Student debt bubble popping

[angelatc]

Tell that to Lisa Welchell who played Blair from the Facts of Life. The actress lost her entire fortune in the late 80s to the market crash. Too bad she didn't buy gold.

Too bad she didn't sit tight. IIRC, the market was under 3,000 in 1987. It's almost 13,000 today.

 

[nobody's_hero]

Too bad she didn't sit tight. IIRC, the market was under 3,000 in 1987. It's almost 13,000 today.

Well, 13,000 monopoly-money points, anyway.

 

[dannno]

that's because she was entirely invested in the stock market? Or what? had she even a house?

She had somebody managing her money, whatever was in the stock market was mostly lost.

Not sure too much about the details, but if you watch Survivor: Philippines she might talk more about it.

 

[Carsten2012b]

Is this good if I am about to enter college next year?

Same here, I'm not sure if I want to go now if its like this.

 

[The Free Hornet]

So I have 100k in student debt what happens to me when this so called bubble collapses? Will my interest rates go down? lol

I think the risk three fold:

1) There could be "degree" bubble - not necessarily an education bubble, so the value of the degree won't justify its cost. I.e., students get screwed. It's like having bought a house that is now underwater. Although one gets to pay it off with devalued dollars, that same person still lost a shitload of money.

2) After "1)", if the perceivied value of education drops, so might the tuition and legions of professors and administators could be laid off. That may not be a bad thing for the dead weight out there.

3) You suffer as we all do for unaffordable debt and all we might suffer in a currency collapse. lol?

But from just the student perspective, your attitude might be OK. Like Seraphim wrote, you need to make sure the degree is worth it (state-licensed doctor, bar-certified lawyer, professional engineer, gubblemint edumacator, et cetera).

 

[angelatc]

Well, 13,000 monopoly-money points, anyway.

True. So, if gold was $500 in 1988, and it's worth $1740 now....and the stock market was at ....say...2300 in 1988 (I am just guessing - I don't remember exactly when the recovery happened) and it's worth 12,900 now...

I think the market was the better investment.

 

[angelatc]

Same here, I'm not sure if I want to go now if its like this.

You almost have to. Unless you've the the entrepreneurial spirit, you won't be able to get many jobs. We already have a record number of college graduates working as wait staff in restaurants. Why should an employer hire a high school graduate when he can get a college grad for the same money?

 

[Danke]

Yes. Because a person who bought gold at $500 in 1988 had to wait until 2005 to get his money back.

Or a person who bought gold at 700 in 1980 had to wait until 2006.

What do we call somebody who buys something and can't get his money back for 17-26 years?

I started a decade ago.

I think my returns are quite good, especially compared to the stock market.

You choose to pick the peak of a run up in the 80's. Ya, that's a good sample...

 

[Tpoints]

I started a decade ago.

I think my returns are quite good, especially compared to the stock market.

You choose to pick the peak of a run up in the 80's. Ya, that's a good sample...

obviously nobody will buy something knowing it's the peak, they always buy thinking they are buying it cheaper than later.

it seems like everybody here is saying either gold or stocks, are there no third options?

 

[dannno]

it seems like everybody here is saying either gold or stocks, are there no third options?

Historically gold is the best store of value.

 

[Tpoints]

Historically gold is the best store of value.

what do you mean "historically"? what years do you use to make this statement?

 

[angelatc]

obviously nobody will buy something knowing it's the peak, they always buy thinking they are buying it cheaper than later.

it seems like everybody here is saying either gold or stocks, are there no third options?

I think the key is balancing the portfolio. Metals, stocks, real estate....I think bonds are off my list right now because the interest rates are crap. CDs used to be another fixed income option, but again with the interest rates.

All of these things are good to have even if we do go through a period of massive or even hyperinflation.

 

[dannno]

what do you mean "historically"? what years do you use to make this statement?

The beginning of recorded history until now.

 

[Danke]

True. So, if gold was $500 in 1988, and it's worth $1740 now....and the stock market was at ....say...2300 in 1988 (I am just guessing - I don't remember exactly when the recovery happened) and it's worth 12,900 now...

I think the market was the better investment.

July 12, 1976 1011 Highest point between Jan '73 and Oct. '82

Gold was around $130

See, let's play these stupid games all day long.

Oh no, March 6, 2009 6,626.94
Gold Price Close That day : 922.60

so do the math.

which is higher now...GOLD!

 

[Tpoints]

The beginning of recorded history until now.

is there anything else that's true since then?

 

[John F Kennedy III]

Rome's collapse was over 100 years. The USA is the modern Rome and it's collapse is a slow motion train wreck. It is impossible to say when, save for if you are capable of spotting the beginning of hyperinflation as it occurs.

Now, as I have stated - I am not a hyperinflationist. (Although I conceed it could happen).

My stated outcome is that of massive systemic devaluation, done in coordination throughout the Western world. My view is that the interconnectedness of Western balance sheets means that once the banking system as a whole truly starts to go down, there will be a system wide shut down. Western Governments will coordinate a full fledged recapitalization of the banking system; done in unison to "harmonize" the Western world and it's trading avenues.

This is far more plausible to me then hyperinflation.

A hyperinflation would, in my view, lead to a MASSIVE starvation and culling of the herd. Since the current order requires "growth" to maintain it's profit structure - a culling of the herd is not in line with their models of control. They want control over HUMAN LIVESTOCK. More human livestock = more resources created for the benefit of the masters.

The masses will be tested and raped - and then re-pacified.

They want to massively reduce the Earth's population.

 

[Tod]

They want to massively reduce the Earth's population.

Beat me to it.

Agenda 21, anyone?

 

[Zippyjuan]

July 12, 1976 1011 Highest point between Jan '73 and Oct. '82

Gold was around $130

See, let's play these stupid games all day long.

Oh no, March 6, 2009 6,626.94
Gold Price Close That day : 922.60

so do the math.

which is higher now...GOLD!

WE can pick all kinds of dates. Some will show one doing better over the selected time period, some showing the other doing better. It is difficult to do comparisons prior to 1972 though since the price of gold in dollars was set by the government- not the market.

If we want to look at the other extreme, start four years later with 1980 and end in 2001. Gold went down from $850 to $250. The Dow Jones was also about 850 that year but rose to over 10,000 by 2001. Which did better?- stocks by a huge amount.

 

[torchbearer]

WE can pick all kinds of dates. Some will show one doing better over the selected time period, some showing the other doing better. It is difficult to do comparisons prior to 1972 though since the price of gold in dollars was set by the government- not the market.

If we want to look at the other extreme, start four years later with 1980 and end in 2001. Gold went down from $850 to $250. The Dow Jones was also about 850 that year but rose to over 10,000 by 2001. Which did better?- stocks by a huge amount.

curious, what happened to cause the turn around?
would that be Volker's rate rise?

 

[dannno]

is there anything else that's true since then?

No, everything else degrades over time. Gold does not rust and degrade. It holds many physical properties that make it an exceptional choice for storing of value.