Bubble Indicator Flashes Global Warning Sign 

Recently we have come across news that seem to confirm that the global central bank printathon in the wake of the GFC has indeed created a major bubble on a global scale. This implies that the denouement of the bubble will likely be globally synchronized and may accordingly turn out to be quite intense. 

We were very surprised to learn that the number of buildings classified as “super-tall skyscrapers” (with a height of 300 meters or more) has in fact doubled since 2010. It took 80 years to build the first 50 super-tall skyscrapers, and just five years to build the next 50! This is an astonishing datum – an awesome monument to bubble excess. Here is a chart from Bloomberg illustrating the historical trend:

 

Conclusion

Based on the skyscraper index, we appear to have experienced one of the biggest booms ever – as uneven as it has been, with real economic growth generally not much to write home about in most parts of the world. The same can obviously not be said of asset prices, which have benefited greatly from the flood of money unleashed by central banks in recent years.

DYI