Thursday, October 14, 2010

Quantitative Easing Sucks

The term Quantitative Easing is familiar to everyone. It is now referred to as QE followed by a number. What is it? It is printing money! It’s a little like the euphemism, “Used Dog Food.” It doesn’t sound bad until you give it some thought.

Did gold jump 100 dollars, or did the Bernanke dollar lose value? We have a President that thinks that the banks, Wall Street, and the rich people of this world are responsible for the current mess we are in. And by God we will make them pay Rah! Rah! A President chooses to tax the rich as a way out of this mess? I don’t follow it.
Congress has always taxed the rich; no need to wave a flag while doing it.

No cost of living increase this year, just like last year, for Social Security recipients. That could make for an interesting election next month. The checks don’t go as far as they use to, especially when the government removed food and energy from the cost of living index. The only things still left in the index are Denture-Grip, Preparation-H and Desenex Foot Powder and that pretty much covers everyone from head to toe (from a government perspective).

This quantitative easing by the government is keeping interest rates artificially low. Even the retirement funds which depend on interest rates for their income are being hurt by these unrealistic low returns on bonds. (Double click on image below for a larger view)
Notice that the CALIPERS figures above are a few years stale and the present discount rate is nowhere near 4 percent. These figures suggest that they are still trying to lock the barn doors after the barn has burned to the ground.

Gold and silver use to be a very poor investment (they still are). They pay no interest but they tend to keep up with inflation. Cash is getting no interest in the banks (if you count in inflation). Of course that light bulb goes off in your head saying "borrow cash and by gold." Do you run with the herd? Caution could be the word that wins the day. A buying frenzy here, could result in government intervention.

Gold and silver are increasing in price. Is this the last bubble in town? Or maybe it’s just a reflection of the true value of the dollar. Quantitative Easing is the name of the game and everyone with paper dollars gets to play (shh ---it’s only a tax on our savings).

Copyright 2010 All rights reserved

35 comments:

Tyrone said...

Is this the last bubble in town? (RE: gold/silver)

I agree with Soros... Gold is the ultimate bubble. But most people misinterpret this statement. At the bottom of Exter's Pyramid, there is nothing else.

Ultimate:
Being last in a series, process, or progression
-or-
Of the greatest possible size or significance; maximum
Representing or exhibiting the greatest possible development or sophistication
Utmost; extreme

BTW, if you haven't seen or heard of the Debt-Free America Act, check it out; HR4646. A one percent transaction tax is proposed.

AIM said...

Jim,
I sense your frustration.

It can only end with trouble. The blind and corrupt leading the country into deeper and deeper woes.

Bernanke's intention is to force everyone to spend their money and savings before it loses more purchasing power (and thus "stimulate" the economy). He'll stop deflation no matter what = cut off his nose to spite his face (sacrifice the USD to avoid asset depreciation). Total idiocy. Yet what do you expect from an academic, socialist, keynesian out of Princeton?

He'll hurt the banks too. Despite the fact that their loan collateral has lost value they will now have their loans paid back by cheaper dollars (if anyone actually decides to pay back their loans).

Default on your loans and don't ever use credit again would be one way of putting an end to the banking-corporate-Wall St. stranglehold that exists on America.

Anonymous said...

Jim in San Marcos:

There is no escaping QE.

Buying gold and silver is a waste of time. It doesn't give you an income stream, nor can you eat it.

You can't pay your income and property taxes with gold or silver. And it will be very difficult to use gold or silver to buy groceries, have your car repaired, buy gas, etc. Gold and silver are not a viable solution.

Plus, the government can confiscate it or devalue it whenever they choose to. They have the power to force you to use whatever currency they want you to use. All the goldbugs and gold hoarders will wind up very surprised to find out that they have not escaped the devastation either. Gold has been outmoded by the powers that be. It is no longer an inflation hedge and is a risky store of wealth (when the herd dives into gold and the bubble pops, everyone will be whacked when the price plummets.-- a further loss of wealth). Gold will be manipulated by the big guys.

You will only be secure and able to sidestep the devastation if you've got food or water or energy to sell to others or trade with.

Jim in San Marcos said...

Hi Anon 1:05

In my opinion Gold and Silver have past the ravages of time test. Just like sex has.

The medium of exchange was once silver, gold and sex.

Then it became silver, gold, paper money and sex.

Now it is silver, gold, paper money, credit cards and sex.


With quantitative easing, paper money and credit cards drop out of the equation.

The biggest drawback to the precious metals was their lack of earning power. But their biggest plus was a guard against inflation. Governments can't print gold. Your cash in the bank is earning negative interest.

If the government wanted to confiscate gold, are you going to raise your hand and say "take mine?"


FYI the US government still accepts silver and gold currency issued by them as legal tender. Of course, a 20 dollar gold piece will get you $1374 dollars from a coin dealer. Why pay your taxes with 20 dollar gold pieces? It makes little cents.

Anonymous said...

QE2 won't work but it will sure hurt the currency's value. All currencies are fiat today so there is nowhere to run. You might be better off with Brazilian reals and Aussie dollars for a while but they will devalue too eventually because if the USD goes down so will everyone else's currencies globally. The period in time when all currency stopped being backed by something and only stood on a government's promise to pay was the period that we all allowed ourselves to be set up to be wiped out. The damaging act was done a long time ago. We didn't learn from history. We are now paying dearly for the ignorance of our leaders as well as our ignorance and apathy in not preventing it. Woodrow Wilson and Congress allowing the Fed Reserve and income tax; and Nixon and Congress allowing our coming off the gold standard are the two pivotal changes that set us up to go down the toilet. How does it feel to be circling the bowl?

rob in ns said...

Jim

Have you noticed that as we approach the final end game people are generally speaking even less interested in finding out what is going on with economy. I wonder sometimes if things will keep lingering on like it is as long as the majority are either ignorant or uninterested about economy. The thing I have hard time wrapping my head around is that all the major economies are doing the same thing. Something's gotta give eh!

Jim in San Marcos said...

Hi Rob

I am beginning to believe that everyone under the age of 45 has no concept of what is going on. I think for most young people, everything, revolves around marriage, kids, football and sex. Why worry about government?

From here, we have a good view, and as you suggested, something has to give. What it will be, we can wait and see.

Joseph Oppenheim said...

BTW, if you haven't seen or heard of the Debt-Free America Act, check it out; HR4646. A one percent transaction tax is proposed.<<<<<<

Besides the unlikely chance it will ever be approved, is that there are actually some good things about it like 1) there is a tax credit for each charge, nonrefundable, but would offset any income taxes a person had, plus it repeals the income tax completely in 2017. Plus, since its goal is to eliminate the national debt, it would strengthen the dollar, essentially making one's assets worth more.


If the worry comes from a Teabagger, don't worry about it. I'd say the people who maybe should be worried most about it are people who pay no taxes at all or low ones, because of loopholes, or using offshore tax havens. So, I suspect, overall, maybe in need of a little tinkering, but not a bad deal for most people. Our tax code is a mess and needs changes. Also, one loophole which hedge funds have used is to classify income as cap gains rather than income. Those guys would deservedly be hurt by this, so that is good.

Joseph Oppenheim said...

Quantitative Easing Sucks<<<

A comment showing an obvious lack of understanding.

QE1 worked excellently, helping to keep the banking system from collapsing.

QE2 is a different story. It likely wouldn't have been proposed, if so many ignorant Congresspeople hadn't said "No" to more extensive stimulus package(s). The result of limited stimulus has caused the states to layoff teachers and other workers which is at a time when the economy needs them to spend the income they would have made - a job killer at just the wrong time - especially for jobs which are investments and return more than they cost.

So, the FED, BTW Bernanke is a Republican, but understands what is happening - the risk of deflation is worse than more inflation, and it is only the FED which can spur spending more if needed. So, anyone who doesn't want QE2, has a Republican to blame - It certainly isn't Obama. The Fed is trying to do an end around of the stubborn and ignorant ones in Congress whose only goal is to fool voters into how they vote, which appears to be working, unfortunately.

Yes, there is a currency risk, but there would be less if we had a fiscal stimulus, rather than QE2 which is a monetary stimulus. Again, the FED has no choice at this time. BTW, anticipated QE2 has spurred the stock market, which does have some positive benefits especially since the stock market is certainly not in bubble territory. Believe it or not, capital formation is a good thing.

Tyrone said...

Plus, since its goal is to eliminate the national debt, it would strengthen the dollar, essentially making one's assets worth more.

LOL
Eliminate the national debt!
LOL

Jim in San Marcos said...

Hi Joeseph

The question that we are discussing indirectly is where is the money coming from to accomplish all of this.

Its a little like a game of Hearts where you "shoot the moon." Either you get to take 27 points off of your score or the others get 27 points added on to their score. The net effect is the same. In the 1930 depression there was a 90% loss of wealth. everyone was pretty much broke. In this case you had broke people willing to work for pennies.

Travel on to today. With government printing, our savings will still be there, but the purchasing power will be 90% less. You won't have to work for less money, your regular paycheck just won't buy as much.

What sucks is that the government printing of money is a tax on people who have saved all of their lives. It doesn't hurt the borrower in the least.

Everyone that bought a home they couldn't afford gets to live in it rent free for two years. Lose your job, you get a government paycheck for two years.

Inflation or deflation are moot points. If your savings are trashed, what difference does it make if a dozen eggs cost a dime or one hundred dollars? Wages will adjust accordingly.

I might add, it is very irritating to have someone suggest that my comments show an "obvious lack of understanding." It's kind of like asking your boss for a raise and pointing out to him that his wife is a real dog. You need to think twice about what you are going to say.

Anonymous said...

Bernanke can't quantitatively ease as much as he wants and it won't do a damned thing. This is a delationary spiral. The pendulum has swung and public sentiment is now all about uncertainty fear, caution, saving, not spending, making do, etc. And no government or central bank can do anything about it.

Look at Japan: they've been stimulating, spending, QEing, etc. for the last 20 years and they haven't been able to change the public sentiment. They're in deflation. We're going through the same thing they did and are (except their economic fundamentals were stronger).

Home prices are going down, unemployment is going up, wages are going down, asset values are going down, and so on.

Keep it simple: the smart thing to do is be liquid. You should be liquid when you are at the top and remain liquid all the way down to the bottom at which time you then go into hard assets as inflation begins.

Forget about gold. When the time comes for you to use it there will be a buyers market and you won't be able to get much cash for it anyway, even if you could find a buyer. Deflations make cash scarce too. Plus the government will confiscate it at the appropriate time just as FDR did in 1933.

Stick with the USD. It will go back up shortly when everyone globally realizes that they are in a depression and things aren't getting any better. Everyone will run to the USD reserve currency. The USD is just getting a momentary trashing. It will start strengthening again soon. As soon as the population realizes that its leaders are corrupt and incompetent. The masses haven't reached that conclusion yet. The denial is beginning to erode away now.

Inflation won't begin for quite some time. The bond vigilantes won't allow Bernanke to print too much (not that it would matter).

Some prices may go up but that is not inflation. Inflation is an increase in money supply and credit in relation to available goods and services. The price of something is relevant only to how much money one has in their pocket.

90% of the money supply is credit, only a small amount is cash. No one can and no one will borrow in these times, and the banks make it harder to borrow these days too because they are hoarding cash due to fear of what is coming. If no one borrows then credit doesn't get out to the real economy, there is no velocity of money, thus there is no inflation.

Deflation is a scarcity of cash and credit in relation to available goods and services. This is what is happening now. Prices will continue to go lower in many areas but even so those prices will be more unaffordable for people then the higher prices are now. Cash will be scarce, credit will be scarce.

Stay liquid, ride it to the bottom for the next 2,3,5,10 years or whatever it takes. Then buy hard assets and ride the inflationary wave. It is your only chance. Keep it simple.

Get it?

Anonymous said...

Error in last post:

Re: Bernanke can't quantitatively ease as much as he wants and it won't do a damned thing.

It should read: Berananke CAN...

Anon On A Calif Mtn said...

I agree. This will read as a deflationary depression in the economic history books.

The two key markets labor and housing are going down. This has terrible downward pressure on consumerism which constitutes 70% of the GDP. We are in a bad tangle.

The government and media coverups will keep Americans from seeing the true reality for some time. Due to this, the majority of America won't know they are in depression for another year or maybe two.

No one will have to worry about inflation for a long time. It is correct that if THE FED got inflation going the bond market would step in and force interest rates up. Then there would be more defaults and job losses which would turbo charge the deflation phase even further.

Government has lost control. The credit bubble has popped. The need for trillions of excess credit that is attached to underlying wealth and public sentiment are now in control and calling the shots.

Anonymous said...

Calif Mountain:
Last paragraph makes no sense to me. What are you saying?

Anon On A Calif Mtn said...

I apologize for not finishing the sentence correctly. To clarify: the trillions in excess credit that is attached to underlying wealth/assets will need to be washed away (asset value has been terribly inflated) before the economy has a chance to be restructured, mended and begin a new growth cycle through job creation, etc. (which could take decades).. The excess has to be eliminated. That is what deflation does. The public sentiment (fear, must save, tighten belt, don't borrow, etc.) is what will control the economy NOT the government.

The stimulus money and the suspension of standard accounting are the two points that have kept things "afloat". Eventually the banks, the pension plans, the market funds, the insurance annuities, and even The Federal Reserve are going to have to mark their assets down to market. When this occurs you will see another tremendous systemic collapse and many banks and entities go under. This will be global since mortgage backed securities from Wall St. are now almost in every global portfolio that exists. There will be a horrible unraveling and loss of wealth. Although the wealth was false from the very beginning... it was all credit created by The Fed and banks. Smoke and mirrors.

Deflation is very destructive. Most would want high inflation instead. But deflation is unavoidable at this time. Historically it is what always happens after a credit crisis.

Inflationists are dead wrong now. They will be right... eventually. I also suggest staying liquid and remaining so until inflation truly rears its ugly head.

Tyrone said...

Anon On A Calif Mtn,
You're assuming the government will allow someone to accept that bad debt. This is the land of 'all winners'. And then I return to FOA...

FOA, 2001:
"My friend, debt is the very essence of fiat. As debt defaults, fiat is destroyed. This is where all these deflationists get their direction. Not seeing that hyperinflation is the process of saving debt at all costs, even buying it outright for cash. Deflation is impossible in today's dollar terms because policy will allow the printing of cash, if necessary, to cover every last bit of debt and dumping it on your front lawn! Worthless dollars, of course, but no deflation in dollar terms!"

Time will tell, but I don't think it will take decades to reveal the answer.

AIM said...

I disagree with FOA, because they aren't printing dollars. Currency is less than 7% of the money supply. It is all credit. QE is credit NOT printing money. The bond holders and the US banks will not let the government inflate. Look at Japan: all of their attempt at stimulus and inflation failed. Deflation has won out.

Tyrone said...

AIM,
"printing of cash" in this context is the keyboard, not literally producing the paper. QE is digital printing. QE to infinity, as Jim Sinclair likes to say. Everyone gets paid.

AIM said...

Tyrone:
Yes, and that keystroke will happen and the "money" will just sit in the computer's hard drive and in the bank's computer hard drives and never get out into the real economy. Why? Because consumers are too far in debt and afraid to borrow any more (they are losing their jobs, having salaries cut back, and they are losing equity in their homes... or they are seeing it happen to others), and businesses don't see any opportunities for profits or growth to borrow... and banks are hoarding all they money and investing it in treasuries because they know their day of reckoning is coming and only lots of money will give them a chance to survive when the value of their assets are finally revealed (they are all most zombies and insolvent... using false accounting and "mark to myth" to hide their actual status).

QE2 = FEDFAILURE2

Tyrone said...

they are all most zombies and insolvent... using false accounting and "mark to myth" to hide their actual status

LOL
"Mark to Myth"
LOL

Joseph Oppenheim said...

This will read as a deflationary depression in the economic history books.<<<<<

Only fools act as fortune tellers. Things are too complex for such simplistic thinking.

It is a matter of risks and probabilities. Yes, there is a risk of deflation and a risk of inflation and of both and to varying degrees of multiple realities.

Fortune telling leads to delusional thinking which most often includes ignoring facts, that is, ignoring what is actually real.

Sure, it is wise to prepare for bad outcomes, now being no different from any other time. But, worse is to ignore reality.

And, reality is that we were in a steep recession, which ended with the economy growing, albeit slowing, but consistently growing for several quarters.

Could there be a double dip, a quick return to recession or worse? Sure, but through all these past 5 years or so, people like me have seen their net worth consistently grow, because of the wonderful opportunities. Call it a housing bubble, and it was, but bubbles are where one can make real profits as long as one doesn't get greedy, and just follows reality. I exited RE, home and rental, at the peak, as did many, many others. Why do you think there was a peak? Because that is when profits began to be taken by a lot of people, not just a few.

Historically, I've never been hurt in other bubbles - the Internet one, etc, etc. Plus, breaking of the bubbles just create other opportunities, like quality stocks over the last few years which traded at historically low valuations. And, TIPS have worked out wonderfully so far, and still guarantee a profit, hence protection from deflation while also offering some protection from inflation.

I'm not bragging, because there are many who do as I do. Will I ever be wiped out? Maybe. As I say, fortune telling is for fools.

Anonymous said...

Joseph

You start out making an inflammatory statement then proceed to explain how you are making money predicting the future. Do you see the problem with your logic? Anyhow I'm following my father's investment stategy. He has paid off a house, 50 acres of land and a cottage on the ocean. He did this while working at a paper mill. All his money is now in short term GIC's and most importantly he has no debt. If we all followed that strategy we wouldn't now be suffering thru this debt hangover which is dragging down the economy (à la QE2).

rob

Tyrone said...

As Sinclair says, QE to Infinity...

Fannie, Freddie May Draw $363 Billion, FHFA Says
By Lorraine Woellert – Oct 21, 2010 5:13 PM PT
Fannie Mae and Freddie Mac, the mortgage-finance companies operating under U.S. conservatorship, could draw a total of $363 billion in Treasury Department aid through 2013 if the housing market worsens, the Federal Housing Finance Agency said.


Save that bad debt at any/all cost.

Joseph Oppenheim said...

You start out making an inflammatory statement then proceed to explain how you are making money predicting the future. Do you see the problem with your logic? Anyhow I'm following my father's investment stategy. He has paid off a house, 50 acres of land and a cottage on the ocean. He did this while working at a paper mill. All his money is now in short term GIC's and most importantly he has no debt. If we all followed that strategy we wouldn't now be suffering thru this debt hangover which is dragging down the economy (à la QE2).

rob

<<<<

There is a flaw in YOUR logic. I made NO predictions. To underscore, I HAVE NONE.

I also think it is foolish to follow others. Learn from others, sure, but it is so important to be independent and open minded.

My dad was also quite wise, in fact my idol, but I find it interesting that even though he was very successful financially, he would ask me for stock advice, many, many years ago before he died.

As for your dad's advice, I also agree that debt is bad for an individual, except for maybe education or medical care. I have none and never want any. And, never really ever had any, except for on a couple of homes, I just assumed existing low motgages, and paid them off shortly, and once a car loan just because of convenience, but paid it off in a few months. And, credit cards, I only use them for the convenience and the cash rewards, never ever owing any interest.

I don't agree with the short term GIC's. They are OK, but the strategy I have always used to stay liquid with cash, so to speak, is to buy longer term CDs with low early withdrawal penalties, laddered so every so often one comes due, so it is easy to exit them if necessary, but rarely ever has that been necessary, meanwhile earning a higher US insured income than short-term stuff. Currently, my CD's average about 4%. So, that is investing, along with the benefit of liquidity. I call that, my kicker theory to investing, having an asset serve an extra purpose beyond what is obvious. Plus, stocks serve the extra advantage of being liquid.

I repeat, creativity, is the key -listening to others is OK, but following them I just don't recommend, including me. Even if I told someone a stock to buy, it wouldn't matter, because they need to figure out what to do with it after they buy it.

As for the debt overhanging the economy being bad, that is currently a falsehood. Tons of private debt has been destroyed. So, overall, it is OK for the government to issue debt now, in fact necessary. Yes, it can't go on forever, and with that is also need for a plan to begin paying down the debt as the private economy takes on more debt. Also, as I have mentioned, capital formation, which is going on now with corporations is making the total balance sheet of the US, private and government together, much more solid. There is NO debt problem at this time in the US economy. How do I know? I look at facts, reality. The FED can't determine long term rates, and they are low. I'm not saying they'll stay low, but right now government debt is not the problem. Like I said, debt for investments, like education, etc, etc return more than they cost, and are a way out of a depressed economy, not just because of the money which gets back into the economy right away.

rob said...

Any investment strategy at its very core rests on predicting hopefully how the market will perform. As for my father and mother(I shouldn't leave her out)the reason they are in GICs is because they don't need to chase the next big thing investment wise. The reason being they have no debt and a steady supply of money coming in every month. But that is really not what this article that Jim wrote is about. I hate to get off topic and regret commenting on your thread. I guess the reason I originally wanted to post is because the reason we are in this mess now is because we forgot that it takes hard work to be successful in life. Get rich quick schemes like the one where houses via HELOCS were turned into ATM machines are a fools game. The reason for all this quantitative easing now is the bill for all this excess debt is due and the banks and people who got the money don't want to pay. Like I said the strategy my parents used works for me. It is also what made our countries the richest in the world. Their savings provided the investment capital that spurred all the advances last century.

AIM said...

Oppenheimer:

Who is acting as a fortune teller? I'm just looking at current events and facts. We are in deflation. These years will appear in the econom history books as a defla depression. Just like the 30's depression did.

Anonymous said...

Jim in San Marcos --

QE2 will not cause inflation, high inflation or hyper-inflation. The Fed is impotent. Some of the other posters here have made it very clear as to why. Some smart people on this blog. Those organizing and planning for inflation are premature.

Anonymous said...

http://globaleconomicanalysis.blogspot.com/2010/10/home-prices-double-dip-in-sudden.html

Home prices dropping by 20% over the next few years.

Doesn't sound like inflation to me.

Case/Schiller data is nothing to sneer at. It has a history of accuracy.

Tyrone said...

Like I said, debt for investments, like education, etc, etc return more than they cost, and are a way out of a depressed economy,...

College, itself, has become a bubble. You can find numerous articles about people racking up $10's of thousands in debt for useless degrees.

Why Did 17 Million Students Go to College?

My future is gone
Carmen Gardiner, 25, a 2007 graduate of Louisiana State University, is weighed down by her private student loans. Her debt is now about $80,000, and her monthly payments are more than $600. Gardiner's undergraduate degree is in psychology. She lives with her husband, who is still in college, and earns $13 an hour at a call center in Atlanta. They have a 6-month-old daughter.

Students Are Buried in Debt
Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she's been enrolled in night school, which allows her to defer loan payments.
...
How many people are like her? According to the College Board's Trends in Student Aid study, 10 percent of people who graduated in 2007-8 with student loans had borrowed $40,000 or more. The median debt for bachelor's degree recipients who borrowed while attending private, nonprofit colleges was $22,380.
...
Cortney could move someplace cheaper than her current home city of San Francisco, but she worries about her job prospects, even with her N.Y.U. diploma.

She recently received a raise and now makes $22 an hour working for a photographer. It's the highest salary she's earned since graduating with an interdisciplinary degree in religious and women's studies. After taxes, she takes home about $2,300 a month. Rent runs $750, and the full monthly payments on her student loans would be about $700 if they weren't being deferred, which would not leave a lot left over.


Save that bad debt at any/all cost.

Joseph Oppenheim said...

Like I said, debt for investments, like education, etc, etc return more than they cost, and are a way out of a depressed economy,...

College, itself, has become a bubble. You can find numerous articles about people racking up $10's of thousands in debt for useless degrees.<<<<

Singapore spends about 15% of its GDP on education, while the US spends about 2%.

The US will never get back to becoming a leading nation by caring so little about the education of its people.

On the other side of the argument, students getting so much into debt for college is rarely wise. 2 years at a community college then transferring to a university for the next 2 years, is a prudent way to go. And, of course, joining the military allows a free education because of military benefits. I know someone who got his BS and now is working on his Masters while in the Marines, all for free, except for books.

Another thought, college (undergraduate) really isn't about making money, it's about becoming educated, a cultural goal. Making money is a logical end game, but undergraduate education really shouldn't be thought of that way - unfortunately most American are so materialistic it is disgusting.

A sage once said a couple of thousand years ago, as to what makes for a rich person, his answer was someone who is happy with what he has. Again, unfortunately, even our government wants to put a monetary number on it - $200/250K, basically forcing people to think in those terms. So sad.

But, I do support the government making up to 4 years of college, free. The GI bill after WWII was brilliant.

Education is so very important, and educated people do earn more in their lives, hence pay more taxes back to the government. It's win-win, but so many don't understand that.

Tyrone said...

Another thought, college (undergraduate) really isn't about making money, it's about becoming educated, a cultural goal. Making money is a logical end game, but undergraduate education really shouldn't be thought of that way - unfortunately most American are so materialistic it is disgusting.

Sadly, unless education is made available for free, return on investment is a must. Obtaining an education for the intrinsic value of education, itself, is reserved for the wealthy. The rest of us must work and ensure there is a return on that investment (education).

This is not about materialism. In the USA, education costs money, and we are bust.

Joseph Oppenheim said...

Obtaining an education for the intrinsic value of education, itself, is reserved for the wealthy.<<<

Again, I couldn't disagree more, undergraduate college, that is. Any degree, again facts prove that. The key is to find what you really like/love. Find that and a person will most likely be good at wherever that leads.

K-12 should do better with math and science and there should be extra incentives for college math, engineering and science majors. But, there just is no substitute for finding what you love to do. BTW, math is an art - that is why they grant BA's in pure math.

Rob in NS said...

True story

The waiter at Chinese restaurant my boss and I went for lunch last week had a PHD in Psychology. Not sure if it was necessary for him to be that well educated to serve me a Special "C" with egg roll and glass of water.

Rob

frakrak said...

Rob it sounds as though your local Chinese restaurant owner is a person of vision, some of those fortune cookies require a degree of psychological interpretation! Did your waiter ask you if you enjoyed your egg roll? And then follow up with "did your mother also enjoy egg rolls?" .....
cheers