The Next Big Bust: When? Why? How Big?

We live in South Florida; we know what storms are all about.

Torrential downpours are common. But they’re a small sacrifice for living in paradise the rest of the time.

The big danger is the next Big One, a giant Category 5 hurricane like the giant Labor Day Storm of 1935, Andrew (1992) and Irma (2017) all at once.

Ditto for the stock market and the economy…

Temporary dips and stalls are a small price to pay for the double- and triple-digit returns you can reap in a long bull market.

The big concern is the next Big One — a bust akin to 1929, 2000 and 2008 rolled into one.


This is not idle fear-mongering. It’s a real possibility based on undeniable history.

The Tech Bubble and the Housing Bubble

In the past two decades, we’ve experienced two gigantic asset bubbles — first in tech stocks, then in housing.

Both were driven by unbridled financial engineering. Garbage initial public offerings (IPOs) like or Webvan. No-asset, no-income mortgages issued by the likes of soon-to-fail companies like Washington Mutual or Countrywide Financial.

Both were fueled by over-the-top monetary policy.

And both were followed by two of the greatest crashes in modern history: The tech wreck of 2000 to 2003 and the housing bust of 2007 to 2009.

The big difference: Now, the bubble is larger, and the ensuing bust could pack a bigger wallop.

To understand why, set aside fear and hope. Focus strictly on the facts:

Fact No. 1. To combat the early 1990s recession and savings and loan collapse, the Federal Reserve dropped the fed funds target down to a low of 3%. Then it kept it there for 17 months.

The Fed also printed around $70 billion during the policy-easing cycle, boosting the monetary base by 22%.

That was crazy. So crazy, in fact, it was a major factor that inflated the tech bubble that ended in the tech wreck.

Fact No. 2. To combat the tech wreck, the Fed slashed its benchmark rate from 6.5% to 1%, and kept it there for 12 months. It also printed $125 billion, boosting the monetary base 19%.

That was crazier. So much so that it helped create the biggest housing bubble ever, which ended in the worst housing bust, financial crisis and recession since the 1930s.

Fact No. 3. To rescue the economy from that disaster, the folks at the Fed went stark, raving mad. They shoved interest rates to the floor like a sumo wrestler.

They sat on zero rates for 84 months. And they printed more than $3 trillion too, boosting the monetary base by 370%!

Fact No. 4. Federal debt is off the charts. It has exploded 3.5 times since the start of the millennium, from $5.7 trillion to $20.2 trillion, with the lion’s share of that debt buildup coming in the last eight years.

Fact No. 5. More so than anytime in history, the madness has gone global, with a total of 667 interest-rate cuts worldwide and more than $15 trillion of global money printing.

Fact No. 6. Governments have bailed out a lot more kinds of assets than ever before. Not just banks and bonds markets, but also manufacturers, insurance companies, brokerage firms, stocks and exchange-traded funds (ETFs).

This is especially true in Japan, and as a result, its central bank’s balance sheet is now so bloated, it represents nearly 100% of the country’s entire gross domestic product (compared to just 20% before the housing bust).

Fact No. 7. In a stable economy, people’s asset values should rise pretty much in tandem with their income. But that’s not what happens in a bubble economy. Instead, asset values are inflated to kingdom come while their income falls far behind.

When they get too far out of whack, you can almost bet that a big bust is not too far away:

Tech Bubble Housing Bubble

That’s exactly what happened just before the tech wreck of 2000.

It’s also what happened before the housing bust of 2007, only worse.

And it’s also what we’re seeing today — the worst of all.

Never before have we seen a wider gulf between inflated asset values and the rewards of actual sweat-of-our-brows work!

Never before have we seen a global speculative bubble that is so extreme and so broad.

In fact, it’s so widespread, we can find no appropriate words to describe it except perhaps…

The Everything Bubble

It’s like the Blob. It engulfs every asset imaginable.

Stocks of all colors, types and sizes … so-called “safe” government bonds and ultrahigh-risk junk bonds … small homes in Texas and billionaires-row condos in Manhattan … avant-garde artwork and Old World masterpieces … collectibles, trinkets and trophies.

Last November, Leonardo da Vinci’s Salvator Mundi sold for $450 million, more than double the previous auction record for any piece of art in history.

A 31,500-square-foot penthouse in Monaco recently went up for sale at a world record $335 million.

A 1952 Mickey Mantle baseball card hitting the market later in March is estimated to fetch at least $3.5 million, dwarfing the previous record by at least $400,000.

My father used to say: “When the stock market’s about to crash, no one on the exchange is going to ring any bells.” No, maybe not on the exchange.

But for the alert observer, every factoid I’ve given you today is a telltale sign that leads to one singular conclusion…

It’s almost time.

The bear market may take a while to emerge. But the bull market in asset values is on its last legs and could soon begin to die.

A major top in the stock market is forming or about to form.

A new crisis — this time in sovereign debts — is closing in.

Any bear market that follows is bound to be very, very severe.

The good news is that you still have time to prepare.

Stay tuned for how and when.

Best wishes,

Martin D. Weiss, Ph.D., and Mike Larson

  • Charles Burton

    My guess is a short scare drop, maybe doubling the recent correction, followed by a boom out to a new peak, then a collapse. Could happen later this year, or early to mid 2019. Perhaps not exactly Larry Edelman’s timing, but close. I did predict the recent correction for late Jan to early Feb. Seems like it should have been scarier, so maybe not yet over. No basis except a “feeling”, for what it is worth. It seems about time, and Trump’s policies could bring it on, like Hoover’s did in ’28 to ’30. He could be elected again unless the Dems can find a real leader. No other Reps in sight. American leadership seems to have evaporated. China is coming on strong. This is my viewpoint at 89, having grown up under Roosevelt and Truman, something of a leader in spite of himself.
    Chuck Burton

  • Scot

    How can stocks have a big decline (at least in the next few years) when there is no other place for the big money to park, especially when the govt bond bubble pops? You should know economies always collapse from the periphery to the core. The rest of the world holds much more debt than the US, mostly denominated in $US, which means when rates and the dollar rise, these foreign entities will blow up. The smart money moves in anticipation, which is why stocks are as high as they are in the face of a lack luster economy, at best.

  • Mike

    What me worry? Let me see, we have a Republican President, a Republican Majority Congress and a Republican nominated Fed Chairman. The only two Stock Market Crashes and Depression of 1929 and 2007 in the last 100 years had the same mix.. What me worrry….? Well maybe a lot, aye?… 🙁

  • Chad Burns

    Would love some up to date guidance about Larry Edelson’s predictions. Will precious metals and miners ever skyrocket like he said they would? What about oil? He said 31,000 on the DOW then 45,000, are you saying we’re not going that high? Thank You Martin.

  • mkvz777

    Am I the only one here who is starting to look sideways at Martin Weiss? I usually only listen to folks who have what I call a sense of integrity. I purchased a program from Larry Edelson, a life time membership to a “gold mining” service. Out of the blue, Martin gave that program to Banyan, and all my calls an email produce know satisfactory answer. Then, he suggest I spend more money on new programs?It probably hurts most because I have been recommending Weiss, for the last 20 years.

  • OC GMBeverlyHills

    Just a couple of months ago Martin Weiss was promoting the start of the longest stock bull market. If these guys are so good, why are they selling fake news?

  • Don Ho

    Remember the world is a difference place since 2007, foreign economies have expanded 10 fold e.g. China, AESAN, BRIC, even in Africa some countries are beginning to emerge. What this means is that there are huge new markets generating huge amount of capital and expenditures on goods and services.

  • Dls2k2

    Of course you should look sideways at Martin. He has a biz to run and he’s a consummate salesman who plays the fear/greed card w/ relentless intensity (see above article). But be thankful for the switch to Banyan. The guys there are more responsive and deliver considerably more value than Martin allowed for any of the “entry-level” services at Weiss, Inc. I am quite content with the change and would not wish it reversed. Thank you, Martin!

  • Dls2k2

    Larry’s prediction machine (AI) seemed fairly good, and I am guessing that as Weiss Inc. now presumably has control over the software that they will only apply it to their high-end services. So you might get that guidance only if you are willing to pay the high price. And of course there are no guarantees that the predictions will be correct, or that the person running the service will get the timing right. Even Larry himself was unable to make us any money on gold’s bottom in Jan 2016 despite pretty accurately calling it with his AI.

  • Lachlan Crisp

    Your commentary reads ” every factoid I’ve given you today is a telltale sign……….”

    Why do you give us false news? See Merriam-Webster dictionary:

    Definition of factoid
    1 : an invented fact believed to be true because it appears in print

  • Bob

    Martin, you previously believed that sovereign debt in first Japan then Europe would inflate our stock market over the next 1-2 years. Is that still your position? Finally, do you seriously believe that the U.S. in particular will not sweep in and soak up all excess liquidity in our treasury market, despite the cost, to preserve dollar and treasury stability? I think the fed has been playing unfair for many hers and if what you say is true, we will all see the most unfair market conditions in history. What you say is true, but central governments no longer play by the rules. And by the way, why is gold and miners so weak with all the uncertainty and volatility that exists today?

  • Mike

    Dear Dr. Weiss,

    Quite the rewrite on the recent financial history. What about Reagan’s huge tax cuts to his wealthy supporters which made the deficit go to the moon ever since? What happened to the removal of the Glass-Stegall Act (that allowed the return of the highly toxic trading of the 1920’s that brought the sell off;s of 2000-2002 and 2007-2009) in 1999 by the Republican Majority Congress or the removal of the “Inner Cities” Restriction (which allowed the “liar loans” to go nationwide) (also by the Republican Majority Congress) of Barny Franks bill to rejuvenate the Inner Cities?

    The only thing that can implode this market is Dump an he is well on his way to doing that. Have we ever seen a more crazy President than now? Hopefully Larry Kudlow can talk some sense into this blowhard. If not, this market is doomed as more and more who bought his bilge are now realizing they were conned and are getting out of the market as fear is beginning to take over!… At this rate, one more firing of the sane, like Kelly or Sessions (to stop the Russian Collusion Investigation) ought to do it!… 🙁

  • Charles Burton

    I see that, in the first by-elections (MS and PA), Dems won, eroding the House Rep majority. Could this be a harbinger of 2020? Or even ’18? Mr. T is not really making his supporters all that happy. But what Dem will oppose him? I don’t see one on the horizon. Jeff Bezos, with his Amazon base? How would that translate politically? As I said, American leadership skills seem to have evaporated.
    Chuck Burton

  • HollyAnn2008

    You just can’t get your politics out of it, can you?

  • Mike

    Actually Holly,
    It is called History. You might want to check it out. The above are facts. What the RNC over looked the above?… How unusual… 🙁

  • randy

    What newsletter is Mike Larson writing that covers the overall economy? Mike had some great calls on shorting the big banks and mortgage companies. Gold and Silver both look weak to me according to technical analysis. Of course the overall indices were so overbought before the correction, it was insane. These descending triangles on the DOW30 & SP 500 looking bearish, and all indices are still overbought, despite the correction, so, I expect another move down.

  • Mike

    Since you’ve grown up in the “Golden Age” (Of mostly Democratic Leadership) you must remember and notice the similarities of 1929 (Hoover-R) and 2007 (Cheney/bush-R) tops and the 1932 (FDR-D) and 2009 (Obama-D) bottoms. With that history in mind, the 2018 and 2020 elections had better go Democratic if this Rally (Brought by Democrats) is to continue, aye?

  • travis690

    I agree; this is a bubble market in everything. And when it pops, it will be a debt-driven depression, which will see asset values collapse because (almost) no one will have the money to buy. There will be people trying to have a fire sale on their assets, but because price has been destroyed as a market force due to Federal Reserve actions in the last 30 years, people that do have money will be afraid to spend it.

    I am aiming for a 50/50 split between gold and cash to prepare early. It’s better to be a year early than a day late.