The New Normal Boom: US Secular Stagnation (Video)

Nobel-winning economist Robert Shiller told CNBC that he sees another big bubble forming throughout the United States. He calls this boom the “New Normal Boom” and warns that deep down, investors believe the US economy isn’t truly recovering.

Highlights from Shiller’s interview:

“We’re not so good at even recoveries these days. There are places in the United States that are really in bubble territory. For example, San Francisco. It is hot, hot, hot. They’re going way over the asking price; every house sells quickly. It looks like a boom. But you know, San Francisco is a city which has a history of booms. There seem to be certain boomy places. California is booming. Why is that? You have to go there and live. They have a sort of high-strung mentality. It’s sort of a sense of their own importance. I shouldn’t say this. I’m not a Californian. London has the same problem, by the way…

“When [does the economy start doing well and the markets start doing badly]? I wish I knew that… There is a secular stagnation story, which is a powerful theme right now. I consider that a thought virus. In the sense that it’s become implanted in people’s minds and it’s become a source of worry. I think a lot of people feel that down deep [they] know we’re not getting out of this. We had a sort of recovery in the US, but I don’t know whether we’re sinking back into a ‘new normal.’

“In my new book, I like to name booms. I don’t think we’re very good. We have an official body that names hurricanes… I call this the ‘new normal boom.’ It’s a funny boom in asset prices, because it’s driven not by the usual exuberance. It’s driven by an anxiety.”

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