Where We Have Been Wrong
In the first edition of Aftershock we admitted that there is one area in which we have been wrong before, and we will likely be wrong again. And now in this second edition of the book, we have to repeat that admission again. Timing exactly when each bubble will pop in the Bubblequake and Aftershock has been and remains nearly impossible to accurately predict. For example, in the last book we said the coming Aftershock could begin as early as 2011. But since we wrote the last book, the U.S. government has intervened in many ways to delay the coming economic collapse. For example, they enormously increased their borrowing, bailed out many of our largest financial institutions, bailed out our auto companies, gave significant tax credits to home buyers, put less pressure on banks to foreclose on defaulted mortgages, and began a program of massive money printing (see next chapter)—all of which helped temporarily support the sagging multibubble economy and delayed the inevitable fall ahead. (All this economic stimulus, by the way, is only going to make matters worse later, by putting more pressure on the debt and dollar bubbles, as you will see in Chapters 3, 4, and 5.)
In addition to huge government stimuli of various kinds, there is possibly some degree of manipulation of the markets for the purposes of keeping investor’s psychology from turning too negative (for more on this, please see the Appendix).
So for a variety of reasons, our timing was a bit off in ...