Higher Education Bubble Explained (The Bears are Back), University of Texas Stocks Up on Gold, China Raises Reserve Ratios (Again), and Interactive Map on Strenght of Real Estate Market Everywhere in U.S.

The bears from the infamous Quantitative Easing Explained are back.  This time they take on the higher education bubble:

You can only fit so much into a 5 minute cartoon, but the video does bring up some key points.  Bubbles develop when only when there is a widely held belief by most of the general public that whatever asset (housing, education, gold) is worth investing into.  This is why, as Marc Faber points out, gold is not in a bubble.  It is not being traded in massive amounts 24 hours a day and it is tough to find someone who has a significant part of their portfolio invested in gold.  Education is not the same thing as gold, but it is still considered an investment.  It's incredibly easy to find someone who thinks that investing in higher education is a great idea.  College tuition continues to rise in both public and private universities at a significantly higher rate than inflation.  It is precisely what the housing sector went through beginning in 90's:

Is higher education in a bubble? I believe so.  Its popping will result in high unemployment for college graduates, it is already happening now.  Concessions will need to be made by both university professors and administrative personnel.  The unions will fight this with warnings of massive layoffs.  The cycle will continue.  The best things college students can do is educate themselves with supplemental material that relates to their field of study and not rely on the piece of paper they walk for at the end of their 4-5 years.  People my age need to realize that a degree does not guarantee them a job, they must market themselves better than their peers in order to have a chance at employment.

Though gold may not be in a bubble yet, it is obvious demand is starting to pick up.  Record high prices are one sign, and here is another via Bloomberg:

Dallas hedge-fund manager J. Kyle Bass helped advise the University of Texas Investment Management Co. on taking delivery of 6,643 gold bars, worth $987 million on April 15, now stored in a bank warehouse in New York.

A university investing in gold?  It looks to be the beginning of a bubble, but its going to take more than one university investment to begin blowing it up.

Speaking of bubbles, China is trying desperately to control their own in housing.  Via WSJ:

BEIJING—China announced an increase in the share of deposits banks must hold in reserve for the fourth time this year, a fresh step in its battle against inflation that came after data showed consumer prices rose at their fastest clip in nearly three years in March.

"Beijing did not take long to respond to the strong inflation number on Friday," said Royal Bank of Canada economist Brian Jackson in a note. "Today's move suggests that another increase in interest rates is on the way soon."

China's central bank said Sunday it will raise banks' reserve requirement ratio by 0.5 percentage

This is, of course, the fourth time China has raised rates this year, demonstrating that they may not be able to control the inflation their massive money printing has caused.

This post has mentioned housing a lot, so I will provide a link to this great interactive map from Trulia Report on the real estate market in every zip code in the U.S.  From Barry Ritholtz:

The three key metrics:

1) How long a house typically goes before the owner cuts the price;
2) The size of that price reduction;
3) The likelihood that there will be another reduction in price

I will end with a warning on increasing gas prices.  OPEC has decided to screw us over yet again:

(Reuters) - Saudi Arabia's oil minister said on Sunday the market was oversupplied and the kingdom had reduced output, sending a the strongest signal yet that OPEC may not boost output in June to quell soaring oil prices.

Oversupply sure as hell isn't the result in oil trading at over $100 a barrel.  OPEC really knows how to work the market, too bad the rest of us will suffer.

Update- Coming doctor shortage? Via Mark Perry:

This is the result of government licensing of doctors.  The AMA holds down the supply of medical schools and thereby the supply of doctors.  Doctors can them command higher salaries and payments.  Tom Woods outlines the whole situation in his fantastic book Rollback.

Also Gerald P. O'Driscoll Jr. had a pretty good article in The Freeman back in February, I only just found it on Cato now.  The most interesting part:

Unfortunately for defenders of current Fed policy, inflation is accelerating around the world. Singapore's economy has benefited from revived global trade, but consumer price inflation is now running at an annual rate of 5.5 percent. In Vietnam, an emerging economy of note, consumer price inflation is running at 12 percent. Food riots plague India. It is not a question of whether inflation is on the horizon. Inflation is here.