Juggling Dynamite

A bubble in student debt, enabled by central banks and underwritten by governments, has allowed post-secondary education costs to balloon more than 9% a year since 2000.  Meanwhile incomes have stagnated and job opportunities narrowed. The education delivered is not more valuable today, only more expensive, and the model has become grossly inefficient and counter-productive.

Only lenders and the administrators of bloated school budgets have benefited from this massive mal-investment of resources.  As debt levels must contract, this system and pricing is no longer sustainable.

Solutions lie in affordable, efficient delivery channels. Sal Khan is a leader in the education evolution that is necessary.

Salman Khan, Khan Academy Founder & CEO, discusses why he keeps Khan Academy free for students, what he thinks about public schools across the United States and how he’s working to forward education efforts across the globe. Here is a direct video link.

According to the CIA Factbook the global broad money supply totaled $81.3 trillion in 2014 and more than a triple from $25 trillion in 2000. For a visualization on the relative size of all global markets and monetary instruments see:  All the world’s money and markets in one visualization.

As monetary fire hoses have flooded the financial system the rate of global economic growth has plunged from 4.33% in 2000 to 2.47% in 2015.

Unrepentant, last week central bank heads said they will need to dramatically increase liquidity operations during the next recession.  In this approach, there is little doubt that global growth will soon look like global interest rates–flat to negative.

When will we be ready to adopt an intelligent approach that focuses on rebuilding savings rather than increasing debt?  On investing in efficiency and productivity rather than speculating in damaging asset bubbles?  Apparently not yet.

Not different this time–same players and behaviors, different cycle.

In 2003-07 it was reckless lending, securitization and derivatives that drove realty prices off the leverage cliff. In 2010-2016 the buyers are foreigners and financial intermediaries (who were bailed out by governments and central bank liquidity injections after the 2008 implosion) who have been buying up houses with record levels of borrowed ‘funny money’ and driving up prices to unsustainable (un-affordable) levels all around the world.  Won’t end well again.

Here is a direct video link.