The 'Everything Bubble': When central banks turn markets into slot machines

Health · Published 19 October 2026 Swipe more like this →

In short: During the pandemic, global asset prices surged to historic highs simultaneously—from stocks and real estate to cryptocurrencies. Critics argue this wasn't organic growth but a manufactured 'everything bubble' created by aggressive central bank policies, leading to a massive disconnect between market valuations and economic reality.

The term "everything bubble" describes a phenomenon where asset prices across nearly all categories—equities, real estate, bonds, commodities, and cryptocurrencies—inflate due to quantitative easing. While the concept emerged during Janet Yellen's tenure in 2014 as a strategy to boost growth via asset price inflation, it reached its zenith under Jerome Powell. The US experienced record-breaking financial ease under Powell by early 2021, driving various domestic assets to peak historical valuations simultaneously.

This era was characterized by extreme speculation and a breakdown of traditional price discovery. In February 2021, several metrics hit record highs: the Buffett indicator surpassed 200% of GDP, the Citibank Panic/Euphoria Index broke its dot-com peak, and the S&P 500's forward EV/EBITDA exceeded 17x for the first time. This "Great Gatsby-style boom" occurred despite a global recession, leading many to conclude that central bank intervention had suspended the market's usual role in determining value based on fundamentals.

The bubble began to "prick" in 2022 as rising inflation forced the Federal Reserve to pivot toward quantitative tightening and higher interest rates. This shift triggered a synchronized fall across most asset prices, leaving the global economy with what historian Edward Chancellor calls an "inflation hangover." The phenomenon serves as a stark case study on how monetary policy can decouple wealth from productivity, potentially widening inequality while creating systemic risks when the liquidity eventually retreats.

While Powell argued that these bubbles would promote job growth and reduce inequality, critics like Mohamed El-Erian pointed to the enormous disconnect between valuations and reality. The period also saw a proliferation of SPACs—notoriously poor-performing assets—raising record capital, which many economists view as a primary signal of an economic bubble.

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