Yale Economist Robert Shiller, who has achieved international recognition for his work on asset bubbles, has identified farmland as the next potential bubble. In his column titled Bubble Spotting on the web site Project Syndicate, Shiller discusses asset bubbles and says in answer to the question of where the next speculative bubble will be: "My favorite dark horse candidate for the next decade or so is farmland."
His column discusses stocks and the housing market as well as the commodity market. He leans to farmland because it is tied to the commodity market which has a "new era" (his term) story attached to it which includes new energy demands due to a colder and snowier winter in the northern hemisphere, global food production impacts due to global warming and food shortages leading to political unrest in the Middle East. He emphasizes bubbles are difficult to predict and can take a long time to develop because they are "social epidemics, fostered by a sort of interpersonal contagion." It seems he's talking about a crowd mentality acting in unison on an idea or set of ideas. It's interesting reading. Check it out here.
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