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Speaker 1: When you look at prices, are things expensive or are

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Speaker 1: they cheap? And are they expensive or cheap compared to

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Speaker 1: what relative to what? Now a lot of people think

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Speaker 1: that real estate is way too expensive. It's at record highs,

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Speaker 1: but expensive compared to what compared to U. S. Dollars

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Speaker 1: or compared to gold or oil, or rice or orange juice.

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Speaker 1: And you need to understand there's a difference of price

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Speaker 1: than U. S dollars and purchasing power, the purchasing power

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Speaker 1: of those units. When you understand from this perspective, you

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Speaker 1: get a whole new way to look at things. And

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Speaker 1: so today I am joined by my good friend Jason Hartman.

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Speaker 1: He's a real estate expert, a market analyst, and he

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Speaker 1: is going to show us a new way to look

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Speaker 1: at things and reframe things so that you can have

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Speaker 1: more success. Um. He's got the facts, the data. Uh Um.

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Speaker 1: I took a ton of notes. This is something that

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Speaker 1: really good and it's going to give a different perspective

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Speaker 1: on where we're at in the market. We're at the

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Speaker 1: market sect and we also dig into some tough topics

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Speaker 1: including um where I where he thinks we're going in

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Speaker 1: the future, how you should look at the market. If

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Speaker 1: you're a real estate investor or a homeowner. UM, what

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Speaker 1: factors like Wells Fargo shutting off lending does? What factors

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Speaker 1: like black Rock and Wall Street jumping into buy um

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Speaker 1: all the residential real estate what those do? Um? And

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Speaker 1: even guessing what the FED might do with housing? So

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Speaker 1: many good topics that we jumped in with Jason. Um.

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Speaker 1: It really gives you a whole new perspective that I

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Speaker 1: think is powerful. So let's go ahead, just jump right in. Everyone.

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Speaker 1: Welcome to another episode of the Market Disruptors Show. And

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Speaker 1: today I am joined again by my good friend Jason Hartman,

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Speaker 1: who is a market analyst and a real estate expert,

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Speaker 1: and he has come up with some amazing ways to

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Speaker 1: look at the data in the markets and maybe even

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Speaker 1: tell us where things are going. So Jason, thank you

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Speaker 1: so much for coming back and joining us again. Market's

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Speaker 1: great to be here. And yes, uh, you know for

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Speaker 1: so many years or decades that I've been in the

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Speaker 1: real estate business uh and and real estate investing. I

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Speaker 1: bought my first rental property when I was twenty years old. Uh.

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Speaker 1: You know, Uh, the magic question that is always what's

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Speaker 1: going to happen next? Right? How do we predict the

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Speaker 1: market cycles and you teach people that all the time

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Speaker 1: on your show. And Um, so I've I've developed an

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Speaker 1: index uh and it basically is a measuring stick comparing

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Speaker 1: real estate prices to many other things in the world. Uh.

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Speaker 1: And I believe they can tell us where we've been,

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Speaker 1: where we are now, and where we're going in the future.

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Speaker 1: That's interesting on so many levels for me. Um. I've

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Speaker 1: been working on this big thesis on cycles, which I

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Speaker 1: know I've shared with you and and and the reason

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Speaker 1: why I like historian cycles is for the same reason

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Speaker 1: it tells. It helps us know how we got here,

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Speaker 1: what's going on, and where we're going in the future.

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Speaker 1: So it's cool that you said that. Um. Now, the

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Speaker 1: other thing that also catches my interest is, Um, you're

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Speaker 1: talking about looking at the price of real estate relative

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Speaker 1: to other things. I think that you're talking about, and

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Speaker 1: that's nothing I kind of pound. The table on is

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Speaker 1: is to look at things in terms of purchasing power

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Speaker 1: and not just us dollar term, right that what you're

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Speaker 1: talking about, Yes, definitely to an extent, because you know,

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Speaker 1: if you think about it, Mark, Um, people think housing

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Speaker 1: is really expensive now because they measure it only in

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Speaker 1: one thing, US dollars and no. But you know, for example,

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Speaker 1: take this example someone saving for a house, right or

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Speaker 1: you know, uh, and say they've been saving ten years

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Speaker 1: to buy a house and they're just a home buy

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Speaker 1: or not an investor. Right, but they could be an

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Speaker 1: investor either, right, Um, so they've been saving, Well, no

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Speaker 1: one forced them to save their money denominated in US dollars, right,

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Speaker 1: they could have easily converted as soon as they earned

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Speaker 1: their dollars, they could have converted them to gold, rice, bitcoin, oil,

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Speaker 1: any one of a number of other things. And had

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Speaker 1: they done that, they would feel the price of real

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Speaker 1: estate is dramatically different than what they think of it

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Speaker 1: as based in dollars. So it's really very interesting, and

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Speaker 1: we're developing this whole new index around this whole concept

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Speaker 1: of the question that I think is really life's most

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Speaker 1: important question. I ask it all the time on my

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Speaker 1: podcast and YouTube channel, and that question is compared to

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Speaker 1: what that is life's most important question in my opinion.

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Speaker 1: Hey guys, let me just interrupt this interview real quick,

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Speaker 1: just to plug the show sponsor, and that is block Fi. Now.

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Speaker 1: Block five is doing amazing things in the bitcoin finance

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Speaker 1: space as a matter of fact, they've cracked some really

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Speaker 1: big news by bringing on the x cftc UM chair

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Speaker 1: Chris gian Carlo UM and they are one of the

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Speaker 1: most transparent, most heavily regulated UM companies inside the United States.

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Speaker 1: It gives me a lot of trust into what the

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Speaker 1: services are. Now. I've recently did a video talking about

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Speaker 1: how to retire off bitcoin, and you can do that

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Speaker 1: by leveraging debt and interest against bitcoin. And Block five

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Speaker 1: is the number one company in the United States or

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Speaker 1: maybe in the world to go to and use UM.

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Speaker 1: They are leading the charge. Their paying interest on your

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Speaker 1: bitcoin if you park it with them, or you can

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Speaker 1: borrow against it. Now, as I broke down in that video,

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Speaker 1: you can borrow against your bitcoin, and when you take

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Speaker 1: debt against it, it's not taxable. It's not a taxable event.

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Speaker 1: You can use that debt for anything that you want,

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Speaker 1: including to live off of to leverage up and buy more,

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Speaker 1: or roll it into another asset. UM. You can do

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Speaker 1: something like I've done recently, like sell some real estate

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Speaker 1: put that money into bitcoin. Now as that bitcoin price

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Speaker 1: has risen, I'm able to borrow against it and go

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Speaker 1: back and buy the same real estate or something similar.

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Speaker 1: And I still own the bitcoin, and I also own

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Speaker 1: the new asset as well. Lots of ways you can

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Speaker 1: do this UM and block five is the company that

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Speaker 1: I recommend. Down in the description, I have a link

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Speaker 1: that you can click on. If you choose to use

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Speaker 1: that link, you can earn up to a fifty dollars

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Speaker 1: in decoin just for using that link. So check out blockline. Now,

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Speaker 1: such a good way to look at that. UM. A

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Speaker 1: lot of people don't realize that, but right we're always

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Speaker 1: trading one thing for another. So I'm trading my dollars

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Speaker 1: for the real estate or trading my dollars for that meal.

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Speaker 1: But to your point, it could have been trading rice

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Speaker 1: or oil for that that house with that meal. UM

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Speaker 1: and and and uh. I I often throw these numbers

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Speaker 1: out and I don't have the numbers. I just say hypothetically.

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Speaker 1: But you know, let's say, you know, nine six the

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Speaker 1: median home price was fifty dollars. Today it's now up

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Speaker 1: to like three. But back then it was so many

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Speaker 1: ounces of gold, there's so many barrels of oil, and

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Speaker 1: today it's about the same amount of ounces of gold

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Speaker 1: and same amounts of barrels of oil. UM. But of course,

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Speaker 1: I'm just kind of spitball on that, but I think

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Speaker 1: you actually have some data that shows that we do.

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Speaker 1: We do. We have a whole bunch of data on

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Speaker 1: not just oil and gold, but a whole bunch of

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Speaker 1: other things. So let's dive into it. Yeah, let's dive

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Speaker 1: into it because I think, again it's something I pound

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Speaker 1: the table on the video that went live yesterday. Again

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Speaker 1: I tell people start thinking about things in terms of

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Speaker 1: purchasing power, not dollars, and and and just while you

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Speaker 1: get ready, I know you're gonna show some slides. I'm

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Speaker 1: excited to see them, but to set the stage a

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Speaker 1: little bit um. You know, I've done quite a bit

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Speaker 1: of a discussion on hyperinflation that's happened in other countries.

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Speaker 1: And one thing that really just shocked me. I did

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Speaker 1: this video on when when, uh how a currency dies?

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Speaker 1: And and I read this book called When Money Dies,

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Speaker 1: and it talks about hyperinflation in Germany after the war.

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Speaker 1: And what was interesting is um as the prices were

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Speaker 1: going higher in their currency, everyone thought they were getting rich.

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Speaker 1: My house has never been worth this much money, My

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Speaker 1: goal has never been worth much money. I better sell

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Speaker 1: my whatever asset now. While it's still high before it

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Speaker 1: drops back down. So they did, and so they sold

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Speaker 1: all our assets for currency, which then ended up being

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Speaker 1: worthless and they were it was they ended up burning

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Speaker 1: it in the fireplace instead of would because it was

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Speaker 1: actually worth less than would. So anyway, it's super important

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Speaker 1: to understand purchasing are So let's go ahead and jump

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Speaker 1: in and yeah, and do you know, mark to your point,

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Speaker 1: if if you go to Wikipedia and you type in

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Speaker 1: Wimar Republic, Wimar Germany, right, you'll see that picture which

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Speaker 1: you I'm sure you've seen of a woman basically loading

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Speaker 1: the the currency, okay, the Deutsche marks into a furnace

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Speaker 1: to extract heat from them because it was cheaper than

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Speaker 1: trading the currency units for wood. I mean, you know,

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Speaker 1: it's it's just amazing, yeah, you know. And every fiat

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Speaker 1: currency ever throughout history has gone to incenttrinsic value the

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Speaker 1: paper it's printed on. So, uh, currency is only thirty

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Speaker 1: five years and we're at fifty now, so we're we're

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Speaker 1: we're living on borrowed time, to say the least. Well,

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Speaker 1: this is a seminal moment in history because it is

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Speaker 1: the fifth year anniversary of Nixon detaching the dollar from

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Speaker 1: the gold standard. It's actually next month. So uh yeah,

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Speaker 1: truly truly amazing. So yeah, I'll share my screen and

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Speaker 1: let's dive into this. I'm glad we're on the same

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Speaker 1: page with that. And so you know, it's really all

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Speaker 1: about the measuring stick. And like we were saying, people

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Speaker 1: are using the dollar the major as the measuring stick,

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Speaker 1: and that is a mistake. Uh. You know, no one

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Speaker 1: cares about dollars. They only care what dollars can buy us, right. Uh.

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Speaker 1: And you know, before I dive into this too deeply,

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Speaker 1: I just want to reiterate something I've talked on your

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Speaker 1: show about before. There are really three types of real

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Speaker 1: estate markets, linear, cyclical, and hybrid markets. They act differently. Uh.

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Speaker 1: In this example today, just for the interest of time,

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Speaker 1: we only are comparing to median home price. But just

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Speaker 1: understand that if you were to drill down, things change

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Speaker 1: whether you're in Los Angeles or Memphis, right, very different

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Speaker 1: in the markets we buy properties. And so so I

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Speaker 1: just want you to know that. And the question is

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Speaker 1: compared to what it happens with trading in the economy,

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Speaker 1: it also happens in every other part of our life.

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Speaker 1: You know, we are comparison be beings by nature. We

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Speaker 1: look at our neighbor's house. We look at our neighbor's

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Speaker 1: yard and say, hey, are they doing better than I am?

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Speaker 1: We look at their car. Uh. You know, when we

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Speaker 1: were single, we look in the marketplace for a mate

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Speaker 1: and we compare the Only reason you know, for example,

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Speaker 1: that your wife, the woman you married, is more beautiful

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Speaker 1: than another was by comparison. Right, That's that's the only

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Speaker 1: way we know anything is by comparison. So life's most

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Speaker 1: important question is compared to what to drill down on

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Speaker 1: that question? Uh? For this example as we're talking today

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Speaker 1: is Uh, let's talk about our friend George's question is

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Speaker 1: is it cheap or is it expensive? And so as

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Speaker 1: we do that and we consider whether or not we're

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Speaker 1: in a bubble, the index can give us the answer.

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Speaker 1: The h C I, the Heartman comparison index can give

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Speaker 1: us the answer. And um, it can also maybe we'll

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Speaker 1: leave that up to the people listening and watching, will it?

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Speaker 1: Will it tell us when the bubble will pop? Right?

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Speaker 1: And so's the question I want to know the answer to, right, right, Well,

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Speaker 1: we're gonna explore that one for sure. And uh, and

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Speaker 1: we need to understand that when we're thinking about this

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Speaker 1: that a house or an apartment complex as investors, right,

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Speaker 1: it's made up of commodities. And that's why I call

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Speaker 1: this packaged commodities investing. So we're gonna look at ingredients

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Speaker 1: steal lumber, copper, wire, petroleum products, etcetera. We just have

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Speaker 1: to understand that a house is just a set of

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Speaker 1: commodities that are assembled in package. Um. So of course

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Speaker 1: I've got that free book for all of your listeners

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Speaker 1: at Pandemic Investing dot com. Or I've taken a lot

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Speaker 1: of these principles and applied them to the times we're

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Speaker 1: living in, and that's at Pandemic Investing dot com. We

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Speaker 1: talked before on your show about inflation induced debt destruction

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Speaker 1: and it totally uh shows when you look at the index,

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Speaker 1: because when you price things in real dollars and you

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Speaker 1: compare say the consumer price Index with the Case Shiller

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Speaker 1: Housing Index, you see that mostly it's parallel, but at

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Speaker 1: times it gets really out of sync. And uh, that's

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Speaker 1: just what happens. Uh. And we've had our our money

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Speaker 1: printer in chief, Jerome Powell, printing money like crazy. Um,

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Speaker 1: it wouldn't before we dive into the index and the comparisons.

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Speaker 1: We have to talk about a couple other indexes real quickly.

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Speaker 1: One is the HPI, the house price index. I think

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Speaker 1: it's very flawed and does not do as good a

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Speaker 1: job as the index will talk about. Uh. And then

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Speaker 1: of course the Case Shiller index also very flawed, because

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Speaker 1: the twenty markets the Case Shiller Index profiles could really

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Speaker 1: lead someone to make big, big mistakes. Why do I

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Speaker 1: say that, because fifteen of those twenty markets, two thirds

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Speaker 1: of the mark are cyclical markets, and it just wouldn't

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Speaker 1: be uh, it wouldn't be prudent for a real estate

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Speaker 1: investor to decisions based on only those cyclical markets or

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Speaker 1: at least two thirds cyclical. UM. The big, big, the

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Speaker 1: big problem that I have with with those those home

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Speaker 1: price indexes and the Schiller index UM, and I've done

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Speaker 1: videos on this as well, is that UM, they take

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Speaker 1: into account the price of the home, but nobody pays

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Speaker 1: the price of the home, right so wall um, we're

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Speaker 1: back up the two thousand eight levels or maybe slightly above.

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Speaker 1: Interest rates are half and so if you look at

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Speaker 1: the month payment, I think it's you know, over of

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Speaker 1: first time buyers are financing the home financings. So it's

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Speaker 1: always about the monthly payment. And so if you look

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Speaker 1: at um the payment amount, because interest rates have dropped

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Speaker 1: in hal since two thou eight, UM, it gives you

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Speaker 1: a different picture. Do you take that into consideration? Absolutely,

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Speaker 1: that's the second part of the index is payment. The

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Speaker 1: first price part is price. And I couldn't agree with

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Speaker 1: you more. Nobody buys a house based on the price.

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Speaker 1: They only buy it based on the payment. So you're

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Speaker 1: absolutely right about that. UM. This index, the Housing Affordability Index,

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Speaker 1: is actually my favorite outside of the new HCI index

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Speaker 1: that we launched, because it does consider payment. It looks

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Speaker 1: at median house payment versus media and income in a

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Speaker 1: given area. It's major flaw, though, is it doesn't account

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Speaker 1: for foreign money or retirees that buy properties for cash. Okay,

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Speaker 1: so there are some flaws in that as well, and

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Speaker 1: I think the UH the Comparison index really really gives

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Speaker 1: us the answer. So let's look at gold gold. Although

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Speaker 1: I'm not a gold bug, and I don't think you

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Speaker 1: are either. Although I'm not sure I've I've been a

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Speaker 1: gold bug for a dozen years now. I consider myself

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Speaker 1: a sound of money advocate. Yes, I love it, and

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Speaker 1: I'm guessing bitcoin is your sound money. So we're gonna

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Speaker 1: get to that one next. But but let's look at gold.

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Speaker 1: I mean look gold, to be fair to it has

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Speaker 1: been considered money for five thousand years. Humanity has considered

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Speaker 1: gold to be money, and uh so it would be

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Speaker 1: completely unfair to not consider gold. So if you go

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Speaker 1: back to nineteen seventy, nineteen seventy one year before we

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Speaker 1: went off the gold standard, if you wanted to buy

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Speaker 1: the Median Price House for twenty two thousand dollars I'm

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Speaker 1: rounding off here obviously, and you had gold at thirty

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Speaker 1: five dollars, it would cost six hundred and forty six

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Speaker 1: ounces of gold to buy the Median Price house. Fast

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Speaker 1: forward to the year two thousand, a generation ago. Back then,

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Speaker 1: twenty one years ago, to buy the Median Price House

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Speaker 1: for a hundred and seventy three thousand dollars with gold

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Speaker 1: at two hundred and eighty three dollars an ounce, it

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Speaker 1: would take you six hundred and ten ounces of gold

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Speaker 1: to buy the Median Price House. But guess what mark today,

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Speaker 1: if you want to buy the Median Price House, it

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Speaker 1: will only own only cost you a hundred and ninety

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Speaker 1: four gold. So your briefcase full of gold has gotten

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Speaker 1: a lot lighter. Okay. Um, it's so measured in gold

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Speaker 1: or priced in gold, is housing cheap or expensive? Cheep?

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Speaker 1: It's got much very go on from six to two Yeah, yes,

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Speaker 1: sixty six, yeah, yeah, you're right, and even compared to

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Speaker 1: a generation ago or fifty one years ago, it's truly

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Speaker 1: amazing that if you were saving your money in gold,

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Speaker 1: your house has gotten a lot cheaper. Okay. So let's

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Speaker 1: look at bitcoin, your favorite, right, and hey, I'm a

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Speaker 1: fan too. I I hope bitcoin succeeds wildly. I would

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Speaker 1: love it. Uh, it doesn't go back far enough with bitcoin.

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Speaker 1: But in two thousand ten is you know, that's where

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Speaker 1: we start to buy the median price house at two

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Speaker 1: hundred and twenty four thousand dollars take you seven hundred

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Speaker 1: and seventy three is in bitcoin? Uh? A year ago,

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Speaker 1: last year to buy the median price house at three

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Speaker 1: hundred and fifty nine thousand dollars twelve bitcoin. And today

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Speaker 1: even though bitcoin isn't that much higher because it's had

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Speaker 1: some losses lately, Uh, the house price at three five Uh,

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Speaker 1: you're you're looking at thirty four thousand bitcoin? Okay, But

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Speaker 1: dollar bitcoin dollar bitcoin, and it takes ten bitcoin. Okay,

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Speaker 1: So priced in bitcoin, is housing cheaper expensive? Right? It's

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Speaker 1: gotten from seven thousand two to ten a lot cheaper,

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Speaker 1: A lot cheaper, Okay. The most important commodity on Earth,

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Speaker 1: I would argue as oil. There is no commodity on

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Speaker 1: Earth that is more important than oil. Forget about what

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Speaker 1: all the tree huggers say doesn't matter. The fact is,

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Speaker 1: at the end of the day, the world is still

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Speaker 1: running on all. Okay. In nineteen seventy oil was only

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Speaker 1: three dollars a barrel three bucks. Today it's seventy five. Right.

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Speaker 1: The median house price twenty three thousand dollars, give or

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Speaker 1: take sixty seven hundred barrels of oil to trade that

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Speaker 1: for a house. Okay, I'll jump to the year two thousand,

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Speaker 1: sixty three hundred or rounded off sixty d barrels of

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Speaker 1: oil to buy the median house. Today only forty hundred

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Speaker 1: barrels of oil will buy you the Median house. So

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Speaker 1: priceton oil is housing cheaper expensive? Well, it's definitely gone

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Speaker 1: from gotten cheaper about a about a third cheaper than

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Speaker 1: it was in What's interesting is is I like to

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Speaker 1: ask people this question which is, do you think, given

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Speaker 1: all the advancements technology, that it's actually more work to

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Speaker 1: bring oil to the marketplace? Uh like to try to

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Speaker 1: to bring it out, to bring it to transport it package? Like,

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Speaker 1: do you actually think it's more expensive or is it

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Speaker 1: less expensive? Right, it's gotten easier, it should have gotten

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Speaker 1: I mean, has gotten easier and should have been cheaper.

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Speaker 1: But but it's gone the other way. And and not

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Speaker 1: only that, you know, what you mentioned is certainly true.

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Speaker 1: The technology of the actual you know, running of the plant,

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Speaker 1: like we'll call it the heavy equipment that's better and cheaper, right,

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Speaker 1: but also just the technology of the software that controls

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Speaker 1: the inventory supply and manages that and manages this shipping

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Speaker 1: and supply chain that's gotten so much better and so

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Speaker 1: much more efficient, just radically efficient that um, yeah, it

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Speaker 1: is cheaper. So that what that really shows is that

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Speaker 1: the dollar is just losing value dramatically. Okay, So orange juice,

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Speaker 1: now this one is different. Okay, this one is different

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Speaker 1: in orange joice priced and orange juice houses have become

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Speaker 1: a lot more expensive. So what I recommend to all

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Speaker 1: of our listeners is, uh, you know, just to go

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Speaker 1: look at the chart n seventy it took you fifty

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Speaker 1: one thousand pounds of orange juice to buy a house. Uh,

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Speaker 1: two thousand, because I'm just skipping to you know, make

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Speaker 1: in the interest of time, two hundred and ten thousand

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Speaker 1: pounds of orange juice to buy a house today two

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Speaker 1: hundred and eighty thousand pounds to buy a house. Right,

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Speaker 1: so priced in orange juice, houses have become expensive. So

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Speaker 1: my recommendation is that everybody dilute their orange juice with

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Speaker 1: champagne or vodka. Ok. Well, Also, what it does illustrates

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Speaker 1: that what you use as your store of value and

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Speaker 1: your unit of account matters. It does matter, absolutely matters,

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Speaker 1: absolutely matters. So uh, I'll do rice and then we'll

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Speaker 1: move on to the payment side of the equation, just too,

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Speaker 1: in the interest of time. So the reason I pick

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Speaker 1: rice as a very important thing is, you know, rice

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Speaker 1: is the food stock for two thirds of the world.

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Speaker 1: Two thirds of humanity survives on rice. Yeah, they eat

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Speaker 1: other things a little bit too, but rice is their staple. Okay,

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Speaker 1: it's like the base food. And you did a great

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Speaker 1: video by the way, recently on the Great Reset of Food.

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Speaker 1: I really want to recommend that to people. So uh,

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Speaker 1: nineteen seventy, if you wanted to buy the median price house,

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Speaker 1: it would take you uh, forty two thousand pounds of

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Speaker 1: forty three thousand pounds of rice. Okay. Um, in two

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Speaker 1: thousand it would be thirty one thousand. Today it's only

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Speaker 1: twenty seven thousand, so priced in rice, housing is cheaper, okay.

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Speaker 1: Would say, yeah, yeah, nice, Uh, you know what, Let's

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Speaker 1: not move on too quickly. I want to do SMP. Okay.

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Speaker 1: This is important because the SMP the standard and pours.

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Speaker 1: The SMP five hundred index accounts for seventy two percent

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Speaker 1: of all consumers spending in the country. It's a pretty

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Speaker 1: good measure for how the economy is doing. Um. You know,

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Speaker 1: the SMP five hundred is a large part of the

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Speaker 1: overall economy. So in nineteen seventy, it would cost you

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Speaker 1: two hundred and forty three shares of the SMP index

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Speaker 1: at ninety three dollars to buy the median price house

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Speaker 1: two hundred and forty three shares to buy a house

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Speaker 1: in nineteen seventy. In two thousand, it would cost you

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Speaker 1: a hundred and nineteen shares of the SMP to buy

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Speaker 1: the median price house. But today it only costs you

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Speaker 1: eighty shares of the SMP to buy the median price house.

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Speaker 1: So priced in the SMP, housing is a lot cheaper

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Speaker 1: than in median income. Not so cheap. Okay, uh uh

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Speaker 1: you know how many years do you need to work

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Speaker 1: to buy a house with cash? Right in nineteen seventy

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Speaker 1: you needed to work two point six years. In two thousand,

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Speaker 1: four point one years, Today you have to work four

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Speaker 1: point eight years if you were in the median income

402
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Speaker 1: to buy a house. Now we're going to get to

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Speaker 1: the payment part in a moment. It was in two thousand, Uh,

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Speaker 1: in two thousand, four point one years. Yeah, four point

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Speaker 1: one two point six, four point one four point eight Yeah,

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Speaker 1: going from nineteen seventy to two thousand? What that? What

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Speaker 1: that tells you? The way that I look at that is, um,

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Speaker 1: this is uh the reason why the money is losing

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Speaker 1: values because they keep printing so much of it. And

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Speaker 1: uh and this illustration right here took two and a

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Speaker 1: half years of your life. That's your life. That the

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Speaker 1: most scarce asset in history is your time. All other

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Speaker 1: assets we can get more of if we lose it,

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Speaker 1: but you can't get back your time. So it took

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Speaker 1: two and a half years of your life that you

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Speaker 1: can't get back. To buy that house today, it takes

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Speaker 1: almost five to double. And so what they're doing by

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Speaker 1: the money printer is actually stealing your life. They're still

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Speaker 1: your life absolutely. You know, listen to what Mark just

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Speaker 1: said their folks that the only thing any of us

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Speaker 1: really have is our time. That's it. And what Mark

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Speaker 1: said is right on. You just nailed it, because they

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Speaker 1: are literally by debasing the currency, they are also stealing

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Speaker 1: the years of your life away. So that's why you

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Speaker 1: listen to this show because you want to learn how

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Speaker 1: to how to turn that the other way. You want

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Speaker 1: to learn how to not be affected or maybe even

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Speaker 1: to thrive by aligning your interests with what I call

429
00:24:45,400 --> 00:24:47,960
Speaker 1: the two most powerful entities that have ever existed in

430
00:24:48,080 --> 00:24:51,960
Speaker 1: human history, governments and central banks. And that's what we're

431
00:24:51,960 --> 00:24:55,000
Speaker 1: here to help you do. Okay, So so yeah, it's

432
00:24:55,040 --> 00:24:59,159
Speaker 1: a lot now. Now Forbes, Interestingly, Forbes magazine publishes in

433
00:24:59,440 --> 00:25:02,439
Speaker 1: their own economic index, their own version mark of the

434
00:25:02,600 --> 00:25:06,320
Speaker 1: c p I, the Consumer Price Index, but they call

435
00:25:06,400 --> 00:25:11,879
Speaker 1: it the cost of living very well, so this is

436
00:25:11,920 --> 00:25:15,320
Speaker 1: like the c p I for rich people. Okay. And

437
00:25:15,320 --> 00:25:18,800
Speaker 1: and what's interesting about it is that we also took

438
00:25:18,920 --> 00:25:21,800
Speaker 1: in the Hartman Comparison Index. In the h c I,

439
00:25:22,480 --> 00:25:26,560
Speaker 1: we compared the cost of living very well index to

440
00:25:26,640 --> 00:25:30,880
Speaker 1: house prices, and here's what we found. In nine seventy

441
00:25:31,880 --> 00:25:36,439
Speaker 1: it would take five hundred and eighty one shares of

442
00:25:36,520 --> 00:25:41,199
Speaker 1: this index to buy the median price house. Today it

443
00:25:41,240 --> 00:25:45,560
Speaker 1: only takes five hundred and six shares. So for wealthy people,

444
00:25:45,680 --> 00:25:49,879
Speaker 1: houses have become cheaper, not two thirds cheaper like some

445
00:25:49,920 --> 00:25:52,560
Speaker 1: of the people that held the gold or a bitcoin

446
00:25:52,760 --> 00:25:57,840
Speaker 1: radically cheaper or whatever, oil, etcetera, but still cheaper. Okay,

447
00:25:58,280 --> 00:26:02,399
Speaker 1: in the cost of living very well indexed UM. Now copper, Uh,

448
00:26:02,520 --> 00:26:05,440
Speaker 1: you're going to find some differences there. Copper is a

449
00:26:05,480 --> 00:26:09,439
Speaker 1: super important commodity. They call it dr copper for a reason.

450
00:26:09,960 --> 00:26:15,080
Speaker 1: Um four forty eight thousand pounds of copper to buy

451
00:26:15,119 --> 00:26:17,879
Speaker 1: the house two thousand, two hundred and four thousand pounds

452
00:26:17,880 --> 00:26:21,600
Speaker 1: and two thousand today only eight one tho pounds. So

453
00:26:21,920 --> 00:26:27,320
Speaker 1: from two thousand today basically a generation twenty one years right, um,

454
00:26:27,320 --> 00:26:31,399
Speaker 1: housing has is less than half the price in copper

455
00:26:31,480 --> 00:26:35,760
Speaker 1: than it was then. Okay, so so everything everything but

456
00:26:35,840 --> 00:26:39,560
Speaker 1: o j yeah, yeah, orange juice, orange juice, definitely, yeah,

457
00:26:39,600 --> 00:26:41,720
Speaker 1: not so not so good. Okay, So now let's talk

458
00:26:41,760 --> 00:26:44,200
Speaker 1: about the payment. Okay, we we compare it to a

459
00:26:44,240 --> 00:26:47,040
Speaker 1: whole bunch of other things. Find out more at my

460
00:26:47,119 --> 00:26:49,919
Speaker 1: website Jason Hartman dot com or on my YouTube channel

461
00:26:50,040 --> 00:26:54,040
Speaker 1: or podcast, The Creating Weald Show. But payment, you you

462
00:26:54,160 --> 00:26:56,479
Speaker 1: mentioned that earlier, and I want to get to payment

463
00:26:56,760 --> 00:26:59,879
Speaker 1: because the index considers not only the price of the house,

464
00:27:00,800 --> 00:27:06,520
Speaker 1: but also the typical mortgage payment, and with interest rates,

465
00:27:06,560 --> 00:27:10,000
Speaker 1: like you said, mark being half of what they were. Uh,

466
00:27:10,200 --> 00:27:13,359
Speaker 1: it's really staggering what happens to the payment. So let's

467
00:27:13,400 --> 00:27:18,040
Speaker 1: look at the mortgage payment based in UM the median

468
00:27:18,119 --> 00:27:25,240
Speaker 1: home price, adjusted for inflation, and then priced in bitcoin. Okay, staggering,

469
00:27:25,560 --> 00:27:30,119
Speaker 1: what's happened? So the media mortgage payment was a hundred

470
00:27:30,160 --> 00:27:36,199
Speaker 1: and forty two bucks by two thousand, was today compared

471
00:27:36,240 --> 00:27:40,720
Speaker 1: to two thousand, it's only eleven seventy. But when you

472
00:27:40,800 --> 00:27:45,480
Speaker 1: adjusted for inflation back in was a hundred and forty

473
00:27:45,520 --> 00:27:48,640
Speaker 1: two bucks today it's only one sixty nine. It's not

474
00:27:48,720 --> 00:27:52,760
Speaker 1: that much more expensive adjusted for the official rate of inflation,

475
00:27:52,840 --> 00:27:58,840
Speaker 1: which is fake, which is manipulated. So basically, uh, if

476
00:27:58,880 --> 00:28:02,280
Speaker 1: you put in the real rate of inflation, the house

477
00:28:02,320 --> 00:28:05,960
Speaker 1: payment has become quite a bit cheaper than it was

478
00:28:06,160 --> 00:28:10,399
Speaker 1: in nineteen seventy. Based in bitcoin, it's almost free to

479
00:28:10,520 --> 00:28:16,280
Speaker 1: have a house payment, okay um based in gold though, um.

480
00:28:16,320 --> 00:28:19,000
Speaker 1: To make your payment in gold in nineteen seventy it

481
00:28:19,040 --> 00:28:22,600
Speaker 1: took four point one ounces. In two thousand, it took

482
00:28:22,640 --> 00:28:25,360
Speaker 1: three and a half ounces of gold. Today it only

483
00:28:25,400 --> 00:28:29,480
Speaker 1: takes point seven ounces of gold to pay your mortgage.

484
00:28:30,240 --> 00:28:34,240
Speaker 1: Um in barrels of oil. Nine seventy took forty two

485
00:28:34,240 --> 00:28:36,840
Speaker 1: barrels of oil to pay the house payment. In two

486
00:28:36,880 --> 00:28:41,640
Speaker 1: thousand thirty six barrels, and today only sixteen barrels a

487
00:28:41,680 --> 00:28:45,560
Speaker 1: month to live in that house for your mortgage payment. Okay,

488
00:28:45,720 --> 00:28:48,640
Speaker 1: orange juice, it's gotten a little more expensive. It's not

489
00:28:48,720 --> 00:28:53,040
Speaker 1: the most expensive. It was nine D forty four pounds

490
00:28:53,040 --> 00:28:57,400
Speaker 1: of orange juice per month today, uh, three D nineteen

491
00:28:57,400 --> 00:29:00,920
Speaker 1: in nineteen seventy, but in two thousand twelve hundred barrels

492
00:29:01,000 --> 00:29:04,560
Speaker 1: or not barrels pounds, So it's a little cheaper than

493
00:29:04,560 --> 00:29:08,239
Speaker 1: it was in two thousand. Yeah, it's worth yea. How

494
00:29:08,240 --> 00:29:12,480
Speaker 1: about shares of the SMP. Okay, if you want to

495
00:29:12,480 --> 00:29:14,920
Speaker 1: pay your house payment, you could cash in one and

496
00:29:14,960 --> 00:29:17,960
Speaker 1: a half shares of the SMP converted to dollars pay

497
00:29:17,960 --> 00:29:21,720
Speaker 1: your mortgage in two thousand, if you did that, it

498
00:29:21,760 --> 00:29:25,640
Speaker 1: would only take point seven less than half to pay

499
00:29:25,680 --> 00:29:29,720
Speaker 1: your mortgage payment. Today it only takes point three. So

500
00:29:29,920 --> 00:29:34,120
Speaker 1: priced in the SMP or mortgage payment is dramatically cheaper.

501
00:29:34,600 --> 00:29:38,000
Speaker 1: Dramatically cheaper in a bunch of things. Okay, how about

502
00:29:38,160 --> 00:29:42,640
Speaker 1: hours worked at the average wage in nineteen seventy you

503
00:29:42,640 --> 00:29:47,080
Speaker 1: you talk mark about stealing your time in forty one

504
00:29:47,160 --> 00:29:51,880
Speaker 1: hours at the average wage to pay your mortgage in

505
00:29:51,920 --> 00:29:55,280
Speaker 1: two thousand, it took sixty nine hours. Today it only

506
00:29:55,320 --> 00:29:59,320
Speaker 1: takes forty six hours. So, you know, cheaper than it

507
00:29:59,400 --> 00:30:01,680
Speaker 1: was twenty one years ago, a little more expensive than

508
00:30:01,720 --> 00:30:06,000
Speaker 1: it was fifty one years ago. UM tuition, we do

509
00:30:06,080 --> 00:30:09,800
Speaker 1: it indexed in tuition, college tuition, UM, a whole bunch

510
00:30:09,800 --> 00:30:14,480
Speaker 1: of other things. But the bottom line is, housing overall

511
00:30:14,800 --> 00:30:19,920
Speaker 1: is cheaper in almost anything you compare it to today,

512
00:30:20,880 --> 00:30:23,640
Speaker 1: both on a price of the house basis, but even

513
00:30:23,680 --> 00:30:28,560
Speaker 1: more so on a monthly payment basis, is getting cheaper.

514
00:30:28,720 --> 00:30:33,920
Speaker 1: And that's why I say we've got a few good

515
00:30:34,040 --> 00:30:36,600
Speaker 1: years ahead of us probably in the housing market. Now.

516
00:30:36,840 --> 00:30:39,600
Speaker 1: I do want to make the disclaimer that the index

517
00:30:39,680 --> 00:30:43,360
Speaker 1: is a comparison index. It's called the Heartman comparison Index.

518
00:30:43,680 --> 00:30:49,120
Speaker 1: It compares things. It doesn't consider other things like foreclosure, moratoriums,

519
00:30:49,720 --> 00:30:54,160
Speaker 1: in ventory levels, all of that stuff. But I will say, uh,

520
00:30:54,400 --> 00:30:56,640
Speaker 1: a lot of data is in the price of things.

521
00:30:57,360 --> 00:31:01,720
Speaker 1: The price of anything offers a ton of data. Rice

522
00:31:01,840 --> 00:31:05,560
Speaker 1: price is data prices communicating the prices. This is the

523
00:31:05,600 --> 00:31:09,720
Speaker 1: signal that communicates everything. And so um, that's of course

524
00:31:09,760 --> 00:31:12,360
Speaker 1: that's what it is. Yeah. M curious though, because um,

525
00:31:14,480 --> 00:31:17,400
Speaker 1: George George says, uh, you know, is is it expensive

526
00:31:17,480 --> 00:31:21,680
Speaker 1: or is it cheap? Um? But that doesn't tell everything, right, So, uh,

527
00:31:21,920 --> 00:31:25,120
Speaker 1: just because homes maybe aren't as expensive on a monthly

528
00:31:25,120 --> 00:31:27,640
Speaker 1: basis or comparatively as they were in the past doesn't

529
00:31:27,680 --> 00:31:30,320
Speaker 1: necessarily mean that they won't cry in And just because

530
00:31:30,600 --> 00:31:32,160
Speaker 1: or because they're lower doesn't mean they can keep going

531
00:31:32,240 --> 00:31:35,600
Speaker 1: up either, right right, So right now, we're doing the

532
00:31:35,680 --> 00:31:39,800
Speaker 1: index on a quarterly basis. We're putting in new numbers

533
00:31:39,880 --> 00:31:42,480
Speaker 1: every quarter, okay, and we want to get it to

534
00:31:42,560 --> 00:31:44,760
Speaker 1: a monthly basis. But hey, this is a new thing,

535
00:31:44,880 --> 00:31:48,600
Speaker 1: and we're staffing up there okay for the index. Uh

536
00:31:48,720 --> 00:31:52,000
Speaker 1: and uh, and so you know, just keep following the index,

537
00:31:52,600 --> 00:31:57,440
Speaker 1: and when when the index says housing is expensive compared

538
00:31:57,480 --> 00:32:00,520
Speaker 1: to all these other things, then you know that is

539
00:32:00,560 --> 00:32:03,680
Speaker 1: a dangerous point. And we will get there, especially if

540
00:32:03,720 --> 00:32:07,120
Speaker 1: these dysfunctionally low interest rates continue, we will good to

541
00:32:07,200 --> 00:32:11,920
Speaker 1: that point. So we're just not there yet. Hey, sorry

542
00:32:11,960 --> 00:32:14,160
Speaker 1: to interrupt this video just one more time. I'm not

543
00:32:14,360 --> 00:32:17,040
Speaker 1: running Google ads, so it's actually way less interruption than

544
00:32:17,080 --> 00:32:19,080
Speaker 1: I normally would have on a video. UM, and that's

545
00:32:19,080 --> 00:32:22,640
Speaker 1: because it's sponsored by block five. UM. They are opening

546
00:32:22,760 --> 00:32:25,560
Speaker 1: up the world of bitcoin and financial products offering to

547
00:32:25,640 --> 00:32:29,000
Speaker 1: pay you interest on your bitcoin. UM better than own

548
00:32:29,000 --> 00:32:30,720
Speaker 1: in a rental property that you have to manage and

549
00:32:30,800 --> 00:32:32,720
Speaker 1: control and have the risks. You can just earn interest

550
00:32:32,760 --> 00:32:35,320
Speaker 1: on it, or you can leverage against it. Now, I

551
00:32:35,520 --> 00:32:39,040
Speaker 1: plan to hold my bitcoin forever and literally never sell

552
00:32:39,240 --> 00:32:41,160
Speaker 1: my bitcoin. So how do you do that? Well, if

553
00:32:41,200 --> 00:32:43,240
Speaker 1: I need money, I don't want to sell that bitcoin.

554
00:32:43,240 --> 00:32:45,360
Speaker 1: I'm gonna pay tax on it, all right, I'm gonna

555
00:32:45,400 --> 00:32:47,640
Speaker 1: end up with less and I don't have the bitcoin anymore.

556
00:32:47,760 --> 00:32:49,760
Speaker 1: So a better way to do it is to borrow

557
00:32:49,960 --> 00:32:52,840
Speaker 1: against the bitcoin. So I've put all my money into bitcoin.

558
00:32:53,080 --> 00:32:54,720
Speaker 1: If I want to buy a car, or I want

559
00:32:54,760 --> 00:32:57,320
Speaker 1: to buy a house, I can borrow against it at

560
00:32:57,520 --> 00:33:00,479
Speaker 1: very very low competitive rates. Get my house, get my car,

561
00:33:00,520 --> 00:33:03,320
Speaker 1: or whatever that may be, and get to keep the bitcoin.

562
00:33:03,400 --> 00:33:05,880
Speaker 1: I've done a whole video on this. You can find it.

563
00:33:05,880 --> 00:33:07,840
Speaker 1: I'll link it down in the description below, how to

564
00:33:08,000 --> 00:33:10,360
Speaker 1: retire off a bitcoin without paying taxes, and you can

565
00:33:10,400 --> 00:33:12,880
Speaker 1: do that with block five services. I'll link to the

566
00:33:12,960 --> 00:33:14,560
Speaker 1: video down below. I'm also going to put a link

567
00:33:14,600 --> 00:33:16,320
Speaker 1: to block Fight. If you choose to click on that

568
00:33:16,360 --> 00:33:17,960
Speaker 1: link to check them out. You can earn up to

569
00:33:17,960 --> 00:33:20,840
Speaker 1: two fifty dollars in free bitcoin just for using that link.

570
00:33:21,160 --> 00:33:22,680
Speaker 1: And that's it. Let's go ahead and get back to

571
00:33:22,840 --> 00:33:26,800
Speaker 1: the interview. Yeah, so, um, it looks at the price things,

572
00:33:26,880 --> 00:33:30,280
Speaker 1: and UM, I like that because it's most basic. Most

573
00:33:30,360 --> 00:33:32,240
Speaker 1: people are like, oh, real estate, it's way too expensive.

574
00:33:32,240 --> 00:33:36,000
Speaker 1: It's got a crash any moment um. So it gets

575
00:33:36,000 --> 00:33:37,640
Speaker 1: a different perspective on the price. Like I said, I

576
00:33:37,720 --> 00:33:39,840
Speaker 1: keep pounding the table on this. Purchasing power brings you

577
00:33:39,920 --> 00:33:42,040
Speaker 1: back to that, which so it's perfect for that. I

578
00:33:42,160 --> 00:33:44,080
Speaker 1: was I was taking notes and writing down a bunch

579
00:33:44,080 --> 00:33:46,480
Speaker 1: of those amounts because I'm gonna use some of that data. Um.

580
00:33:47,720 --> 00:33:49,800
Speaker 1: But um, like I said, just because price is cheap

581
00:33:49,880 --> 00:33:51,520
Speaker 1: doesn't mean it's gonna get going up. But just because

582
00:33:51,520 --> 00:33:55,640
Speaker 1: it's expensive doesn't mean. Uh, we have the wild card,

583
00:33:55,720 --> 00:33:58,600
Speaker 1: as I call it, These are the banksters, and we

584
00:33:58,680 --> 00:34:00,720
Speaker 1: don't know what the banksters are gonna do. So for example,

585
00:34:00,880 --> 00:34:03,400
Speaker 1: the FED and the government has done anything other power

586
00:34:03,480 --> 00:34:05,840
Speaker 1: to prop the market up. Um. You know, over the

587
00:34:05,920 --> 00:34:08,480
Speaker 1: last year they've spent trillions of dollars to do that,

588
00:34:08,920 --> 00:34:10,840
Speaker 1: and a lot of it has been done in the

589
00:34:10,920 --> 00:34:14,840
Speaker 1: mortgage industry specifically, um, you know, buying mortgage backed securities

590
00:34:14,880 --> 00:34:18,120
Speaker 1: and whatnot. And uh. And then even with the you know,

591
00:34:18,239 --> 00:34:22,960
Speaker 1: rear rams and eviction moratorium, they're helping for payments. Um.

592
00:34:23,080 --> 00:34:26,000
Speaker 1: So it seems like that's a big wild card and

593
00:34:26,080 --> 00:34:28,759
Speaker 1: we don't know what in their head will they do?

594
00:34:28,960 --> 00:34:31,800
Speaker 1: You will they nah? So how does that? How do

595
00:34:31,840 --> 00:34:35,000
Speaker 1: you factor that in? I am really glad you mentioned

596
00:34:35,080 --> 00:34:39,080
Speaker 1: that what we are adding to the Heartman Comparison Index

597
00:34:39,800 --> 00:34:45,080
Speaker 1: is a mortgage sensitivity component, a mortgage interest rate sensitivity component.

598
00:34:45,480 --> 00:34:49,799
Speaker 1: Because it's a good question what would happen if they

599
00:34:50,000 --> 00:34:53,600
Speaker 1: FED and the government and the banksters. Uh, you know,

600
00:34:53,800 --> 00:34:57,840
Speaker 1: this collusion between these entities, which is so secretive and

601
00:34:58,440 --> 00:35:02,279
Speaker 1: just ridiculous frankly. Uh, you know what would happen if

602
00:35:02,360 --> 00:35:07,640
Speaker 1: they tighten the money supply and and interest rates go up? Well,

603
00:35:07,800 --> 00:35:10,760
Speaker 1: the ft doesn't directly control mortgage rates, but they certainly

604
00:35:10,840 --> 00:35:14,000
Speaker 1: influence them in a huge way. And so you know

605
00:35:14,080 --> 00:35:16,759
Speaker 1: if rates went up I say one percent, which is

606
00:35:16,840 --> 00:35:20,920
Speaker 1: really a thirty three percent increase depending on the exact rate,

607
00:35:21,719 --> 00:35:26,160
Speaker 1: very approximate there um. Uh, you know, then it would

608
00:35:26,280 --> 00:35:30,759
Speaker 1: it would certainly make housing much less affordable. So you're

609
00:35:30,800 --> 00:35:36,520
Speaker 1: absolutely right. But when that happens, the likelihood is all

610
00:35:36,640 --> 00:35:39,360
Speaker 1: of the other compared to what items in the h

611
00:35:39,480 --> 00:35:43,560
Speaker 1: C I will also react to that, right, Certainly, the

612
00:35:43,760 --> 00:35:47,400
Speaker 1: S and P will, gold prices will uh, copper prices,

613
00:35:47,480 --> 00:35:51,400
Speaker 1: everything reacts, right. But here's the problem, and here's why

614
00:35:51,480 --> 00:35:53,920
Speaker 1: it's so hard to make predictions right, And here's why

615
00:35:54,000 --> 00:35:56,560
Speaker 1: so many people who claim to be good at making

616
00:35:56,640 --> 00:36:00,600
Speaker 1: predictions fall on their sword at some point and right

617
00:36:01,080 --> 00:36:04,680
Speaker 1: is because these things don't act in lockstep. There's a

618
00:36:04,840 --> 00:36:09,320
Speaker 1: lag time between these reactions of different items in the economy.

619
00:36:09,840 --> 00:36:13,240
Speaker 1: And so, uh, you know what you can be pretty

620
00:36:13,320 --> 00:36:16,880
Speaker 1: safe with, I think is looking at big macro trends,

621
00:36:17,520 --> 00:36:19,360
Speaker 1: and that's that's what I like looking at, and I

622
00:36:19,360 --> 00:36:22,040
Speaker 1: think it's where you like looking at too. Uh. If

623
00:36:22,080 --> 00:36:25,320
Speaker 1: you're trying to make predictions and be a day trader,

624
00:36:25,520 --> 00:36:33,239
Speaker 1: you're probably gonna get in trouble. Okay. So, um, I'm curious. Um, well,

625
00:36:34,000 --> 00:36:35,960
Speaker 1: I want to see I want to ask you. I

626
00:36:36,000 --> 00:36:38,200
Speaker 1: want to nail you down as to what you see

627
00:36:38,440 --> 00:36:41,520
Speaker 1: in the near and long term future. But before we

628
00:36:41,640 --> 00:36:44,040
Speaker 1: jump into that, for everybody watching, make sure you stay

629
00:36:44,080 --> 00:36:46,680
Speaker 1: to that because I'm gonna ask Jason. This is a causation. Um,

630
00:36:46,760 --> 00:36:48,799
Speaker 1: As I was walking down the beach trail last night

631
00:36:48,840 --> 00:36:51,439
Speaker 1: with my wife here in southern California. I mean homes

632
00:36:51,480 --> 00:36:54,840
Speaker 1: have doubled. I mean they're up a hundred percent in

633
00:36:55,120 --> 00:36:57,520
Speaker 1: in in a year and a half. I mean it's insanity.

634
00:36:57,880 --> 00:36:59,719
Speaker 1: Then we're having this conversation. So I want to nail

635
00:36:59,719 --> 00:37:01,040
Speaker 1: you down ask you what you think about that. But

636
00:37:01,080 --> 00:37:03,000
Speaker 1: before we do, I'd like to ask you about two

637
00:37:03,040 --> 00:37:06,839
Speaker 1: other triggers that I'm looking at. Um. So one is, um,

638
00:37:07,600 --> 00:37:09,360
Speaker 1: there's been big news. I did a video on this

639
00:37:09,800 --> 00:37:14,080
Speaker 1: about black Rock and the hedge funds and Wall Street

640
00:37:14,280 --> 00:37:18,280
Speaker 1: buying up single family homes. Now they are basically taking

641
00:37:19,040 --> 00:37:21,880
Speaker 1: near free money from the money printer getting their buddies

642
00:37:21,920 --> 00:37:25,040
Speaker 1: at the FED. They're getting it for almost free, and

643
00:37:25,160 --> 00:37:28,440
Speaker 1: they're buying up entire tracks of single family homes the

644
00:37:28,480 --> 00:37:32,480
Speaker 1: bread and butter as US real estate, and and they're

645
00:37:32,600 --> 00:37:36,080
Speaker 1: over pain by a large amount of money because they're

646
00:37:36,120 --> 00:37:38,319
Speaker 1: looking at different numbers than we are. You can get

647
00:37:38,400 --> 00:37:40,640
Speaker 1: free money and make two or three percent. Heck, they're

648
00:37:40,680 --> 00:37:43,960
Speaker 1: fine with that's a little overpay um, and that's a

649
00:37:44,120 --> 00:37:46,600
Speaker 1: big trend, and it doesn't continue to be slowing down.

650
00:37:46,719 --> 00:37:52,040
Speaker 1: How does that piece fit into the narrative? I guess, um, Yeah,

651
00:37:52,120 --> 00:37:54,640
Speaker 1: it's a good question. I think it's bullish for real

652
00:37:54,760 --> 00:37:59,319
Speaker 1: estate prices and bullish for real estate rents because these

653
00:37:59,400 --> 00:38:03,600
Speaker 1: institute have more data than we do and they obviously

654
00:38:04,520 --> 00:38:09,120
Speaker 1: are still doing what they do right and and because

655
00:38:09,200 --> 00:38:12,600
Speaker 1: of that, I think I think it's bullish. So I

656
00:38:13,480 --> 00:38:17,640
Speaker 1: mean meaning in the investment world, we'd call that the

657
00:38:17,719 --> 00:38:20,160
Speaker 1: smart meaning where the dumb money. So then meaning if

658
00:38:20,200 --> 00:38:22,359
Speaker 1: the smart money is putting their money there, then maybe

659
00:38:22,560 --> 00:38:26,080
Speaker 1: we think about as well. Right, Yeah, I think it's

660
00:38:26,080 --> 00:38:28,399
Speaker 1: a good indicator. Yeah, I do, even though they're even

661
00:38:28,440 --> 00:38:32,160
Speaker 1: though they're potentially over paying because their number metrics are

662
00:38:32,200 --> 00:38:34,960
Speaker 1: way different than ours. Fair enough, that's a that's a

663
00:38:35,080 --> 00:38:38,920
Speaker 1: very good point. Um, yeah, I think it's okay. And

664
00:38:39,120 --> 00:38:42,120
Speaker 1: here's the thing. You know, a lot of people I

665
00:38:42,239 --> 00:38:45,320
Speaker 1: got asked a question similar to yours just recently on

666
00:38:45,440 --> 00:38:49,000
Speaker 1: another podcast I was doing, and um, you know, the

667
00:38:50,480 --> 00:38:52,680
Speaker 1: at the end of the day, we have to remember, Um,

668
00:38:53,640 --> 00:38:58,120
Speaker 1: the number of houses and the amount of housing demand

669
00:38:59,520 --> 00:39:02,920
Speaker 1: isn't changing that much. Right, There's still a shortage of

670
00:39:02,960 --> 00:39:06,000
Speaker 1: about five point five million houses according to n a

671
00:39:06,200 --> 00:39:09,640
Speaker 1: R National Association of Realtors that has a very big

672
00:39:09,719 --> 00:39:14,400
Speaker 1: statistical uh you know research department and um, and so

673
00:39:14,520 --> 00:39:17,160
Speaker 1: we still have that same shortage. It doesn't matter if

674
00:39:17,200 --> 00:39:20,000
Speaker 1: their rental homes or for sale homes. The fact is

675
00:39:20,080 --> 00:39:22,520
Speaker 1: we have people that need a place to live. Right,

676
00:39:22,760 --> 00:39:24,680
Speaker 1: That's what happens at the end of the day. Now,

677
00:39:24,880 --> 00:39:26,560
Speaker 1: I do want to mention though, and this is a

678
00:39:26,800 --> 00:39:29,719
Speaker 1: far out thing, so no one needs to worry about

679
00:39:29,719 --> 00:39:33,880
Speaker 1: it today. But uh, you know, in thirty to forty years,

680
00:39:34,200 --> 00:39:37,479
Speaker 1: this dynamic looks like it will change quite dramatically because

681
00:39:37,520 --> 00:39:41,600
Speaker 1: the birth rate is declining. And um, the one thing

682
00:39:41,760 --> 00:39:44,520
Speaker 1: that has to happen for all of this real estate

683
00:39:44,600 --> 00:39:47,560
Speaker 1: investing to work is you have to have demand, you

684
00:39:47,640 --> 00:39:49,680
Speaker 1: have to have people, you have to have population growth

685
00:39:49,800 --> 00:39:52,919
Speaker 1: or at least stable population. And uh, and so that's

686
00:39:53,040 --> 00:39:56,320
Speaker 1: that's super important. And you have to not have a

687
00:39:56,520 --> 00:40:02,480
Speaker 1: disruptive construction technology that supplies a lot more housing to

688
00:40:02,600 --> 00:40:06,520
Speaker 1: the market. And so you know, I've done deep, deep

689
00:40:06,640 --> 00:40:10,720
Speaker 1: research on my shows about three D printed homes, about

690
00:40:10,800 --> 00:40:14,759
Speaker 1: manufactured homes, and none of these things. Forget about the

691
00:40:14,880 --> 00:40:18,720
Speaker 1: hyper earring, it's bs. It's simply not true. I've hired

692
00:40:18,719 --> 00:40:21,080
Speaker 1: a consultant to look at it and all sorts of stuff,

693
00:40:21,480 --> 00:40:25,120
Speaker 1: and um, none of these things are disrupting housing construction

694
00:40:25,239 --> 00:40:30,480
Speaker 1: anytime soon. It's a low tech process, and it requires materials.

695
00:40:30,680 --> 00:40:33,799
Speaker 1: Even if they're three D printed, it's still concrete, right,

696
00:40:33,880 --> 00:40:37,800
Speaker 1: It's still materials. And uh, there are land use restrictions

697
00:40:37,840 --> 00:40:40,759
Speaker 1: and all kinds of problems with buildings. So I'm not

698
00:40:41,080 --> 00:40:43,840
Speaker 1: I'm not worried about too much supply anytime soon, and

699
00:40:43,920 --> 00:40:48,600
Speaker 1: I'm not worried about declining demand anytime soon. Okay, Um, now, um.

700
00:40:49,040 --> 00:40:51,399
Speaker 1: On the new question I had was our good friend

701
00:40:51,440 --> 00:40:54,319
Speaker 1: George Gammon has been talking quite a bit about what's

702
00:40:54,320 --> 00:40:56,800
Speaker 1: going on the report market, and now the reverse repot

703
00:40:56,840 --> 00:41:00,640
Speaker 1: market and without getting deep into that. Basically, the banks

704
00:41:00,680 --> 00:41:03,040
Speaker 1: were running out of money back in and so the

705
00:41:03,080 --> 00:41:06,680
Speaker 1: FED was giving them liquidity. Now it's verse repost, so

706
00:41:06,719 --> 00:41:09,799
Speaker 1: the banks are putting money back to the Fed. Um.

707
00:41:10,320 --> 00:41:12,680
Speaker 1: This seems to be a signal of a big problem.

708
00:41:12,760 --> 00:41:14,360
Speaker 1: The banks have all this money, they don't want to

709
00:41:14,440 --> 00:41:17,200
Speaker 1: lend it out, um, and now they're putting it back

710
00:41:17,200 --> 00:41:19,239
Speaker 1: to the Then on top of that, I want to

711
00:41:19,280 --> 00:41:22,239
Speaker 1: dive super and deep into that. But yesterday big news

712
00:41:22,360 --> 00:41:26,000
Speaker 1: came across the news world of Wells Fargo wanting to

713
00:41:26,120 --> 00:41:29,719
Speaker 1: shut down lines of credit, lines of credit, equity, lines

714
00:41:29,760 --> 00:41:32,640
Speaker 1: of credit. Um, what do you think about that? Is

715
00:41:32,680 --> 00:41:34,520
Speaker 1: that like a warning sign? Because after the two thou

716
00:41:34,760 --> 00:41:37,880
Speaker 1: eight crash, everybody's credit lines got pulled right, it was

717
00:41:38,000 --> 00:41:39,759
Speaker 1: it was it was it was too I mean, the

718
00:41:39,800 --> 00:41:41,640
Speaker 1: liquidity dried up, it was too risky for them to

719
00:41:41,719 --> 00:41:44,120
Speaker 1: lend money. And now it's almost as if they're pre

720
00:41:44,239 --> 00:41:47,480
Speaker 1: emptively doing What do you think, Well, I think that's

721
00:41:47,480 --> 00:41:52,520
Speaker 1: a bearers sign. A credit contraction will definitely uh cause

722
00:41:53,400 --> 00:41:56,960
Speaker 1: demand to level off as the FED tapers, which some

723
00:41:57,200 --> 00:41:59,960
Speaker 1: argue they're about to do, and some argue that it's

724
00:42:00,040 --> 00:42:02,080
Speaker 1: gonna be a couple of years. I don't know. Nobody

725
00:42:02,120 --> 00:42:06,040
Speaker 1: really knows for sure except your own power. Um. Even

726
00:42:06,080 --> 00:42:09,160
Speaker 1: that he doesn't probably. You know, real estate is a

727
00:42:09,280 --> 00:42:13,440
Speaker 1: credit based asset class. If you constrict the supply of credit, uh,

728
00:42:13,600 --> 00:42:17,600
Speaker 1: you're going to constrict the affordability. But remember something, Um,

729
00:42:18,200 --> 00:42:22,440
Speaker 1: that doesn't reduce the population and it doesn't increase the supply.

730
00:42:23,200 --> 00:42:26,400
Speaker 1: So if people can't buy houses, they'll rent them. They

731
00:42:26,400 --> 00:42:29,200
Speaker 1: will be forced to rent them. Right, there's only two choices,

732
00:42:29,320 --> 00:42:32,360
Speaker 1: all three I rent or be homeless. Right. Uh, so

733
00:42:33,360 --> 00:42:38,000
Speaker 1: that options in to um. But you know, between that

734
00:42:38,280 --> 00:42:40,000
Speaker 1: between drying up a little bit of the credit like

735
00:42:40,040 --> 00:42:42,440
Speaker 1: with Wells Fargo, that's maybe a canary in the coal

736
00:42:42,520 --> 00:42:45,520
Speaker 1: mine maybe. Uh. And then we've seen interest rates start

737
00:42:45,560 --> 00:42:49,040
Speaker 1: picking back up again from their lows as well. So uh,

738
00:42:49,239 --> 00:42:52,040
Speaker 1: the interest rates tick up and the lack of credit

739
00:42:52,600 --> 00:42:54,879
Speaker 1: both do the same thing, which is make it more

740
00:42:54,960 --> 00:42:58,920
Speaker 1: expensive at home. The monthly payment goes up. Um. And

741
00:42:59,000 --> 00:43:01,279
Speaker 1: if the monthly pay that goes up, does that bring

742
00:43:01,360 --> 00:43:04,600
Speaker 1: the price of the home back down? Well, here's what

743
00:43:04,920 --> 00:43:08,280
Speaker 1: really happens. Yes, it does put downward pressure on prices,

744
00:43:08,840 --> 00:43:14,040
Speaker 1: but what people really um, it's just weird to me, Mark,

745
00:43:14,160 --> 00:43:16,759
Speaker 1: and I've you know, over the last twenty years of

746
00:43:16,880 --> 00:43:21,200
Speaker 1: having discussions about this exact thing. People will say, well,

747
00:43:21,560 --> 00:43:26,680
Speaker 1: you know, if incomes are stagnant and prices are rising, um,

748
00:43:26,840 --> 00:43:29,120
Speaker 1: how are tenants going to be able to afford to

749
00:43:29,239 --> 00:43:31,800
Speaker 1: rent my house from me? Or you know, if the

750
00:43:31,880 --> 00:43:36,040
Speaker 1: economy is bad, unemployments high, whatever, right, whatever happens, The

751
00:43:36,160 --> 00:43:40,719
Speaker 1: point is what gives in the equation mostly is the

752
00:43:40,880 --> 00:43:46,440
Speaker 1: standard of living. People are forced to move down or

753
00:43:46,640 --> 00:43:50,000
Speaker 1: not move up in the first place, right, So uh,

754
00:43:50,280 --> 00:43:52,719
Speaker 1: you know, if if you talk to one of your

755
00:43:52,760 --> 00:43:56,160
Speaker 1: tenants today and then you talk to that same tenant

756
00:43:56,360 --> 00:43:59,880
Speaker 1: five years from now, if if these things happen, right,

757
00:44:00,480 --> 00:44:02,960
Speaker 1: they all say things like, well, you know, we used

758
00:44:02,960 --> 00:44:06,239
Speaker 1: to live in a square foot house in a better

759
00:44:06,320 --> 00:44:09,000
Speaker 1: neighborhood and now we live in a twelve hundred square

760
00:44:09,040 --> 00:44:12,719
Speaker 1: foot house in an inferior neighborhood with worst schools. That

761
00:44:12,960 --> 00:44:17,839
Speaker 1: what gives is the standard of living. But economists don't

762
00:44:17,880 --> 00:44:21,600
Speaker 1: follow this very well. They follow oh, yeah, the rate

763
00:44:21,640 --> 00:44:25,600
Speaker 1: of inflation through the highly manipulated bogus CPI, the consumer

764
00:44:25,640 --> 00:44:29,080
Speaker 1: price in next, sure, but they don't follow people, right,

765
00:44:29,200 --> 00:44:33,320
Speaker 1: and they don't say this exact couple that had this

766
00:44:33,600 --> 00:44:36,960
Speaker 1: life five years ago has this life today, right, They

767
00:44:37,000 --> 00:44:39,400
Speaker 1: don't do that, I mean not very much. Ats not

768
00:44:39,480 --> 00:44:41,920
Speaker 1: in any real and that's ah, that's such an important

769
00:44:41,920 --> 00:44:45,719
Speaker 1: point that you hit on because again as real estate investors,

770
00:44:45,880 --> 00:44:48,359
Speaker 1: we talked to as I mentioned about the Bread and Butter, right,

771
00:44:48,400 --> 00:44:51,440
Speaker 1: So that's an entry level three bedroom to bath home.

772
00:44:52,000 --> 00:44:54,160
Speaker 1: And the reason why we've always liked those, at least

773
00:44:54,160 --> 00:44:57,200
Speaker 1: speaking for myself, is because to your point, it's the

774
00:44:57,480 --> 00:45:00,720
Speaker 1: entry level that people come to and if people fall down,

775
00:45:00,960 --> 00:45:03,200
Speaker 1: they're gonna fall down to that level. And also people

776
00:45:03,280 --> 00:45:05,839
Speaker 1: coming up are to that level. And so that's why

777
00:45:05,920 --> 00:45:08,000
Speaker 1: the entry level is great because you catch them either

778
00:45:08,080 --> 00:45:11,839
Speaker 1: way moving down the economic ladder and others moving up.

779
00:45:12,440 --> 00:45:15,480
Speaker 1: But that's exactly where black Rock and the and the

780
00:45:15,640 --> 00:45:18,880
Speaker 1: Wall Street hedge funds are targeting. Is entry level three bedroom,

781
00:45:18,920 --> 00:45:21,319
Speaker 1: two bass as well. Sure, but it's also where all

782
00:45:21,360 --> 00:45:23,760
Speaker 1: of our investors target as well, and where you target

783
00:45:23,880 --> 00:45:26,400
Speaker 1: so you know we all do that. But but I

784
00:45:26,440 --> 00:45:29,279
Speaker 1: guess just just reinforcing the point of maybe it's a

785
00:45:29,320 --> 00:45:32,480
Speaker 1: bullet signal, right, they know what they're doing kind of thing, right, um,

786
00:45:32,920 --> 00:45:35,360
Speaker 1: because I think you know one thing and again, so

787
00:45:35,440 --> 00:45:37,480
Speaker 1: much of this is unknown because these banksters, you know,

788
00:45:37,560 --> 00:45:39,640
Speaker 1: we don't know what's in their head. But um, I

789
00:45:39,880 --> 00:45:44,560
Speaker 1: tend to think that they didn't just create eight trillion

790
00:45:44,600 --> 00:45:49,440
Speaker 1: dollars in the last four months to stop now, right,

791
00:45:49,719 --> 00:45:51,480
Speaker 1: Like they're not going to just do that just to

792
00:45:51,640 --> 00:45:54,879
Speaker 1: stop now? Why would they not keep it going? You're

793
00:45:55,160 --> 00:45:58,000
Speaker 1: absolutely right, look at the you know, it's amazing to me, Mark,

794
00:45:58,080 --> 00:46:00,440
Speaker 1: And I'm sure you have the same thought I do. Right,

795
00:46:00,680 --> 00:46:04,680
Speaker 1: every time the G seven meets or the G twenty meets,

796
00:46:04,760 --> 00:46:07,640
Speaker 1: you know, the big industrialized countries, right, every time there's

797
00:46:07,680 --> 00:46:10,640
Speaker 1: a meeting in Jackson Hole, Wyoming where the FED has

798
00:46:10,680 --> 00:46:13,560
Speaker 1: their annual meeting, or or they go to Davos, Switzerland,

799
00:46:13,680 --> 00:46:18,640
Speaker 1: and you know, the the creepy World Economic Forum. Right, basically,

800
00:46:18,760 --> 00:46:21,799
Speaker 1: they're only answer, they can call it whatever they want.

801
00:46:21,880 --> 00:46:26,200
Speaker 1: They've got all these complicated names, but they're only answer

802
00:46:26,640 --> 00:46:31,800
Speaker 1: to any of these problems is create more currency units,

803
00:46:32,600 --> 00:46:36,480
Speaker 1: print money. It's it, that's it. That's all they got. Okay. Yeah,

804
00:46:36,520 --> 00:46:39,680
Speaker 1: they've got these little things and dials they turn and

805
00:46:40,400 --> 00:46:42,399
Speaker 1: but that's basically at the end of the day, it's

806
00:46:42,400 --> 00:46:45,480
Speaker 1: all just money printing, okay. And they're not going to

807
00:46:45,640 --> 00:46:49,799
Speaker 1: stop because no politician or FED chair or central bank

808
00:46:49,880 --> 00:46:52,160
Speaker 1: chair of any other central bank, the European Central Bank,

809
00:46:52,280 --> 00:46:55,400
Speaker 1: Bank of Japan, whatever, they don't want to make people

810
00:46:55,520 --> 00:46:59,399
Speaker 1: take the tough medicine during their tenure. The only guy

811
00:46:59,719 --> 00:47:03,000
Speaker 1: that ever did that was the late Paul Vulker, who

812
00:47:03,080 --> 00:47:06,080
Speaker 1: was FED share in the early eighties. Uh. He he

813
00:47:06,320 --> 00:47:10,640
Speaker 1: did do that. He tightened the money supply, interest rates

814
00:47:10,719 --> 00:47:15,000
Speaker 1: went up through the roof. The economy just stalled like

815
00:47:15,239 --> 00:47:18,680
Speaker 1: a car crashing into a wall. And it was tough,

816
00:47:19,080 --> 00:47:21,799
Speaker 1: but it broke the back of inflation. And I say,

817
00:47:21,920 --> 00:47:24,760
Speaker 1: there is no way that's happening in today's world. People

818
00:47:24,800 --> 00:47:27,239
Speaker 1: are just too wimpy. They're not willing to do it.

819
00:47:27,520 --> 00:47:31,760
Speaker 1: It's never gonna happen. So then um so then looking

820
00:47:31,800 --> 00:47:35,480
Speaker 1: into the future, so then it's like, um, if the

821
00:47:35,600 --> 00:47:39,840
Speaker 1: FED stops, which as we discussed, is probably unlikely, but

822
00:47:39,960 --> 00:47:42,399
Speaker 1: if the FED were to stop with their intervention buying

823
00:47:42,400 --> 00:47:47,440
Speaker 1: mortgage backed securities, propping up banks, etcetera, then um, potentially

824
00:47:47,480 --> 00:47:49,319
Speaker 1: we could see the real estate market turn around and crash.

825
00:47:49,400 --> 00:47:52,520
Speaker 1: From here, however, if they continue down the path they've

826
00:47:52,560 --> 00:47:54,399
Speaker 1: been going down, to your point, when the whole world

827
00:47:54,440 --> 00:47:56,839
Speaker 1: looks like a hammer or a nail. Or when all

828
00:47:56,880 --> 00:47:58,000
Speaker 1: you have is a hammer, the whole world looks like

829
00:47:58,000 --> 00:48:01,879
Speaker 1: a nail. Um, and so UM, if they go till

830
00:48:01,960 --> 00:48:04,759
Speaker 1: they blow, which is kind of what I'm thinking, we

831
00:48:04,840 --> 00:48:07,719
Speaker 1: could potentially see things go way higher and further than

832
00:48:07,800 --> 00:48:11,680
Speaker 1: we might imagine. I think you're right. So if I

833
00:48:11,920 --> 00:48:14,759
Speaker 1: was thinking about buying a peace real estate in the

834
00:48:14,880 --> 00:48:17,759
Speaker 1: United States, UM, I would first divide it into two

835
00:48:17,840 --> 00:48:22,120
Speaker 1: buckets as an investor or as a homeowner. But let's

836
00:48:22,160 --> 00:48:25,320
Speaker 1: say UM, as an investor, I think the only strategy

837
00:48:25,360 --> 00:48:26,880
Speaker 1: really makes sense is to trying to buy it for

838
00:48:27,000 --> 00:48:29,680
Speaker 1: cash flow. Unfortunately, the amount of cash flow that you

839
00:48:29,680 --> 00:48:33,160
Speaker 1: can get today has gotten greatly, partly because of Black

840
00:48:33,239 --> 00:48:35,399
Speaker 1: Rock and Wall Street jumping in there working on rays

841
00:48:35,440 --> 00:48:37,400
Speaker 1: within margins. But let's let's look at it from a

842
00:48:37,480 --> 00:48:40,560
Speaker 1: homeowner perspective. As I said, this is the conversation I

843
00:48:40,680 --> 00:48:42,960
Speaker 1: was having last night. I mean, I'm not kidding, man.

844
00:48:43,080 --> 00:48:45,720
Speaker 1: Here in southern California, prices are up like a hundred

845
00:48:45,800 --> 00:48:48,319
Speaker 1: percent in like a year and a half or two years.

846
00:48:48,400 --> 00:48:50,840
Speaker 1: It's insane. One point eight million dollar homes are not

847
00:48:50,880 --> 00:48:52,400
Speaker 1: going for three and a half million dollars, like just

848
00:48:52,520 --> 00:48:56,239
Speaker 1: like that Um, so is it is? It? Is it

849
00:48:56,360 --> 00:48:59,240
Speaker 1: the top? I mean, would you buy at double the price?

850
00:48:59,840 --> 00:49:01,680
Speaker 1: Or would you wait a couple of years and wait

851
00:49:01,760 --> 00:49:04,600
Speaker 1: for those prices to come back down? Um? Or are

852
00:49:04,640 --> 00:49:06,239
Speaker 1: they going to go till they blow? How do you

853
00:49:06,360 --> 00:49:08,560
Speaker 1: think through something like that? And I know different markets

854
00:49:08,600 --> 00:49:12,120
Speaker 1: are different circle um, you know there, etcetera. But how

855
00:49:12,160 --> 00:49:14,839
Speaker 1: would somebody think through that when they're when they're thinking

856
00:49:14,880 --> 00:49:17,239
Speaker 1: about buying a house for themselves as a family, but

857
00:49:17,400 --> 00:49:19,680
Speaker 1: prices seem to be sky high? Do you wait or

858
00:49:19,719 --> 00:49:21,600
Speaker 1: do you buy? And how do you evaluate that? I

859
00:49:22,080 --> 00:49:26,000
Speaker 1: think in the cyclical markets, meaning the West coast of

860
00:49:26,000 --> 00:49:29,840
Speaker 1: the United States, the expense of Northeastern markets South Florida

861
00:49:30,560 --> 00:49:34,640
Speaker 1: where I live right the if you're in an expensive market,

862
00:49:35,120 --> 00:49:39,560
Speaker 1: I think there's a much greater risk uh two, possibly

863
00:49:39,640 --> 00:49:42,640
Speaker 1: things going the other way. But if you're buying in

864
00:49:42,719 --> 00:49:47,600
Speaker 1: a cheap market where the housing prices are relatively low,

865
00:49:47,840 --> 00:49:50,160
Speaker 1: it's a linear market. You know. If you go to

866
00:49:50,280 --> 00:49:52,960
Speaker 1: Jason Hartman dot com and click on the property's page

867
00:49:53,320 --> 00:49:56,919
Speaker 1: on my website, you'll see properties that are in these good,

868
00:49:57,040 --> 00:50:03,000
Speaker 1: solid linear markets. The insurance arc that people have against

869
00:50:03,120 --> 00:50:06,920
Speaker 1: downturns that that and you know, think about this. When

870
00:50:07,000 --> 00:50:10,319
Speaker 1: you have insurance, you don't worry as much. You don't

871
00:50:10,400 --> 00:50:13,919
Speaker 1: care as much because you're insured. And the insurance people

872
00:50:14,040 --> 00:50:18,360
Speaker 1: have is the linear markets offer good cash flow, and

873
00:50:18,600 --> 00:50:24,880
Speaker 1: cash flow is very reliable. Appreciation is not very reliable.

874
00:50:25,000 --> 00:50:29,080
Speaker 1: It's very speculative. So if you buy a property, you

875
00:50:29,120 --> 00:50:32,080
Speaker 1: know one of my ten commandments of successful investing is

876
00:50:32,160 --> 00:50:35,920
Speaker 1: thou shalt not gamble. It's commandment number five. And that

877
00:50:36,120 --> 00:50:38,759
Speaker 1: means that the property must make sense the day you

878
00:50:38,880 --> 00:50:41,160
Speaker 1: buy it, or you don't buy it. You make your

879
00:50:41,200 --> 00:50:44,720
Speaker 1: money when you yeah, And I don't mean you're buying

880
00:50:45,040 --> 00:50:48,160
Speaker 1: like under market and finding that deal that nobody can

881
00:50:48,200 --> 00:50:51,200
Speaker 1: really find in real life. Right, I mean, the property

882
00:50:51,600 --> 00:50:56,239
Speaker 1: has good cash flow characteristics, and if you do that,

883
00:50:56,840 --> 00:51:00,200
Speaker 1: that's your insurance policy. If the value goes to own,

884
00:51:00,480 --> 00:51:04,239
Speaker 1: who cares. I mean, on my website you'll see properties

885
00:51:04,600 --> 00:51:10,759
Speaker 1: that have projected returns of annually all in right, that's

886
00:51:10,800 --> 00:51:13,160
Speaker 1: not cash on cash, it's all the ways you earn

887
00:51:13,600 --> 00:51:16,440
Speaker 1: returns on a property, and there are many ways. It's

888
00:51:16,440 --> 00:51:20,880
Speaker 1: a multidimensional asset class. Great video on my website, thirty

889
00:51:20,920 --> 00:51:24,000
Speaker 1: two minutes long, that can teach you how to analyze

890
00:51:24,000 --> 00:51:27,400
Speaker 1: the real estate deal. It's been watched zillions of times,

891
00:51:27,560 --> 00:51:30,520
Speaker 1: and it really it really teaches you how to analyze

892
00:51:30,520 --> 00:51:32,399
Speaker 1: the deal so you won't get hurt on a deal.

893
00:51:32,920 --> 00:51:36,080
Speaker 1: And and and then, and that's what people have to

894
00:51:36,560 --> 00:51:38,160
Speaker 1: have to do. You know, if you're buying in a

895
00:51:38,239 --> 00:51:42,960
Speaker 1: cyclical market, you are speculating, so be careful. But as

896
00:51:43,040 --> 00:51:45,960
Speaker 1: as an investor, definitely be careful because if your property

897
00:51:46,000 --> 00:51:48,600
Speaker 1: is worth half as much now, uh, you know in

898
00:51:48,680 --> 00:51:52,239
Speaker 1: California specifically back to California, I mean we saw the

899
00:51:52,320 --> 00:51:54,239
Speaker 1: worst real estate crash in history was like eight n

900
00:51:54,520 --> 00:51:57,080
Speaker 1: ninety two, and it dropped about during those four years,

901
00:51:57,320 --> 00:51:59,600
Speaker 1: but then in two thousand and eight it dropped sixty

902
00:52:00,040 --> 00:52:03,360
Speaker 1: cent in twelve months. So uh, we've got a different

903
00:52:03,360 --> 00:52:04,880
Speaker 1: taste of what might be possible. And I know what

904
00:52:04,920 --> 00:52:07,919
Speaker 1: happened in Florida as well. Um, but I would say

905
00:52:08,080 --> 00:52:11,040
Speaker 1: so if you're an investor in the property drops like,

906
00:52:11,280 --> 00:52:13,600
Speaker 1: you're screwed. I mean, you're stuck. And I and I

907
00:52:14,239 --> 00:52:16,560
Speaker 1: if you have good cash flow, because you're not forced

908
00:52:16,600 --> 00:52:19,280
Speaker 1: to not not if you have good cash flow, Correctum,

909
00:52:19,320 --> 00:52:21,200
Speaker 1: which is why I said I think for investing in

910
00:52:21,280 --> 00:52:23,759
Speaker 1: real estate, cash flow is the only option today. Um,

911
00:52:23,840 --> 00:52:26,880
Speaker 1: the strategy. But if I was buying a home, I

912
00:52:26,960 --> 00:52:30,040
Speaker 1: think about it like, is this a place that I

913
00:52:30,120 --> 00:52:33,440
Speaker 1: want to live forever? And if I can lock in

914
00:52:33,520 --> 00:52:36,200
Speaker 1: these historically low rates and I'm happy with the payment,

915
00:52:36,680 --> 00:52:38,840
Speaker 1: and if the problem if the value of the property

916
00:52:38,920 --> 00:52:40,960
Speaker 1: dropped in half but I still got to live there

917
00:52:40,960 --> 00:52:44,160
Speaker 1: and I still have a good payment, then why not? Right?

918
00:52:44,239 --> 00:52:45,600
Speaker 1: And so I kind of think about that. But but

919
00:52:45,640 --> 00:52:47,160
Speaker 1: if I was gonna buy for two or three years

920
00:52:47,400 --> 00:52:49,600
Speaker 1: and then hopefully move up, well maybe that's not the

921
00:52:49,680 --> 00:52:52,439
Speaker 1: best decision. What do you think the way people lose

922
00:52:52,520 --> 00:52:55,719
Speaker 1: money on real estate most of the time is they

923
00:52:55,760 --> 00:52:59,600
Speaker 1: are forced to sell a property at an undesirable time.

924
00:53:00,800 --> 00:53:03,600
Speaker 1: That happened to me, okay, So yeah, and and what

925
00:53:03,760 --> 00:53:07,040
Speaker 1: forces them to property that never made sense, that doesn't

926
00:53:07,080 --> 00:53:10,480
Speaker 1: have cash flow, that won't cover its cost, and hopefully

927
00:53:10,600 --> 00:53:15,239
Speaker 1: generate positive cash flow or a divorce those two things, okay? Um?

928
00:53:15,480 --> 00:53:20,320
Speaker 1: And and if you're not forced into that, you're probably

929
00:53:20,360 --> 00:53:24,040
Speaker 1: gonna be okay because you just can wait and and

930
00:53:24,200 --> 00:53:28,839
Speaker 1: earn that that return every single year. Yeah. Now, last

931
00:53:28,920 --> 00:53:30,839
Speaker 1: question I want to ask before we start wrapping this up,

932
00:53:30,960 --> 00:53:34,120
Speaker 1: is um, you've just given us as the index that

933
00:53:34,239 --> 00:53:36,040
Speaker 1: the Jason Hartman index, which I think, I think it's

934
00:53:36,080 --> 00:53:40,759
Speaker 1: really Heartman comparison and hi Heartman compar um. So you know,

935
00:53:40,880 --> 00:53:44,040
Speaker 1: we looked at real estate's cheap compared to gold, bitcoin,

936
00:53:44,160 --> 00:53:47,000
Speaker 1: barrels of oil, um, pounds of rice, not O J

937
00:53:47,520 --> 00:53:51,520
Speaker 1: but s and G etcetera. Now, many people think that

938
00:53:51,680 --> 00:53:54,440
Speaker 1: real estate is the best investment um and it's a

939
00:53:54,480 --> 00:53:57,120
Speaker 1: way to build wealth. But per the h c I,

940
00:53:57,480 --> 00:54:00,320
Speaker 1: it actually looks like it hasn't been that best in sment.

941
00:54:00,719 --> 00:54:02,600
Speaker 1: It actually looks like I should have probably just put

942
00:54:02,640 --> 00:54:07,000
Speaker 1: my money into the SMP uh or you know, oil, gold, bitcoin, etcetera.

943
00:54:07,400 --> 00:54:10,920
Speaker 1: That's a that's an interesting question. But what I didn't

944
00:54:11,000 --> 00:54:14,360
Speaker 1: say is that those other things don't produce income, and

945
00:54:14,440 --> 00:54:18,200
Speaker 1: they don't produce tax benefits, so the income property and

946
00:54:18,280 --> 00:54:21,120
Speaker 1: they don't give you inflation induced debt destruction, So the

947
00:54:21,239 --> 00:54:25,120
Speaker 1: income property is the best investment. But yes, you are right,

948
00:54:25,200 --> 00:54:27,440
Speaker 1: that's very good of you to point that out that

949
00:54:27,719 --> 00:54:33,799
Speaker 1: just on the straight price right uh, you know, buying

950
00:54:34,360 --> 00:54:39,000
Speaker 1: the house in gold versus versus the house, right, Um,

951
00:54:39,200 --> 00:54:43,120
Speaker 1: it's gotten cheaper. Good point. But also in addition to

952
00:54:43,200 --> 00:54:45,240
Speaker 1: the things that you said, so the tax benefits cannot

953
00:54:45,280 --> 00:54:48,440
Speaker 1: be understated. I mean that's a big deal because, like

954
00:54:48,520 --> 00:54:51,000
Speaker 1: you said, some of those properties all in cash on cash,

955
00:54:51,040 --> 00:54:52,960
Speaker 1: they could be three or four percent, but all in

956
00:54:53,080 --> 00:54:56,279
Speaker 1: it could be and the gold doesn't give you any

957
00:54:56,360 --> 00:55:00,560
Speaker 1: yield every year, and the collector rate when you sell

958
00:55:00,600 --> 00:55:04,960
Speaker 1: it where we need no tax, Yeah, we need cash

959
00:55:05,000 --> 00:55:07,240
Speaker 1: flow to live on. And so that's why it's super important.

960
00:55:07,320 --> 00:55:09,280
Speaker 1: The other thing though, that we that you didn't didn't

961
00:55:09,320 --> 00:55:11,719
Speaker 1: call out, but it's the leverage. And so I can

962
00:55:11,840 --> 00:55:15,080
Speaker 1: put ten percent down and control the whole price of

963
00:55:15,160 --> 00:55:17,560
Speaker 1: the house. I can't put ten percent down on gold,

964
00:55:17,600 --> 00:55:22,399
Speaker 1: bitpoin or oil and control that whole asset exactly. Yeah.

965
00:55:23,120 --> 00:55:24,719
Speaker 1: Then and then by being able to by being able

966
00:55:24,760 --> 00:55:29,520
Speaker 1: to control a much bigger asset. Two, But I get

967
00:55:29,600 --> 00:55:32,920
Speaker 1: the twenty dollars of appreciation to twe I'm sorry, the

968
00:55:32,960 --> 00:55:36,600
Speaker 1: two appreciation, two of tax right up, even though I'm

969
00:55:36,640 --> 00:55:39,040
Speaker 1: only controlling it with twenty my own money exactly. So

970
00:55:39,160 --> 00:55:42,720
Speaker 1: your return on investment in that example is one hundred percent.

971
00:55:43,480 --> 00:55:46,399
Speaker 1: You've doubled your money with very little money. So yeah,

972
00:55:46,640 --> 00:55:49,640
Speaker 1: you know, I I liken it to this. Remember when, um,

973
00:55:50,040 --> 00:55:53,000
Speaker 1: when you were a kid and you discovered that your

974
00:55:53,120 --> 00:55:55,880
Speaker 1: shadow was really big, right, Like the sun was at

975
00:55:55,920 --> 00:55:59,319
Speaker 1: your back and you looked forward and you saw your

976
00:55:59,400 --> 00:56:04,080
Speaker 1: shadow along the sidewalk was nine ft right and and

977
00:56:04,239 --> 00:56:06,640
Speaker 1: and you thought that's kind of cool. Well that's really

978
00:56:06,719 --> 00:56:10,520
Speaker 1: what income property allows you to do through leverage is

979
00:56:10,719 --> 00:56:14,680
Speaker 1: you can control, as you said, a much larger asset

980
00:56:14,800 --> 00:56:18,160
Speaker 1: with much less so your risk is lower and your

981
00:56:18,239 --> 00:56:24,439
Speaker 1: ability to generate wealth from that is magnified dramatically. Yeah. Yeah,

982
00:56:24,640 --> 00:56:27,520
Speaker 1: I was just spent the spent spent some time out

983
00:56:27,560 --> 00:56:30,040
Speaker 1: in Arizona hanging out with Robert Kiyosaki, and he kept

984
00:56:30,080 --> 00:56:33,560
Speaker 1: pounding into my head, uh, you know, controlling the asset, um,

985
00:56:34,080 --> 00:56:36,680
Speaker 1: but also not putting your own money into the asset,

986
00:56:36,760 --> 00:56:38,600
Speaker 1: even controling asset you don't even have your own money into.

987
00:56:38,719 --> 00:56:40,960
Speaker 1: So so real estate offers all types of opportunities. We

988
00:56:41,000 --> 00:56:42,440
Speaker 1: won't get into that we don't have time, but offers

989
00:56:42,440 --> 00:56:45,880
Speaker 1: all types of opportunities um that that they can't be overstated.

990
00:56:45,920 --> 00:56:48,600
Speaker 1: But man, Jason, that was some amazing stuff. I really

991
00:56:48,600 --> 00:56:51,640
Speaker 1: appreciate that. That index, Like I said, it's I I

992
00:56:51,800 --> 00:56:53,319
Speaker 1: say stuff like that off the top of my head,

993
00:56:53,320 --> 00:56:56,399
Speaker 1: but I don't have the actual data, the actual numbers. Yeah,

994
00:56:56,480 --> 00:57:00,200
Speaker 1: now you intuitively know this right, Yeah, yeah, into really,

995
00:57:00,239 --> 00:57:02,719
Speaker 1: so I'm gonna do that. Um, so we're gonna that's

996
00:57:02,800 --> 00:57:04,839
Speaker 1: that's Is that available on your website? Should we link

997
00:57:04,880 --> 00:57:07,520
Speaker 1: to that? You know it's not. And the reason I

998
00:57:07,640 --> 00:57:09,960
Speaker 1: haven't done it yet is we're producing a white paper

999
00:57:10,080 --> 00:57:11,640
Speaker 1: right now and we're gonna have a whole book on

1000
00:57:11,719 --> 00:57:14,320
Speaker 1: the index. So we're gonna have a ton of material.

1001
00:57:14,440 --> 00:57:16,880
Speaker 1: Just get on my mailing list, uh, you know, through

1002
00:57:16,960 --> 00:57:19,200
Speaker 1: Jason Hartman dot com or if you want that free

1003
00:57:19,280 --> 00:57:22,880
Speaker 1: mini book, go to Pandemic Investing dot com and uh,

1004
00:57:23,120 --> 00:57:25,080
Speaker 1: and we'll get that out there. But you know, we're

1005
00:57:25,560 --> 00:57:29,120
Speaker 1: we're still tweaking some things, so we didn't want to

1006
00:57:29,160 --> 00:57:31,720
Speaker 1: publish anything quite yet, got it, So will link to

1007
00:57:31,800 --> 00:57:33,840
Speaker 1: that and then where else do people follow you? Um,

1008
00:57:34,360 --> 00:57:36,880
Speaker 1: just Jason Hartman dot com or you know the book

1009
00:57:36,920 --> 00:57:39,440
Speaker 1: at Pandemic Investing dot com. Is good, you got it.

1010
00:57:39,600 --> 00:57:40,960
Speaker 1: We're gonna make sure we linked to both of those.

1011
00:57:41,040 --> 00:57:43,920
Speaker 1: And I know, I'm sorry Mark YouTube or podcast you

1012
00:57:44,000 --> 00:57:48,680
Speaker 1: know of course, yeah, yeah, which they'll find on your website. Yep, yep, awesome.

1013
00:57:48,680 --> 00:57:50,360
Speaker 1: Well we're gonna ahead and sign off. Jason, Thanks so

1014
00:57:50,480 --> 00:57:52,640
Speaker 1: much for sharing that today. Good stuff. Happy investing to

1015
00:57:52,680 --> 00:57:54,280
Speaker 1: you and everybody listening. Thanks Mark,