The Yale College term bill will increase by 3.8 percent, from $69,430 to $72,100, for the 2019â€“20 academic year, the University announced last Monday.
Tuition will rise from $53,430 to $55,500, and the cost of on-campus room and board will jump from $16,000 to $16,600. Over the past two decades, the term bill has increased at a rate similar to this yearâ€™s. According to the press release announcing the change, the level of the student effort â€” the amount of money students on financial aid are expected to contribute to their education â€” will remain constant for the fourth straight year.
â€œAlthough the cost of a Yale education changes each year, students receiving financial aid can rest assured that their Yale financial aid award will continue to meet their full demonstrated financial need,â€ said Director of Undergraduate Financial Aid Scott Wallace-Juedes.
For the 2000â€“01 academic year, at $32,880, Yaleâ€™s term bill was 55 percent lower in absolute terms than that of the coming school year, though inflation has accounted for the bulk of the difference. Tuition as well as room and board have been consistently increasing by roughly 4 percent annually since then, even through the 2008 financial crisis, which slashed the Universityâ€™s endowment by 25 percent. Yale has said that it increases tuition and room and board to keep pace with inflation and University expenses.
Obscene, outrageous, absolutely appalling. But the top elite schools have a natural monopoly as gatekeepers to the International Ruling Class and every year more people are lining up trying to get in.
Yale cost $3000 a year when I was a freshman back in 1966.
Americans are not getting the economic benefit of the tremendous currency expansion in the form of more available credit, but never fear! We are going to get something very real as the result of the Obama Administration’s currency management efforts: Inflation.
While the career politicians prance about in their clownshoes and red rubber noses quacking about “the fiscal cliff” and are obediently parroted by the MSM and FTV charlatans, this is something they do NOT want to talk about or want anyone to even ‘think’ about.
This is actually very simple. Look at the two lines on this chart.
– The blue line reflects the falling purchasing power of the Dollar. From the creation of the FED when one Dollar was worth one Dollar to today, when one Dollar is really only ‘worth’ 3.8 cents.*
– The red line represents rising prices over time. This is the inflation the professional liars say does not exist.
– The turning point is pretty clearly indicated in the 1970’s. This is one trend that is NOT your friend!
It has been said before, but is worth repeating:
– It isn’t that the value (price) of Gold has gone UP. It has not. It is the value (purchasing power) of paper fiat that has gone DOWN.
*The Treasury will begin removing pennies and nickels from circulation in 2013. Pennies stopped being made of copper about 1984 and have been made of zinc with a copper ‘wash’ and are truly worthless in both nominal and real terms by now. Nickels still amazingly contain nickel, and are worth about seven nominal cents due to their metal content. Even the venerable Dollar bill, the greenback, is being ‘looked’ at for extinction by the 40# brains in government who dimly ‘sense’ something is wrong (well, a nominal Dollar is worth 3.8 cents in real terms anyway). Does this suggest to anyone…Bueller? Bueller? …that a currency reset/revaluation looms?
Money velocity has recently declined far below any point during the Great Depression of the 1930s.
Tyler Durden argues that the real state of the US economy, measured by velocity of money, is today far worse than it was during the Great Depression, and federal monetary easing is a disastrous policy certain to produce the same result very shortly in the United States that it did in Weimar Germany.
Velocity of money is the frequency with which a unit of money is spent on new goods and services. It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of menâ€™s underwear (which Greenspan was fond of ogling). In a healthy economy, the same dollar is collected as payment and subsequently spent many times over. In a depression, the velocity of money goes catatonic. Velocity of money is calculated by simply dividing GDP by a given money supply. This VoM chart [above] using monetary base should end any discussion of what â€thisâ€ is and whether or not anybody should be using the word â€œrecoveryâ€ with a straight face.
In just four short years, our â€œenlightenedâ€ policy-makers have slowed money velocity to depths never seen in the Great Depression. Hard to believe, but the guy who made a career out of Monday-morning quarterbacking the Great Depression has already proven himself a bigger idiot than all of his predecessors (and in less than half the time!!). During the Great Depression, monetary base was expanded in response to slowing economic activity, in other words it was reactive (hereâ€™s a graph) . They waited until the forest was ablaze before breaking out the hoses, and for that theyâ€™ve been rightly criticized. Our â€œproactiveâ€ Fed elected to hose down a forest that wasnâ€™t actually on fire, with gasoline, and the results speak for themselves. With the IMF recently lowering its 2012 US GDP growth forecast to 2%, while the monetary base is expanding at about a 5% clip, know that velocity of money is grinding lower every time you breathe.
The Fedâ€™s refusal to recognize the importance of velocity of money quickly goes from idiotic to insidious. Hereâ€™s a question: If I give you 50Â¢ and as a result of that transaction, you owe me $1.00, what interest rate have I charged you? Obviously, Iâ€™ve charged you 100% interest. ….
In 2011, every dollar of GDP growth created $2.08 in debt. In real life, thatâ€™s 108% interest plus the nominal rate, and our twisted leaders want you say, â€œThank you sir, may I have another!â€
2011 wasnâ€™t an anomaly either; itâ€™s the new normal.
Inflation is almost as old as the modern Olympic Games (revived in 1896). Boing Boing informs us that the Olympic Gold Medals we are watching being awarded are only gold-plated, and that Olympic Gold Medals have not really been made of gold since a century ago.
The amount of gold in an Olympic gold medal has fallen to 1.34 percent, thanks to gold prices that recently peaked at $1,895 an ounce. At current prices, a pure 400g medal would cost about $25,000 to make, with a total bill of about $50m for the games.
“The last time the Olympic Games handed out solid gold medals was a hundred years ago at the 1912 Summer Games in Stockholm, Sweden,” writes gold brokers Dillon Gage. “Gold medals were in fact only gold for eight years. …
The 2012 gold is 92.5 percent silver, 1.34 percent gold, and 6.16 copper, with IOC rules specifying that it must contain 550 grams of high-quality silver and 6 grams of gold. The resulting medallion is worth about $500. For the silver medal, the gold is replaced with more copper, for a $260 bill of materials.
The bronze medal is 97 percent copper, 2.5 percent zinc and 0.5 percent tin. Valued at about $3, you might be able to trade one for a bag of chips in Olympic park if you skip the fish.
Andy Laperriere explains that the federal government’s cheap money/low interest policies have very real costs, including the long term reduction of economic growth.
During the past three years, the Federal Reserve has tripled the size of its balance sheetâ€”in effect printing $2 trillionâ€”something it had never done in its nearly 100-year history. The Fed has lowered short-term interest rates to zero and signaled that it will keep them at that level for years. Inflation-adjusted short-term rates, or real rates, have been in the minus 2% range during the past couple of years for the first time since the 1970s.
The unfortunate fact is, as Milton Friedman famously observed, there is no free lunch. After the Fed’s loose monetary policy helped spur the boom-bust in housing, it’s remarkable how little attention has been devoted to exploring the costs of Fed policy.
A few critics of quantitative easing (QE) and the zero interest rate (ZIRP) have correctly pointed out that these policies weaken the dollar and thereby reduce the purchasing power of American paychecks. They increase the risk of future inflation, obscure the true cost of the unsustainable fiscal policy the federal government is running, and transfer wealth from savers to debtors.
But QE and ZIRP also reduce long-term economic growth by punishing savers, reducing saving and investment over the long run. They encourage the misallocation of resources that at a minimum is preventing the natural rebalancing of our economy and could sow the seeds of another painful boom-bust.
One intended effect of a loose monetary policy is a weaker dollar, which can help gross domestic product by boosting exports. But a weaker dollar also raises import prices (such as oil prices) for American consumers. For the average American family, this adverse impact has likely outweighed any positive impact from QE and ZIRP.
Rembrandt, Belshazzar’s Feast, 1635, National Gallery, London
Mark Steyn, in his customarily brilliant manner, reflects on the scope and significance of the federal debt.
The fecklessness of Washington is an existential threat not only to the solvency of the republic but to the entire global order. If Ireland goes under, itâ€™s lights out on Galway Bay. When America goes under, it drags the rest of the developed world down with it. When I go around the country saying stuff like this, a lot of folks agree. Somewhere or other, theyâ€™ve a vague memory of having seen a newspaper story accompanied by a Congressional Budget Office graph with the line disappearing off the top of the page and running up the wall and into the rafters circa mid-century. So they usually say, â€œWell, fortunately I wonâ€™t live to see it.â€ And I always reply that, unless youâ€™re a centenarian with priority boarding for the ObamaCare death panel, you will live to see it. Forget about mid-century. Weâ€™ve got until mid-decade to turn this thing around.
Otherwise, by 2020 just the interest payments on the debt will be larger than the U.S. military budget. Thatâ€™s not paying down the debt, but merely staying current on the servicing â€” like when you get your MasterCard statement and you canâ€™t afford to pay off any of what you borrowed but you can just about cover the monthly interest charge. Except in this case the interest charge for U.S. taxpayers will be greater than the military budgets of China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey, and Israel combined.
When interest payments consume about 20 percent of federal revenues, that means a fifth of your taxes are entirely wasted. Pious celebrities often simper that theyâ€™d be willing to pay more in taxes for better government services. But a fifth of what you pay wonâ€™t be going to government services at all, unless by â€œgovernment servicesâ€ you mean the Peopleâ€™s Liberation Army of China, which will be entirely funded by U.S. taxpayers by about 2015. When the Visigoths laid siege to Rome in 408, the imperial Senate hastily bought off the barbarian king Alaric with 5,000 pounds of gold and 30,000 pounds of silver. But they didnâ€™t budget for Roman taxpayers picking up the tab for the entire Visigoth military as a permanent feature of life.
I think myself that Mark is overlooking the obvious detail: that when, as he puts it, “you get your MasterCard statement and you canâ€™t afford to pay off any of what you borrowed but you can just about cover the monthly interest charge,” before much longer you wind up stiffing all your credit cards and burning your credit rating for the next decade. The government equivalent of stiffing credit cards consists of inflating your currency, so you can pay your debts after all using funny money worth a small fraction of what it was at the time those debts were incurred.
The US Government has not overlooked this solution. Remember Quantitative Easing? It is already underway and in process. I’m not sure who it was that remarked “Inflation is the cruelest tax,” but he was clearly right. Inflation rewards the improvident and punishes the responsible. Inflation strips the middle class of its accumulated savings in order to relieve the government of its debt.
Joe Queenan does a fine job of mocking the federal government’s “core inflation rate” calculation methodology.
[I]magine my surprise when the latest economic data came out and we were told that inflation wasn’t much of a problem at all. The price index for core personal consumption expenditures increased a piddling 0.9% from the previous year, keeping the national inflation rate far, far below what economists see as the danger level.
Hang on a second, I thought: What about my exorbitant fuel costs and the two bucks for my disgusting coffee and the $1.25 for my stale, tasteless bagel, with no schmear, no butter, no nothing? If inflation had jumped just a puny 0.9% in the past 12 months, why did it feel like everything that I bought last week had gone up 25%?
The answer lies in the way economists calculate what they call “core” price indexes. The core personal consumption expenditures index (PCE), for example, computes the cost of a representative basket of goods that consumers might buyâ€”like used copies of “Madden 2009” and lace camisoles and jumbo-size containers of Percocet and personally autographed Kenny Chesney guitar picks and Blu-ray discs of “AVP: Alien vs. Predator” â€”but it cuts out variables like food and energy prices. This makes the month-to-month reporting on inflation less volatile, far less subject to the vicissitudes of the market.
At first glance, this seems baffling. Removing fuel and food costs from the index purely for the sake of statistical balance seems a bit like saying, “All told, four million people died in World War II. Well, unless you include the people who died in concentration camps. And, oh yeah, the 20 million Russians.” It’s a bit like saying, “On average, a major league baseball team will win 3.2 World Series each century. Obviously, not the Cubs. And we’ve thrown out the New York Yankees and their 27 world championships because it doesn’t provide a true snapshot of the game at any given moment.” It’s a bit like saying, “Billy Joel never wrote a single song that just totally sucks and makes people’s skin crawl. Unless you include ‘Captain Jack.’ Which we deliberately left out of our sample because it skews the results. Maybe we should have left out ‘Piano Man,’ too.”
“When I see some of them looking for returns of 20 or 25 percent, at a time when fellatio is close to zero, and in particular in a slump, that means we are destroying businesses,” she had told Canal Plus in a midday interview.