the next bubble...


moralist

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Just as the sectors of mortgage debt and healthcare insurance have succumbed to the moral inevitability of people getting what they deserve...

...the next is education.

Many times before I've mentioned avoiding becoming contaminated by these malignant cancerous economically toxic sectors...

government
credit
debt
insurance
education
healthcare
law
unions

...and the death list is being checked off, one by one, just like clockwork.

This is the template:

The false gods in which you misplaced your faith so that you could ~feel~ safe and comfortable and protected and cared for...

...are the very ones which will be ripped from your grasp.

Greg

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while I agree that the price and benefit of post education is perhaps overblown (way overblown for price) I'm trying to figure how this ties into my classical definition of a bubble. Usually it is when large numbers of people invest in something just because the price is going up, then the price collapses and the items/infrastructure isn't worth a fraction of what was paid. In your example though, people aren't buying into it because tuition is going up (though they are because they do think there will be a return on investment) but majorly, I don't see how the bubble will burst (in my classical definitive way) The bubble for dot coms didn't break because the prices got too high, neither did the bubble for houses, railroads, or tulips. But the way I foresee the end too the education rush is because the price will simply get too high. Huge numbers will be priced out and then the colleges will be out of revenue, therefore supply and demand will correct prices. As a side not, of course prices cannot be corrected as long as loans are continually made available which artificially inflate what the average person can pay and thus inflates the price.

So in the end, I do see it falling apart but I dont see it as a "bubble" per se......

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So in the end, I do see it falling apart but I don't see it as a "bubble" per se......

Ok... you don't regard over one trillion in debt as a bubble... and I do.

o-COLLEGE-COSTS-570.jpg?6

Note the "public" line. Government subsidization of education is what removes the cost control and drags the rest up with it.

The mass stupidity of "students" is absolutely breathtaking. The babies will be wailing for their mommie government to bail them out.

Greg

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maybe you didn't (or did) read my whole statement. I agree that the cost is out of hand, I agree that college isn't for everyone, and I agree that this whole thing will blow up in somebodies face but I dont see how it compares to other bubbles when I think of the circumstances surrounding them. This seems like a bad investment sure, but I dont know about a bubble. For example, if everyone made Amazon their main place for retail for retail and then Amazon collapse under debt that no one knew they had... I wouldn't consider them to be a bubble. The fallout would have simply been based on based business judgment.

As far as I've seen, bubbles occur when average folk start buying into something just because the price goes up, the college thing doesn't seem to be the same, but I could be wrong....

btw, I didnt need your graph on college debt to agree with you. I graduated in 2005 and since I've seen tuition double (glad I got finished when I did!)

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maybe you didn't (or did) read my whole statement. I agree that the cost is out of hand, I agree that college isn't for everyone, and I agree that this whole thing will blow up in somebodies face but I dont see how it compares to other bubbles when I think of the circumstances surrounding them. This seems like a bad investment sure, but I dont know about a bubble. For example, if everyone made Amazon their main place for retail for retail and then Amazon collapse under debt that no one knew they had... I wouldn't consider them to be a bubble. The fallout would have simply been based on based business judgment.

As far as I've seen, bubbles occur when average folk start buying into something just because the price goes up, the college thing doesn't seem to be the same, but I could be wrong....

btw, I didnt need your graph on college debt to agree with you. I graduated in 2005 and since I've seen tuition double (glad I got finished when I did!)

I did read your words, Derek... and only pointed out the one place where we each had a different view.

There is another factor missing from your assessment, and one which denotes a classic bubble. With so many college grads with useless degrees out begging for jobs, the value of those degrees becomes degraded. Some degrees being so commonly held even to the point of being worthless in the Capitalist free market. Take a critical mass of grads with worthless degrees still living at home with their parents while carrying the massive debt of student loans...

...there's yer bubble. :wink:

The chart was just to show how people demanding government subsidies cause bubbles. Insurance, mortgages, healthcare, education... all following exactly the same bubble template with everyone expecting someone else to pay their bills. It's just the same mindless stupidity expressing itself over and over in different economic sectors...

...and they're all going down.

Greg

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  • 1 month later...

Bubbles are really IMO something out of " Extraordinary Popular Delusions and the Madness of Crowds " , the tulips , etc .

1987 was a crazy bubble that really burst !!! I agree on the housing crisis you guys had down there too , obviously .

I do recall Mark Cuban writing about the education bubble recently , I will try and find it tomorrow but you Google gangsters will probably link it well before I do . At Stanford recently and they were raising something like $4 billion over 5 years !!!

Actually Bob Hessen was the one who took my daughter Kira and I around the campus , OMG !

Personally , I do not think that the bubble is here . The Universities have so much money , they are gonna fight the fight and they have more cash than the Fed can print .

Peter Thiel though is on it !!!!!!!!

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Bubbles are really IMO something out of " Extraordinary Popular Delusions and the Madness of Crowds " , the tulips , etc .

1987 was a crazy bubble that really burst !!! I agree on the housing crisis you guys had down there too , obviously .

And the education "crisis" will also be just as obvious... but only after the trillion dollar debt bubble bursts in default, and mommie government bails out her babies again at taxpayer expense.

The education bubble is a similar insanity to the tulip mania. That a piece of paper from a liberal socialist government subsidized medrasa is an ironclad guarantee of a lucrative job. Everyone blindly grasping for the piece of paper degrades the value of the paper until all they are capable of doing is drowning in debt at home with their parents and working at Starbucks. Today, unprecedented numbers of adults are still living with their parents because they can't make it on their own.

Contrast that well trodden road with the one less traveled... those who fled the anti American medrasas paperless to instead become self motivated creative innovative independent American Capitalist entrepreneurs. They couldn't be satisfied being a cog in someone else's machine. Instead they built their own machines. :smile:

Greg

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