The next big bubble is farmland, says Robert Shiller

American property expert Robert Shiller has warned that agricultural land may be the "next big speculative bubble".

Shiller, who developed the eponymous Case-Schiller house price trend index, has a pretty good track record when it comes to spotting bubbles (even if he can be a little early). Between 2000 and 2005 he repeatedly warned that US property was due a correction a very contrarian stance at the time.

Nowadays, Shiller's favourite "dark-horse bubble candidate" is farmland. One reason is that today, agriculture has "a "new era" story attached to it". Stories about global warming and "snowy winters" are "contagious" and are making investors worry about food prices. Even "the day's top story, the revolutions in the Middle East" are connected to food prices.

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Farmland is already booming, but these narratives paint "a scenario of food shortages and shifts in land values in different parts of the world, which might boost investor interest further". The "continuation of today's commodity-price boom" is another reason.

But Shiller is keen to point out that"big speculative bubbles" are not easy to predict. For one, they are rare. The 70s saw the only US farmland bubble in the entire 20th century. What's more, because they last for many years, predicting them is "a bit like predicting who will be running the government two elections from now".

Still, investing in bubbles can be profitable, says Shiller. But he warns would-be "daring investors" that "it is not enough to find a bubble to pile into. They must also try to determine when to cash out and put their money elsewhere."