mind rate cuts totaling 100 bps over the next 6 months equates to a Hail Mary pass. If that injection of liquidity finds its way to energy, commodities, precious metals, AG etc and momentum builds to form a bubble that will be a disaster. If a bubble forms in these areas that just means everybody pays much higher prices which is better known as inflation. The market is anticipating a fed rate cut and we have $80 oil (and going up), a historically weak dollar (and going down) and $715 Gold (and going up), that is not a good sign of things to come. I guess we can hope Larry Kudlow is right and a rate cut will strengthen the dollar…we will see.