3 Minute Gold News
A Quick Read for Busy People
3 minute synopsis of a recent interview with Jim Rickards, author of Currency Wars, senior managing director at Omnis.
Topic:
Student Loan Crisis
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Jim Rickards
Yahoo! Finance – The Daily Ticker Interview with Lauren Lyster
October 2, 2013
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Student loans are the next sub-prime crisis.
In 2007, just before the real estate crisis began, there was about $1 trillion in sub-prime, Alt-A and all weak mortgages, Today we have about $1 trillion in student loans.
Jim is talking about the government market. There is a private market where it’s well underwritten and well guaranteed, but that’s a small slice. The vast majority is poorly written, with a lot of adverse selection. The default rates are going to go up. But they are vintages so you should expect them to go up further.
If they’re at 7% then expect them to go to 14%, then push its way to 20%.
We’re talking about hundreds of billions of dollars in losses. Right now they are off-budget. They are going to go on-budget because someone has to pick up the tab.
Jim believes the student loans are a way to prop up the economy.
The Treasury is shoveling money out the door. Telling anyone between the ages of 17 – 30 “Come and get it.”. Students have a high propensity to spend. If they have money they aren’t going to buy gold or open a brokerage account. Most of them are going to buy beer.
The Treasury is shoveling money to the students. The students are just writing cheques to the schools, or the Treasury sends it directly to the school. It’s going to extravagetnt facilities.
It’s another way of priming the pump and getting the economy going – off budget.
We’ve got to shut down governement because people can’t agree on spending priority.
This will make it worse. This will increase budget deficits and increase debt-to-GDP ratio.
This will put us on the road to Greece.
……………………………………
Another Week on Wall Street
words and music Elaine Diane Taylor
© 2012 Intelligentsia Media Inc. All rights reserved.
SOCAN/ASCAP
from the album Coins and Crowns
See the bankers wave the Wall Street wands
See the conjured piles of paper green
Now they’re betting all their tricks go wrong
They’re betting the world as you know it
If they win
You lose the whole world as you know it
Ever seen a long con?
Ever seen a tampered wand?
Ever seen the betters sipping tea?
Making bets just sipping tea
Well don’t talk back
Your betters
Your bankers are having a tee, hee, hee
Heyo heyo, just another week on Wall Street
Heyo heyo just another week on Wall Street
A little grease (Greece) is floating out to sea
Little PIGS (Portugal, Italy, Greece, Spain) are bobbing up and down
So send a storm and we’ll see
when the tide goes out who’s naked on the beach
Ever seen a long con?
Ever seen a tampered wand?
Ever seen the betters sipping tea?
Making bets just sipping tea
Well don’t talk back
Your betters
Your bankers are having a tea, hee, hee
Heyo heyo, just another week on Wall Street
Heyo heyo just another week on Wall Street
Who’s that wizard hiding behind that hedge?
Who’s that wizard hiding behind that hedge (fund)?
See the bankers wave the Wall Street wands
See the conjured piles of paper green
Now they’re betting all their tricks go wrong
They’re betting the world as you know it
If they win
You lose the whole damn world as you know it
Ever seen a long con?
Ever seen a tampered wand?
Ever seen the betters sipping tea?
Making bets just sipping tea
Well don’t talk back
Your betters
Your bankers are having a tea, hee, hee
Heyo heyo, just another week on Wall Street
Heyo heyo just another week on Wall Street
Elaine Diane Taylor 
“Most of them are going to buy beer.” Not exactly a ringing endorsement of our young people.
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Kind of a cute way of saying they’re probably not going to buy gold. :) I guess I need to go and buy some beer. I’m not keeping up my end of the Canadian economic student loan velocity model. :/
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We know most people will never buy gold. Hard concept to get your hands around. Unfortunately for the people with high student loans and not much opportunity available in the short term there is a problem.
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Yes, a big problem. Always good to look both behind and ahead. I see more people buying gold in the future – I’m an optomist. More are seeing the stats and not just the drama. Critical mass of some sort will come in time.
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We will have more buyers at higher prices. People like high prices.
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It’s okay. It’s a bell curve. Higher is just relative to when a person got in or out. Info like Jim’s interview here is opening eyes and adding to the info getting out there. Media can be a good thing. Social media can be a great thing.
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