The US Economy Is One Giant Bubble (Audio)

Last weekend, Peter Schiff spoke with Free Talk Live, a nationally syndicated radio show. They discussed the growing student debt bubble, Peter’s imprisoned father Irwin, and the reasons why American businesses are moving to Puerto Rico. You can download the free report they discuss here: The Student Loan Bubble: Gambling with America’s Future.

The bubble in student loans is actually a small part of what is going on. The government has managed to reflate the housing bubble, the stock market bubble. We have a bond market bubble, a dollar bubble, a consumer loan bubble. The whole US economy is one gigantic bubble at this point. That’s all we got left…”

Highlights from the interview:

“This is another example of government creating a problem before attempting to solve it. But you know, before the government got involved, college was not that big an expense. Kids could easily work their way through school. If your parents didn’t have the money to pay your tuition, like my dad – my dad’s parents didn’t have any money, so he worked his way through school. He was a waiter over the summer… Almost all my dad’s friends did the same thing. They all worked their way through college. They didn’t have any debt. What happened was a bunch of politicians tried to get students to vote for them by promising, ‘Hey, we’ll guarantee loans so you can borrow money to go to college instead of working. Then when you graduate, you can just pay of your debt and you’ll get a better job because you’ll have a degree…’

“When it first started off, tuition probably didn’t start rising rapidly right away. But once the colleges caught on, ‘Hey wait a minute, we can raise our tuition as much as we want, because the students aren’t going to push back. They’re just going to get the money from these loans.’ And so college began to get more expensive, because the government was making these low-interest rate loans available. Then it became a self-perpetuating spiral. As loans made college more expensive, the government would now increase the amount of the loans. The colleges would just keep increasing prices… Now nobody works their way through college, they just graduate with a mortgage…

“You have a record number of college grads that are doing menial labor. Labor that you could do even without a high school degree, let alone a college degree. If you want to watch a funny little video that I did… It’s a video of me walking down Bourbon Street with a microphone interviewing the people that worked there. The people that are the bouncers at strip clubs, bartenders, petty cab drivers, people taking out the trash. I’m asking them if they went to college, and if they did, what their major is, what year they graduated, and how much they borrowed. Everybody I talked to is a college grad in debt. And they’re all doing menial jobs – jobs anybody can do…

“The bubble in student loans is actually a small part of what is going on. The government has managed to reflate the housing bubble, the stock market bubble. We have a bond market bubble, a dollar bubble, a consumer loan bubble. The whole US economy is one gigantic bubble at this point. That’s all we got left… There is no avoiding this. The government has created this disaster, and there’s no way around it… Because they’ve succeeded in delaying it [the inevitable collapse], it’s going to be much, much worse. People have to protect themselves from this moreso than the past crises…

“Owning gold is one way to protect yourself. But people should diversify. They shouldn’t only have gold. They should have some gold, but they should also invest internationally. We help people do that…”

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