Devlyn Steele: Is the 2022 Economic Bubble Going to Pop?

Devlyn Steele, the director of education for Augusta Precious Metals recently released a youtube video outlining his predictions for the U.S. economy in 2022.

Who is Devlyn Steele?

Devlyn Steele joined Augusta Precious Metals as their head of education and currently leads a team of agents in implementing one-on-one personalized educational webinars for each of Augusta's customers. 

In 2021, Steele began adding educational content to the Augusta Precious Metals youtube channel. This recent opinion piece asks "Is the 2022 economic bubble going to pop?" 

Devlyn Steele makes his case that 2022 may be worse than the dotcom boom of 2000 and the mortgage crisis of 2007. Please note, this is only Devlyn Steele's opinion and not to be taken as financial advice.

The entire youtube video can be watched here:

If you prefer to read Devlyn Steele's 2022 economic predictions, we've transcribed the main content below - slightly edited for clarity.

Enter Devlyn Steele:

We're in a big financial bubble. It's time to get serious. What is economically going to happen in 2022? 

As far as how you should invest, do your own research and check with your trusted circle. First order of business, nothing is predictable.

We have never faced the challenges we face here in 2022. 

So anyone telling you what they know is going to happen is refusing to admit they're just giving you their best guess.

Here's Devlyn Steele's best guess. 

Devlyn Steele: We're in an Economic Bubble

Think of an economic bubble in the same way you'd think of a balloon. How does a balloon get bigger? By pumping more air into it.

As that balloon gets bigger, you think it's going to pop. But then it gets more air and gets bigger and bigger.

Economic bubbles are the same. They get bigger and bigger by the amount of money you pump into an asset. You can clearly see the asset price rising as it gets bigger. You don't know when that bubble's gonna pop either, but you know it's gotten too big!

It started in the 21st century with the tech bubble pop. Investors actually thought that every tech IPO was going to go to the moon and poured too much money into them, elevating them above true value. Eventually like all bubbles it popped.

And once again in 2007, where Devlyn Steele predicted the housing bubble, investors did the same thing. Loan levels were obviously getting too big and elevating real estate way above true value until it too popped and took down other markets with it. 

This happens over and over again in cycles. But people keep doing the same thing over and over again.

Related: Request more information from Devlyn Steele's team at Augusta Precious Metals

Let's fast forward to 2020. 

If you'd use common sense, you'd see that the economy has not grown since the health crisis. So how did values increase? 

This can be directly related to the Fed intervention and government stimulus. Over six trillion dollars was pumped into the economy. Most of this did not go into the banks because of the low interest rates. 

They went into paper assets, elevating these paper assets above true value. This is exactly how bubbles get created. 

It's easy to ignore the dangers in the economy when the values of your portfolio are going up, but that's what a bubble is.

It's all fun while prices are going up - until they aren't. Financial advisors were not telling people to sell their positions in 2000 and 2007 before the bubbles popped.

They say things like "you'll be ok in the long run." But if you're retired or near retirement, the "long run" might be too long. 

Financial institutions have computer programs that sell as soon as an asset hits a threshold that's too low. Why don't we all do that?

Greater Fool Theory

You know the old saying, "a fool and his money are soon parted." In fact in economics, there's a theory called the greater fool theory, which states:

Investing according to the greater fool theory means ignoring valuations, earnings reports, and all other data. Ignoring the fundamentals is of course risky and so people subscribing to the greater fool theory could be left holding the bag after a correction.

What this means is that we do not know the value of the assets that we invest in. We simply believe in market momentum that there will be a greater fool down the road to pay more for that asset - until there isn't.

Then you're the last fool and you lose.

Related: Request more information from Devlyn Steele's team at Augusta Precious Metals

Remember, Devlyn Steele is not giving investment advice or telling you to sell anything, but it's his opinion that we're in a bigger bubble than we where when he predicted the crash in 2007. 

Just like how a balloon gets bigger with the more air you pump into it, this economy today has had more money pumped into it than 2000 and 2007 combined.

Many feel the same way, including Michael Burry from "The Big Short." Burry made hundreds of millions calling the housing bubble. He said that the recent surge in stocks reminded him of the dot com bubble. He warns that dangerous levels of speculation in meme stocks, cryptocurrencies, and other assets will lead to the mother of all crashes. 

It's 2022 and it is time to get serious. 

It should be obvious to most of you that we're in a bubble. Remember, no one is ever going to tell you to sell anything. It's up to you to position yourself so that you can be prepared. 

Just like in 2007 when Devlyn Steele warned people of the housing bubble, most people will sit still and get crushed once again.

Maybe you're a little bit different. In the end, talk to your financial advisor and do what is right for you. If you like Devlyn Steele's above video and want more like it, make sure to subscribe to Devlyn Steele's updates on Augusta's youtube channel here. 

If you'd like more information from Augusta Precious Metals and to schedule a personalized webinar with Devlyn Steele or a member of his team, click here.