Yale Economist Warns Of Bubbles 'Literally Everywhere'

Deflationary pressures are lapping the shores of countries across the world and financial bubbles caused by "cheap money" are set to burst everywhere, Vikram Mansharamani, a lecturer at Yale University, told CNBC on Thursday. "I think it all started with the China investment bubble that has burst and that brought with it commodities and that pushed deflation around the world and those ripples are landing on the shore of countries literally everywhere," Mansharamani said. Mansharamani noted that financial bubbles had been created by "cheap money" from highly accommodative monetary policy across developed economies. Financial markets have been volatile since the start of this year. The U.S. benchmark S&P 500 index is down 2.48 percent this year, while China's Shanghai Composite index has declined more than 19 percent. The CBOE volatility index, a key indicator of market sentiment, was down 9 percent in the same period. "[W]e've got a bubble bursting, I would argue, in Australian housing markets that's beginning to crack. South Africa, the whole economy; Canada's housing and economy...we can go on and on," Mansharamani concluded.