"How can you judge whether there is a bubble somewhere or not? Well, there is a simple criteria. What is not sustainable in the long run is a bubble period. Let's say you have a global economy that increases by 3% in real terms and an inflation of 2%, thus a nominal GDP of 5%. If then something goes up by 20% - be sure that there is a bubble (laughing)! The rule is, nothing can grow ad infinitum at a higher rate than nominal GDP. Neither corporate profits, nor equities. I conceive that some asset prices like a Picasso painting appreciate more than nominal GDP, but not all assets. This simply doesn't add up. I don't really think you need to be a genius to see a bubble."
