Via: Zero Hedge
Submitted by Tyler Durden on 03/06/2013
For those who, like Time magazine and its exhaustive treatise on soaring healthcare costs, are shocked and confused how it is possible that prices for some of the most rudimentary staples, among them basic medical care and college tuition, have exploded we have the answer. In fact, we had the answer in August 2012, when we showed our “Chart Of The Day: From Pervasive Cheap Credit To Hyperinflation.” We will take the liberty to recreate the chart from 7 months ago here:
As the title, and chart, both imply, the simple reason why college tuition is up 1200% in 35 years, while healthcare fees have soared by a neat 600% or double the official cumulative inflation, is two words: “cheap credit.” This is also the reason why the BLS and the Fed can get away with alleging inflation is sub-2%: because the actual cost for any of these soaring in price services is never actually incurred currently, but is deferred with the only actual outlay being the cash interest, which as everyone knows is now at the ZIRP boundary thanks to 4+ years of ZIRP and three decades of the “great moderation.”
Of course, if one actually were to calculate inflation by how it should be captured in a world in which half the base money is in the form of reserves which are only used to fund risky asset purchases (for now), which includes nominal stock and bond levels, it would be will in the double digits, but that is an exercise for a different day.
Which is why we are confident it will come as no surprise to anyone, especially not those who have no choice but to follow the herd and pay exorbitant amounts for a generic higher education that has negligible utility at best in the New “Okun’s law is terminally broken”
Normal, that tuition at public colleges jumped by a record amount in the past year!
Read more: here