Of course, the feds are trying to stop this process. They fear a Japan-like slump – long, slow and impossible to reverse – or even a Great Depression-like crash...with even greater suffering for even more people.

What can they do about it? They can make money and credit more available to the banks. That is what they have done – with mixed results so far. While the Fed has pushed down on short rates, for example, most borrowers’ cost of money has actually gone up.

The feds can also try other tricks – such as tax rebates. Or, they could actually step in and buy mortgages. These measures do not really prevent losses. The losses are already there. All they do is take them away from the people who deserve them and distribute them among the public, often in ways that are hard for the voters to understand.

None of these things are likely to set off another boom on Wall Street or in the economy. Any way you look at it, consumers are squeezed...and the financial industry (which was to blame for the bubble of the last few years) is now in decline.

It is very rare for a bubble to re-inflate. Usually (in fact, in every case we can think of) when a bubble deflates in one sector...the next bubble will occur somewhere else, normally in a rising market.

The bubble in Japan of the ’80s was followed by the bubble in the United States of the ’90s. Japan still has not recovered. And the bubble in the United States of the ’90s was centered in the tech area...on the NASDAQ.

That sector crashed and has never recovered. The next bubbles were in residential property and the financial sector, notably in private equity, hedge funds, and derivatives. Those bubbles have popped too...and are losing air fast. They will probably not reflate in our lifetimes.

So, a logical question: where’s the next bubble?

“It’s in emerging markets,” says  Manraaj Singh.

“Haven’t they already had a bubble?” we ask in response.

No, was his answer. They’ve only had the beginnings of a bubble. They are rising markets...but not crazy markets. What we’re seeing now is a correction in many emerging markets, but not a change of the underlying trend.

Manraaj argues that the same mechanics that puffed up a bubble in residential housing and financial services is now at work in emerging markets. The financial authorities of the West are making more money and credit available to aid their aging, debt-burdened economies.

Many foreign nations – China and the major Gulf oil exporters, for example – tie their own currencies to the dollar and their economies to that of their biggest customer – the U.S.A.

When the Fed cuts rates, as it did to try to save the tech sector and cure the recession of 2001-2002, the credit goes somewhere...but not necessarily where it was intended to go. In 2002-2007, it went into housing and finance, not into the deflating bubbles.

Now that the Fed is cutting again, the emerging markets will be the ones to reap the benefits of the easier credit...so you can look new bubbles there.

Latin America was the best performing region over the last three years – with annual returns of 47%. And the best single market over the last three years was Brazil – with annual returns of 56%.

Are these spectacular returns the peak of a trend...or just the prelude to the next bubble? Perhaps Manraaj is right: the next bubble will be in these hot emerging markets.

Another possible focus for the next bubble: GOLD.