We had the "dot com" bubble and then we had the housing bubble. You'd think we'd learn our lesson, right? Apparently not.
Due to constantly rising healthcare costs, Citigroup economist Steven Wieting says the healthcare industry will be the cause of the next big bubble. And as if his analysis wasn't scary enough, he also suggests it will be bigger than anything we’ve seen before.
“It’s not a single asset price that’s about to pop (like housing) and it doesn’t have a cyclical component,” he explains during a live interview on CNBC's Fast Money.
“It’s a fundamental bubble that will have a large impact on the economy," he added.
Watch Wieting explain the possible new bubble (via CNBC):
Wieting went on to explain that healthcare costs are growing at a pace too fast to support.
“Ultimately there will be a price to pay” he says.
Because companies and governments already try to support the rising cost of healthcare, Wieting predicts these costs will cut into budgets.
“We’ll either have to raise taxes or increase budget deficits in order to finance it. And it will crowd out other things. Already we're starting to see it impact education and infrastructure spending," he said.
Co-host Jon Najarian added to Wieting's prediction by saying that it might get to the point where people will be forced to decide which healthcare products they can do without.
“This kind of thesis doesn’t bode well for medical device makers such as Intuitive Surgical the maker of daVinci. And it’s probably negative for implant makers like Stryker,” he said.
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