Crash Course: Chapter 15 - Bubbles by Chris Martenson

[candistyx]

I hope house prices plummet. I want to move out and my parents never want to sell their house.

[gijs370]

So explain why gold is not in a bubble? Same graphs.

[dj4monie]

@gijs370 Gold is not a bubble. Smart investors run to stable investments. Gold has been used as money or capital for what a thousand years. You think because we went off the gold standard under Nixon and into a fiat currency nonsense that this modernize the money system? If so, when why did we need the financial modernization act under Clinton??? We never needed to go off the goal standard. The Government wanted to run up debt so it could fund its war machine.

[christo930]

How did the tulip bubble destroy wealth? I can see minor wealth destruction by diverting food producing land to tulip bulb production. But it seems to me that very few people get very wealthy and almost everyone else who participated loses their money. So it's really a wealth redistribution phenomena. Aren't there a lot of people, particularly people who would be watching this video, demonstrating the same mentality that other bubble participants demonstrated when it comes to precious metals?

[carlosZ1981]

Yes.

[4palacio]

is college the next bubble?

[stocktradinginvestor]

In a non credit economy, people would still sell other assets to get into the hot asset and suppress the price of other areas to get into the hot area, and that would have a very similar effect to borrowing from future earnings because they intend to buy back whatever other goods they sell in order to buy the hot commodity with future earnings anyway. The cheaper other things get as a result, the more leveraged a "cash" based economy would be until 100% of all cash is allocated towards it.

[stocktradinginvestor]

Bubbles still occur in any economy because capital tends to concentrate to the "hot" area. Bubbles always remain because human emotions always remain. The true solution therefore is not only a structural change to the system, but economical and financial training early on in people's lives to condition them to behave more rationally. In other words, financial and economic teaching in our school system

[dj4monie]

@stocktradinginvestor That is only part of the problem. Structural change is needed because of other issues like people living longer and automation/robots replacing humans for most labor task. That will happen in your lifetime (if your under 50) by the time you retire you'll likely be among the last people to have experienced full time work. Work hours will be cut soon, you watch.

[stocktradinginvestor]

@8:48 Not likely but not impossible if you require less and less money down as well as less and less monthly payments. For example, to buy a $100,000 home you need $10000 down and $1000 a month then years later you can buy it for $8000 down and $800 a month. Or if houses were destroyed and/or population grew faster than new houses were built so fewer and fewer had access to homes. Average mortgage could also go from a 5 year to 10 year to 20 year to 30 year to 40, 50, etc.

[Youmakemefart]

I find it funny when people say "It's a socialist conspiracy - forgetting that the goldstandard was lifted by a republican (nixon), wage reduction and decreased savings began under a republican (reagan) and most of the debt was accumulated by a republican (bush) by fighting two wars with simultaneous tax cuts. Of course Obama is doing little to solving the problem but calling it a "socialist-conspiracy" is just nuts....

[stocktradinginvestor]

@Youmakemefart Read Carrol Quigley "Tragedy and Hope" or "naked Capitalism", and read about the CFR. Watch Antony Sutten's lectures connecting the socialist movements to wallstreet and international bankers. The central bankers love socialism because they control the government and the government controls the people so they control the people but the government takes the blame. It's not to do with a "political party" that some lying politician claims to belong to.

[dj4monie]

@stocktradinginvestor What are you talking about? Socialism for the Rich, the Moneyed and Lucky is what is happening now. A Social Democracy like what's in much of Western Europe is for the people, not the Corporations or Banks. Greece will default on its debt, you watch. The Government wouldn't let the banks that made horrible bets fail and that is socialism or welfare for the rich, they f-up they get bailed out, you lose your job, house, etc, and you don't get sh*t.

[bolognadetector]

The 10 year gold chart at Kitco is starting to look a lot like the DOW chart at 4:44 right before it took a dive. This video was made in February 2009. It is now July 2011 and gold has risen more than 50% since the video was made. I wonder what CM thinks about the gold chart now. Sure, it could hockey stick higher, but...

[somekindofalien]

Your voice never sounds the same from one chapter to another, catching colds now and then? ;)

[barbie786able]

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[Freedomloveandtruth]

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[Waterflux]

As for the Fed and their easy money policy, I think the simplest explanation is that they wanted to maintain the status quo, that tomorrow will be about the same as yesterday, that today's problems will be taken care of sometime in the future. Notice that this sort of thinking goes across the board within the ruling elite; too many folks over there think too much alike. Garbage-in-garbage out at its best!

[Worldslargestipod]

household incomes remained flat partially because household sizes were falling.

Not to excuse the fed of course.

[Brucejosephlive]

@madmankitchen

Without a doubt. The majority of my Canadian brethren really are clueless. It's a shame but such is mass psychology.

[flagship21]

What about Canada is this a housing bubble???????

[Brucejosephlive]

@flagship21 Yes my friend Canada is certainly in a housing bubble.

[flagship21]

It;s like double bubble real estate and dot com

[Fredrickdf]

Hot Crazy wife for date *lushfmlk.info*

[Suphlacki]

You can always barter ammo, it's the money of the future.

[ymirfrostgiant]

Now I just know there are going to be a lot of people who come away from this lecture sadly waving Ron Paul flags. I'm afraid the American libertarians and their advocacy of unbridled tyranny and even less government regulation could end up being the real hijackers of this catastrophe.

[tarummleirbag]

dsaddsdsadaad

[Leobons]

I just have to say this material is great! (won;t make any doom statements though, I think we have enough)

[zonsb]

Fear and scarcity are the two most used strategies by governments to control mass populations via increasing and then decreasing the money supply. MSM (mainstream media) telegraph unfounded fear and scarcity. For the common man is the true creator of wealth. Not governments or banks.

[zonsb]

Remember that century to century, decade to decade, year to year man advances technology and abundance exponentially. Though hidden from most people's awareness it is now becoming noticeable at the up turn of the hockey stick. Freedom information/technology is also at the seemingly abrupt up-turn of the hockey stick.

The Ultimate Solution perfectly poised to collapse the anti-civilization. Simultaneously creating the Civilization of the Universe on Earth.

[zonsb]

Wealth isn't destroyed. Rather, it's wealth transference.

International banksters in control of money, central banks and governments have used the inflation and deflation cycle of money to transfer value producer/creators wealth to themselves and their corporate interests.

[herbs814]

The housing bubble isn't even the biggest bubble. The enormous government bubble that has been inflated since 1913 to the present still needs to be deflated. Our incomes cannot sustain the excessively intrusive federal government. The government bubble must be popped. It may take decades to shrink the government to its proper size, but it is an absolute necessity.

[MrWarisnottheanswer]

His conclusions are all wrong about "people". People don't know this can happen untill the economists make it happen. Even then few learn how the sausage is made.

[StLouisEarl]

So if I am getting some of this correct. ( I'm no financial expert, nor mathematician. ) But I see this as our dollar facing possible failure to hold it's worth, and if this is and or proves to be true. Then I think we are again being swindled with all this hoopla about cashing in all our gold jewelry for the dollar. Just think, who will be holding the wealth again if this proves to be true? I am interested on other peoples point of view on this angle.

[xXU2BerXx]

@ StLouisEarl

Yes.The dollar has lost about 95% of it's worth since the creation of the Federal Reserve in 1913, and this is no coincidence. Gold and silver are a hedge against inflation, as they don't lose value in an inflationary environment.

[jcrb2000]

The Solution to our problems is:

END THE FED-END THE FED-END THE FED-END THE FED-END THE FED-END THE FED...............

[newexperiment]

Your guesstimations are fine if we are at the peek of the bubble. But.. for all you know we are only half way there.

[LDRinbrampton]

ya i was thinking that same thing, he basically just cut off the graph and guessed. But the sad thing is we better hope he's right...

[newexperiment]

indeed. this is the BEST case scenario.

[comboverchum]

Confidence followed by hysteria and short term ad hoc solutions. The masses will allways move in the same direction.Maybe the the way to win the ratrace is to do the opposite?

[mrzack888]

the next bubble to bust is the citizen and world faith trust in the American government

[sonyse2t5]

Anglo saxons are finished!

[newexperiment]

lol. No..  They will just drop down to only 200% the power of non-anglo saxons instead of the current day 2000%.

=)

[balidog4life]

does anyone know how long this guy has been saying these things for? I.e. was he predicting this 2 years ago or is he just cleverly using the current situation to promulgate views.

[ReverandCiderMan]

August 2008 these videos appeared on the internet, that was before Leighman bros collapsed. How long he's been saying this I don't know, but it was deffinatly before the reccesion started and its reasonable to assume, since it would take a long time to coroborate the data for these videos, he's been saying it for some time.

[joejoe652]

At 7:00 that bubble was created by the Fed through increacing the money supply, lowering interest rates and manipulating the American people with a false sense of security. Why?? So when the bubble bursts we beg for Government help. Welcome Socialism goodbye Republic.

Read: "The Creature from Jekyll Island" by G. Edward Griffin 1994 He is either a psychic or a very smart man.

[rsaathoff]

@joejoe652 Griffin although he doesn't come out and say it, he recognizes the current system and the Babylon System. Look at the back of the dollar bill you will see the all seeing eye of lucifer.

[kickndave21]

I think this may be a book on cd, and yes this guy does know about economics. Listen to all the chapters - its pretty good. BTW I have a degree in Econ, and although this isnt the easy answer, I think hes correct.

[kurktchian12]

whats your qualification and expertise?

[birdieman073]

you don't need a plaque on the wall to be able to understand things. how about listening and seeing what you think, rather than asking why he should be able to say what he says? I mean no disrespect, just hoping to point something out

[kurktchian12]

i wasn't asking chris... some guy started saying the person who posted the videos doesn't undrstand anything because he doesn't have any qualifications ... so am asking what are his...

[birdieman073]

oh okay my bad, i guess i didn't understand the context

[VinceP1974]

I call it the GSE/Trade Deficit Funding Bubble

[Architectonic01]

I missed out the key point between my two comments.

The CPI was adjusted to remove land values (or imputed rent). Real rent values were still considered, however at a much lower percentage of costs compared to an average household.

The way the CPI is measured has a direct effect on the distribution of resources in the economy - an example is rent becoming undervalued compared to house and land prices.

Lo and behold we had a housing bubble of magnitude that we have never seen before.

[Architectonic01]

(continued)

Australia took similar actions and the continuation of the housing bubble was clearly underway in Sydney in 1998. In the US the credit bubble seemed to favor the stock market first and it only made a major impact after the crash and interest rates were artificially reduced further.

Strangely enough more people listen to me now than they did in 2004-2005.

[Architectonic01]

Until the mid 90s, housing costs including land were considered in the cpi and related indexes. However in the early to mid 90s, economists in western countries spontaneously decided that the cpi somehow overstated the cost of living

The reality was that the housing credit bubble which started after interest rates normalized flattened out after Volcker's 'shock therapy' and economists were searching for a way to let it continue.

[micksmart]

The Best course on the US Finance from Common Sense point of view!

It is such a great pity that 99.9% of youtubers will not see this.

[freedomfighterone]

Let us not forget who did this. Alan Greenspan and all the top criminals in the Federal Reserve need to be arrested for intentionally destroying the American economy.

[christo930]

I believe that we nay go into another bubble which would be historic.

A green energy bubble is a likely outcome of all of the energy problems. You can see early signs of it. There are many newly created Green energy companies and they are getting some contracts. With the worlds oil supply peaking, people will expect massive growth in the Green energy sector.

WATCH OUT FOR A GREEN ENERGY BUBBLE.

People will be talking about the growth needed and will have unrealistic short term expectations.

[haole80]

george4title is a badass

[gio4fun]

Thanks a lot! Excellent information!

[Diomedes01]

"Thats what this moran leaves out"

Just a piece of advice: when you are attempting to insult another individual by calling him a "moron", try spelling the word right.

[FranceParisian]

lol

is that ?? More On?

Just a banter babes

[personalfunfest]

this is STUPID! If you want the real truth about bubbles, research NEMESIS and djhives. It's not an "asset" bubble it's a DEBT bubble!! Key word: DEBT. Thats what this moran leaves out - that its DEBT! borrowing = debt = inflation = bubble = eventual crash = WAR/DEATH to balance the game out... repeat.

[Rodrigoandnietzsche]

watch the other videos. he speaks very lucidly about debt

[StarvingForTruth]

No. He's describing it as a mathematical function, really. Another phenomenon involving the stretching of limits, and the return to baseline.

It is a phenomenon of life and behavior that extends far beyond your particular use here.

Watch his whole series. He and you both see the same outcomes for the same reasons.

chill......

[FranceParisian]

Hey StarvingForTruth!

I like you comment however can you please expound on this some more! I would be very interested to know what's in your head in relation to your comment

Thanks

[StarvingForTruth]

If you watch all his videos, which are free on his website, you'll see what I'm getting at.

just google "crash course martenson" and you'll get it. "The Crash Course". It's 3.5 hours of great stuff.

the guy's a PhD scientist, MBA, and former VP of a Fortune 300 company. He's well qualified to discuss the mathematical, scientific, and economic aspects of recent events.

this 'bubble' concept is better discussed in terms of exponential functions, which the vids discuss.

[StarvingForTruth]

oh- there's the link to his site right there....

nevertheless, this thing about exponential functions and natural limits of systems is pretty cool stuff.

don't let the economists frame the conversation with their jargon - it's intentionally confusing, I believe. designed as much to obfuscate as to define. a thieves cant, if you will.

plus, there's the simple history of currencies...

check his site out. the videos build very clearly. you'll love 'em.

[FranceParisian]

I did watch all the series and I watched it on his website, I just came to YouTube as I am very curious about the comments of viewer to get a better perspective and read the devil's advocates commentary. I think I am now close to being well informed to make my judgement and decision on how I am going to view my future and that of others.

Thanks once again

[FranceParisian]

Thanks for your reply

I asked because when you wrote "Watch his whole series. He and you both see the same outcomes for the same reasons." that this comment come across to me as verging on the negative side of commenting more than on the positive side. It made me curious what you meant by that

[StarvingForTruth]

in terms of prices, it's a simple bubble. houses are overpriced assets.

like the tulips.

[owen77799]

excellent info

[frustratedscreenwr]

brilliant analysis and explanation - 5 Stars

[uricehe4]

About the best and most concise explanation I've seen of what's happened to us, and one very easily understandable even to those who've never studied any economics. Very well done.

[ksocean]

Newton's loss of £20,000 in 1720 roughly translates to £30M in comparable wages today.

[2jake077]

That was awesome