Jason Hartman starts today’s episode by sharing how real estate is getting cheaper and that we’re looking at record-low interest rates again. Afterward, Investment counselor Adam joins him to continue discussing the possibility of another recession, and understanding IDEAL can help set you up for comfort.
Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multimillionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions, this program will help you follow in Jason’s footsteps on the road to your financial independence day, you really can do it on Now, here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 0:53
Hello, hello, and welcome to Episode 1608 1608. So It never ceases to amaze any of us does it? Know It probably doesn’t. How, how ignorant some people are of calculating return on investment, understanding investments, understanding market timing, they think they can time the market. Usually they can’t. And listen, I’ve been doing this a long time, I don’t pretend to know how to time the market either. And nobody should really think that they can time the market. You know, if you think about it, look at all of these large institutional investors. Look at also the folks who run the economy, the Federal Reserve, the other central banks, the governments right, all around the world, not just the US government, every government if market timing or possible. Wouldn’t all of the institutional investors? Wouldn’t all of the governments and all of the central banks, just have it all figured out. Would there be any collapses in markets any crashes? wouldn’t they be able to just guarantee fantastic returns on their investment? And I I draw your attention, of course to the one of the most famous references on this. Look it up look it up. If you don’t know the company, I’m about to share with you, the defunct company I’m about to share with you. So you know when I say the company name, long term capital management, okay, ltcm long term capital management now that I got the acronym straight. That’s the company that thought they had it figured out those quants, those mathematical geniuses, they had figured out the market. And they went under, famously, or infamously, I should say, they went under the geniuses who? guaranteed, they told everyone they had the market figured out and guess what, a lot of professionals, a lot of experts believed them. They believed them. And they couldn’t figure it out. zillions of dollars lost lives ruined, etc, etc. Right? So just if you think you can time the market, or if you think your friend is smarter, and they can time the market, you know, that all of the all of the stories of all the people who’ve tried to figure that out, have failed, failed, failed miserably. It’s been disasterous. And that was a bomb dropping. That’s what happened to them. That’s what happened to them. So don’t be one of those people. All right. I’ve talked to you before about how real estate is getting cheaper, cheaper, cheaper, cheaper, yes, everybody thinks it’s getting more expensive, but they don’t know how to do the math. They don’t understand reality. So they think it’s getting more expensive when it’s actually getting cheaper. Interest rates just broke through a another floor on their way down. We had record low interest rates than we had record low interest rates again, and then we had record low interest rates again. And then we had record low interest rates. But guess what? Now we have them. You guessed it again. Again, again? Yes. So the interest rates got even lower. And when I say interest rates, I mean mortgage rates. And what does that mean? That means the houses keep getting cheaper. Remember 1% in interest rate equals approximately 10% in price So when you see the rates drop by a percent, the price has to go up by 10%. To make it up, it’s not exact. Okay? It’s not exact. There’s my disclaimer, do your own math, okay, but it’s close enough for government work As the old saying goes. So that’s the kind of differential we’re dealing with here. And if you look back at 2006, when the median home price, the median home price was $235,600, in the third quarter of 2006. And the interest rate on June 29, of 2006, for a 30 year fixed rate mortgage was 6.78%. That payment was about 1500 and $33 per month. But guess what? In 1984, the house payment was $1,003. I don’t have that in front of me. But yeah, $1,003. So it actually got cheaper to have a mortgage in 2006. And then guess what happened at the peak of the market in 2006, for the Great Recession, where most people consider the peak before that, the median home price in the second quarter. Wait, I already went over that. Good night. I’m on the wrong chart. Jason, look at the right chart. Okay. The right chart is today I’m talking about today. Sorry, not talking about 2006 anymore. We already talked about 2006. Now we’re talking about present day, second quarter of 2020. Okay, not the most recent data, I agree. But second quarter, median home price 313 and $200 313,200. And interest rate on July 30 2.99%. Making your payment on that medium price home. A beautiful, incredibly low, super cheap, actually, it is you know what, you know what that payment is? It is supercalifragilistic expialidocious? Yeah, supercalifragilistic expialidocious. Is that is Did I do that right? Let me know, go to Jason hartman.com slash ask. And let me know if I did that. Right. You know, it’s like trying to say another long word like antidisestablishmentarianism. Remember that really long word you’ve learned in elementary school? I think that’s it. Right? antidisestablishmentarianism. What does that even mean? I don’t know. I gotta look it up. Okay, but you’re whopping 1300 $18 payment on that median house price today. Means means Guess what? It means that that same house today is about $657. Cheaper when adjusted for price, interest rate and inflation. Yeah, but I do want to remind y’all, y’all, I’m sounding Southern now, because in the southeast is where you should be buying houses, mostly right now. And we’ve got lots of them for you go to Jason hartman.com slash properties. It has not adjusted for wages, and the wages are not adjusted for inflation for most people. But, but I’ll Betcha for most of you listening, you dear listeners. They are inflation adjusted your wages, or they are close to being inflation adjusted or they are even better than inflation adjusted. And that means the housing from your perspective, is even cheaper than that. Those numbers I gave you, or for as Amity shlaes who was on the show, Amity shlaes the author, she’s written some great stuff in the great while not in the Great Depression, but she wrote a book about the Great Depression called the Forgotten man, right? You are not that person. You are probably beating the system, especially if you are following the advice of Jason Hartman. Oh, that’s me. Don’t talk about yourself in the third person. That’s just really weird. Yeah, I agree. Don’t do it. I hope I’m entertaining your folks because if I’m not, I’m at least entertaining myself. It’s the end of the day and I’m a little punchy, you know? Boy, sometimes the days are just like a blur. so much stuff coming out. Yeah. Oh boy. Oh boy. You know, I used to say that years ago, when it was just a fax machine just kept humming and humming. And all these faxes and phone calls, and now all faxes just converted to emails and text messages and so on and so forth. And and still some phone calls in there. But Wow, wow, too much stuff coming at us nowadays. Anyway, folks, it is an amazing time to be investing in real estate. Yes, I am pretty bullish right now. Remember, I am the same person? Who in what was it? March? Maybe it was March? Who told at least you first time investors to keep your money? Don’t even think about it. If you try to invest with us. We don’t want it. We don’t want Yeah, go away. That was me. Go back and listen to the old episodes from probably March, I think maybe April, but probably March, where I told you not to invest? Yes. I said, Nope. Don’t do it. Well, right. Now, I’m telling you, you should do it. Now. That doesn’t mean the entire market. That means selected markets, selected properties, pretty linear markets, which by the way, are turning to be hybrid markets pretty quickly. And if you’re new to the show, and you don’t know what I mean, when I talk about linear, hybrid or cyclical? Well, listen to the Quick Start podcast, if you’re new to our content, we have a another podcast, just with some of our core content, the Quickstart podcast, and there are a lot fewer episodes a lot less to sort through. And that’s available for you also, the YouTube channel does a good job of summarizing some of this stuff. And, of course, our team can help you Yes, we are not just a platform where you can buy properties, although we are that we are people and our people are happy to help you just go to Jason hartman.com. And fill out any web form there. And we’ll be we’ll get in touch with you are extremely knowledgeable. And now that I’ve gotten rid of some are superduper, ethical, wonderful people will be happy to help you. Okay, so we have got a talk of the continuation of a talk with one of those people. And that is coming up right now. Again, if you need us, Jason hartman.com reach out to us. If you’re in the United States, you can always pick up the good old telephone and call us at one 800 Hartman. Okay, without further ado, let’s get to part two of today’s episode.
So that really begs the philosophical question of, you know, what is the government the government is just a series of taxpayers that pay into have a government in organization, it’s look at it like a homeowner’s association or a we’re a nonprofit membership organization like the PTA or something right. I don’t have a PTA. I don’t know how that works, that I made a bad example. But whatever, you know, say you have a club that you’ve created, right? Well, the club collects dues from its members to pay for its expenses, right, and the club could go into debt to get it all. And the club has to pay that back, meaning the member that
Adam 13:38
the situation that we’re in, though, we are in a situation where the club can’t create its own things. The government creates the dollar we I don’t owe it back because I can’t create dollars. The federal government spending is the is the receiver saving. So it’s the net Publix or the private sector savings. So the public sector spending is the private sector savings. If you look at the debt clock, which I don’t know how to pull it up on here, about the debt clock, the US national debt is 27.26 4 trillion we had seen that’s
Jason Hartman 14:12
That’s trillion with a T, folks.
Adam 14:15
But if you look at us total national assets, it’s 150 $6 trillion.
Jason Hartman 14:23
You know, I would be very curious to see because what you’re basically showing sharing with us is the concept of the balance sheet. Okay. So I would be interested in seeing what how do they calculate those assets. And I do agree with you, by the way that the US has a ton of assets, both tangible and intangible assets. And I’ve done you know, many podcasts on that topic over the years because I agree that it’s not as bad as the duman bloomers would have you believe. If you’re listening to Peter Schiff, and reading Zero Hedge all the time, you know, and Jim Rickards these guys They’re just always wrong. They’re they’re so interesting to listen to. But they’re just like, when is all of their doom going to come true? You know, they were telling us that in the 70s, the 80s, and 90s, the 2000s, the 2000 teens, and here we are in the 2020. And they’re still saying it. And yet, there’s been like very little consequence, except higher taxes, more government intrusion in our lives, and higher inflation, whether hidden or unhidden.
Adam 15:34
Alright, we need to move on, or else, we’re never gonna get to the actual good part that I have. Okay, but you really got to just address that one thing. All right. So let me Let’s finish with Jerome Powell real quick,
‘Jerome Powell clip’ 15:45
preserving the flow of credit is essential for mitigating damage to the economy and promoting a robust recovery. Many of our programs rely on emergency lending powers that require the support of the Treasury Department, and are available only in very unusual circumstances, such as those we find ourselves in today. These programs serve as a backstop to key credit markets, and have helped to restore the flow of credit from private lenders through normal channels, we have deployed these lending powers to an unprecedented extent. And they hold in large part by financial backing and support from Congress and the Treasury. When the time comes, after the crisis has passed, we will put these emergency tools back in the toolbox.
Adam 16:27
So that was the whole back of the toolbox thing. Again, like we talked about before, they’re not, they’re not going away. And they will be coming back whenever times get times get bad again. So So yeah, so the question is,
Jason Hartman 16:41
That the good part? Is that the aha moment?
Adam 16:45
No, no, that’s just the key part of that. Remember, as we move into the next one,
Jason Hartman 16:51
I was worried that that was the climax MERS, I was like gonna go.
Adam 16:59
So we have to ask ourselves, what if it’s another great recession right now. So I went through, and I said, let’s run this scenario. So I looked at the Dow Jones, because that’s the sexy one that gets all the love from the media. During the Great Recession, the absolute peak of the great recession hit the peak of the market before the great recession hit October 2007. The Dow reached 17,356. So I said, Let’s pretend that Today is October 2007. In the housing market, three years later, October 2010, you’d seen a 24% drop. So if you’d waited three years, it had gone down and come back up. 24%. So I wanted to know, what if I bought a house today? And in three years, I bought a house at about a 20% drop? What would it look like? If
Jason Hartman 17:54
it was good chunks, this might be the good part.
Adam 17:58
This is the good part. So let’s say I bought a $250,000. House today, with 20% down. So I got a $200,000 loan for interest rate of 3.75. Very easily gettable. At 30 year mortgage, I would be paying $926 a month with principal and interest.
Jason Hartman 18:17
That is, folks, that is a gift from your rich uncle Jerome Powell right there. Wow. That is I mean, get your cash register ready. You know, that is phenomenal. I mean, only 900 and something dollars a month for $250,000 house, you can see everybody in the country is trying to buy a house right now. And
Adam 18:38
so then I looked Alright, if in three years from now, and I just went to the beginning of the year to make it easy for myself in the future. If then beginning of if on January 1 2024. I close in that $250,000 house drops 20%. And now I’m trying to buy it for 200,000. My interest rates going to be higher, because obviously if we’ve had a 20% drop, and the economy, interest rates are going to go up because of fears in recession. And it’s I just said let’s just say it’s 6% it could be higher. I you know, I was paying 6% for an investment loans not that long ago. So if it’s 6%, even $160,000 mortgage, it’s $959. So it’s $33 a month higher in three years on a house that’s 20% cheaper, and
Jason Hartman 19:25
if it ever gets 20%
Adam 19:27
she didn’t gets lower. So I’m playing the game of let’s run the numbers the same as the Great Recession. But on January 1 2024. When I have the $200,000 loan, I have also paid down 12,000 In principle, I have had $23,000 in interest that I’ve paid that had been at least partially tax deductible. And assuming the port I found a portfolio for one of our Florida properties that was around 250,000 the cash flow after 8% management 8% vacancy and 3% mainly It was around $250. So I said, assuming $250 a month, I have also got $9,500 in positive cash flow. So I’ve paid down 12,000. In principle, I’ve gotten a potential $23,000 in tax benefits. And I have 9500 in cash flow in my pocket. On January 1 2024, my first payment is due on the other one. That’s it. And I’m going to assume about $225 a month cash flow moving forward. Because my rents probably dropped a little bit on that house, if I have to go down to 200,000. You know, you’ve got a higher monthly payment, and you’ve got no principal pay down no interest, no cash flow. So you’re at zero. So that’s what you’ve missed waiting the three years to try to buy it bottom.
Jason Hartman 20:49
Adam, I think it’s easier to evaluate the missed opportunity by simply just looking at the return on investment directly, right. So so here’s another way to look at it. Okay, so, you know, how much is the downpayment you made on that house?
Adam 21:06
You said it’s Tom, it was 50,000.
Jason Hartman 21:08
So, okay, so $50,000. And if you go to Jason hartman.com, slash properties, and look at the performance there, where they’ve got all of the numbers, and if you want to know how to read that sheet and standardize your data, as a real estate investor, just look at the free video, which by the way, is an updated free video. Hopefully, the update is there now. I think it is, I think it was updated. Just yesterday, there’s a new version of that video at Jason hartman.com on how to analyze a real estate deal. How to Read a performance. I mean, the worst of these performers will show you an overall return on investment of say 25% annually, okay? I mean, that’ll be about the lower end, some will be 30 35%. But whatever it is, okay. Say it’s, you know, 25%, so you take 25% of $50,000. So that would be $12,500. And your time period was two years, right, Adam? There’s three, three years, okay. So I won’t compound it. But the return on investment should be compounded to do it properly. But since I’m just doing it in my head, that’s 12,500 plus 12,500. For year number two, plus 12,500. For year number three. So that’s $37,500 return overall, on a $50,000 investment. Now, disclaimer, okay, you have to understand that, number one, that might sound really phenomenal and ridiculous. Like, I can’t imagine that’s really going to happen, Jason, you’re just making that up? Well, no, you have to understand that income property. The reason it’s the most historically proven asset class in the entire world. And it’s made more people wealthy than any other asset class for generations now, is because it’s a multi dimensional asset class, and you earn return in lots of different ways. A lot of it, it’s like, it’s like the old metaphor of an iceberg, right? You know, only a small part of the iceberg is above the water, the rest is below the water. Okay? As as the captain of the Titanic, okay, so the iceberg, a lot of that return isn’t directly seen. And that’s why you have to know how to do the math. And that’s what that free video, it’s like a 30 minute video got a little longer when I read
Adam 23:29
26 in one long.
Jason Hartman 23:31
Yeah, you can’t imagine me going long, right? That video will explain it to you. Okay, how you earn that return. But I think that’s just a really easy way to look at it. You know, I mean, you could look at it the way Adam presented it to either one, you know, I just
Adam 23:44
wanted to present real numbers here, right?
Jason Hartman 23:47
set of percentages.
Adam 23:48
Yeah. Right. So that’s what you’ve given up the first three years. So now, now, let’s go six years out, if you look six years out, from the peak of our market, in the Great Recession, it was essentially flat. After six years, so you’re back to square one. So you’ve held on to an asset for six years and got nothing in the stock market. So if we look at the $200,000 loan we took out today, and the hundred on the left, and $160,000 loan we took out on January 1 of 2024. If we run it through to where it’s been six years from today, so on January 1 2027, the $200,000 loan, you have now paid down 25,000. In principle, you’ve had $43,500 of interest paid and you’ve made 18,500 in cash flow on your other one your your three years you’ve only made 6000 in principle pay down 28,000 in interest paid in 80 $100 of positive cash flow because you’re making lower cash flow. So the the the opportunity costs of just waiting those three years to try to buy it. The bottom doesn’t really exist. Because if you remember, that’s the three years that you’ve paid on this hundred and $60,000 loan that you’ve gotten over the last three years is worse that 60 228,080 100 is worse than the 12,000, in principle, pay down and 9500 and positive cash flow from the first three years of your $200,000 loan. So did you really gain anything? Waiting those three years for the trough?
Jason Hartman 25:27
Yeah. Now, I think that that this folks, see, you look at you know, when you hear these talks about the value investing philosophy of Warren Buffett, and they talk about that in the stock market, and that is, so they say, you know, you don’t time the market, don’t try and time the market, just buy quality, and let it ride. And I generally agree with that philosophy, the value investing philosophy is sound, you know, Benjamin Graham, was Warren Buffett’s mentor, or inspiration, I’m not sure which way to say that, you know, the market timers almost never win, right? They they win occasionally. And they got a few great stories. But usually people don’t like to talk about their failures as much as their successes. So you don’t hear about all the times they lost money, right? Or you don’t hear about the dogs that don’t bark and how much they would have made, if they just left it in. Okay, so. So that’s, that’s an issue. But with income property, Adam, it’s so much better not timing the market, because you earn your return in so many different ways, right? You started off this presentation with that slide, which maybe we should just go back to for a moment, the ideal acronym, and that’s a really old acronym in the income property world, but it doesn’t even cover it anymore. You know, I be EA L, okay. Income property gives you these ideal characteristics, it gives you income, it gives you depreciation, and that means good depreciation, it’s a, it’s a tax benefit, it’s the best tax benefit ever, because it’s a phantom write off, or a non cash write off. In other words, the property could be appreciating, it could be positive cash flowing, it can be doing great, and you still get a tax benefit, potentially that depreciation, right. And then you have equity growth, meaning your tenants pay your mortgage down, you have appreciation, meaning the property goes up in value, and so you get equity that way. And then to top it all off, you have l in ID EA L, you have leverage, meaning you can do more with less. Okay? So in Adam’s example, you put 20% down, and you have 80%. Paid for by the bank, you’re using OPM, you’re using other people’s money. This is just a partial list. By the way, this is an old thing. It doesn’t have any of my advanced techniques in there, like inflation do step destruction, II d d, inflation induced debt destruction. If you don’t know what I’m talking about, when I say that, go check out my podcast, the creating wealth show, we go into that in detail. If you want to find exact episodes on that. Just go to Jason hartman.com and type in inflation induced debt destruction and you will be wowed and amazed. Most people are by the hidden wealth creator with income property that is in addition to what you see on the screen, income, depreciation, equity, growth, appreciation and leverage. But leverage is OPM. It’s other people’s money. It allows you to be so much more than you are. It allows you to be a five times bigger investor than you are. Okay, it’s just a wonderful thing. Okay, Adam, any comments on that? But
Adam 29:05
no, i i agree. I didn’t put the depreciation in there either. But you’re missing out on three years of roughly $10,000 a year depreciation for your property in the first three years of the $250,000. One,
Jason Hartman 29:20
that’s good. Now understand that depreciation is a bit of a complex issue. We are not tax advisors are numerous talk to your tax advisor. You know, of course, the the terms of service at Jason hartman.com and the privacy policy do so, but yeah, you know, taxes are a complex subject, but income property is the most tax favored asset class in America, the most historically proven asset class in the world. So Adam,
Adam 29:47
I was just looking through to see common Gosling’s nest in New York says I know this is off topic. Did you hear the latest the nanny state in action and are looking to have all of us have masks on in our homes? Why are you guys not masked Oh,
Jason Hartman 30:01
that is so absurd. I can’t read that.
Adam 30:04
Have you read it? It makes more sense if you read it,
Jason Hartman 30:06
what was Pennsylvania doing that or something?
Adam 30:10
I don’t know what it was. But essentially, it’s only it’s not if you’re just in your house, it’s if you have like a worker over, or if there’s people who you’re not usually around, it’s essentially, if it’s an out, if it’s like you’re at an outdoor event, but it’s in your house,
Jason Hartman 30:24
they just ask that you wear a mask, you know, look, look for my YouTube video on my YouTube channel about where I interviewed the mask, doctor. He’s an expert on mask, and he shows how the mask is actually made. The mask is making people sicker. Those masks are dangerous, folks, it’s not as simple as it seems. There are many reasons, but one is that you’re breathing in your own respiration, which is extremely unhealthy. The point of getting it out of your body is to get it out of your body. But number two, is people spread more germs because they keep touching the things and fiddling with them. Okay, so there’s the mass has a lot of problems. And of course, all the error still comes out. Okay? You know, it’s not like when you exhale, the air goes away, it still goes into the environment. You know, it’s just a way for the government to control us. So
Adam 31:14
Alright, so ultimate bargains, thanks to the taxpayers.
Jason Hartman 31:17
Adam’s wife is a is a nurse. So she wears a
Adam 31:22
95, eight to 12 hours a day. And
Jason Hartman 31:24
I don’t think that it’s happened, I can hardly wear it for 20 minutes at the grocery store. I hate those things.
Adam 31:30
But ultimate bargains says the Fed cannot put the toothpaste back in the tube, it will never increase interest rates. I don’t agree with them never be able to increase interest rates again, it’s going to be a little it’s gonna be a while I will grant you that. But I think we will see higher interest rates. Again, they can’t, it’s eventually the economy will turn around and start going back to where it was, you know, before COVID. And when that happens, they’ll have to start changing things in the economy, or else it’ll run too hot. And inflation will skyrocket.
Jason Hartman 32:04
Yeah, well, the problem is, and what the people who disagree with that statement, Adam, what they say is that, you know, like, like our viewer said, You can’t put the toothpaste back in the tube. They can reel that in, but it’s not nearly as easy as it so I agree. Okay. And the the one great example we have of that is Paul Volcker, who recently passed away. We talked about him many times on the podcast, he was the Federal Reserve Chair in the early 80s. Okay, and he was the one that broke the back of inflation by raising interest rates to astronomical highs, because inflation was just rampant. And it was, it was ugly. I mean, that was really hard to do that. What Paul Volcker did it was hard to number one, have the have the courage to do it, because he was so hated at the time for doing it. It’s like making someone take really bad medicine. And so it’s very damaging to, to raise the rates and manipulate the market that way to stop the inflation. These things have a spiral of life of their own. So it’s not like I mean, Jerome Powell just glibly sort of says the same way. Ben Bernanke. He said, you know, we’ll just put the tool back in the toolbox and everything is gonna be okay. Yeah, well,
Adam 33:28
not quite. But even if the Fed doesn’t end up raising their rates, eventually, you know, the stock, other parts of the economy will get good enough that they’re going to have to raise the rates to get investors to come in and start buying the mortgages. So the rates will have to go up in order to get the spread that they need. Sure. But I mean, the Fed not raising the rates isn’t that big of a deal. So acentric says, Now that Biden may be president, are you guys learning Chinese, as that will soon be the national language of the world? Yeah, I haven’t gotten that far yet. Are you learning any new languages? Jason?
Jason Hartman 34:03
No, definitely not.
Adam 34:05
We got away is censored also says have you seen the news about the California law about foreclosures? people buying homes for personal use will be able to underbid investors? I haven’t seen that.
Jason Hartman 34:16
Yeah, I have seen that. And I thought about it. And of course, it’ll be another failed disaster. Gavin Newsome, stupidity. That won’t work for a million reasons. We’ll talk about another day, because it’ll take too long. Craig says fed raising rates is a huge deal. Raise equals economic collapse.
Adam 34:35
I don’t agree with that. I mean, we were at the I mean, the Fed rate was significantly higher than it is now just two years ago. And we didn’t have an economic collapse.
Jason Hartman 34:46
Well, it depends. You know, it’s all a matter of degree. It’s really just all a matter of degree and in speed at which they do it. So see, Paul Volcker did it. He did it quickly, and he ended the inflation problem, but it was very Very painful, folks. So we’ll see. We’ll see what happens. So folks, we will wrap it up. But join us tomorrow for our Charlotte webinar. You’re going to learn some good stuff. I have a little teaching at the beginning of that webinar. That’s Jason hartman.com. Slash Charlotte. Kim just posted something.
Adam 35:18
She said, Why do you think people buying houses in Seattle? Like a crazy?
Jason Hartman 35:22
Yeah.
Adam 35:25
I don’t know why people are buying in Seattle. Yeah,
Jason Hartman 35:27
they’re, they’re crazy. They’re crazy. They’re crazy. So that is not a good idea. Don’t do it.
Adam 35:34
Correct. And Volker was able to because the country had way less debt than we are not restrained in our spending by the dead. The dead, like I said, is just money that we’re holding, as assets. I mean, the federal government creates the dollars and puts them out there, our taxes don’t actually pay for anything. The only reason they have to tax is to give our currency value, and to potentially remove any try to get us from not using some of the resources that are needed. The danger of inflation comes when there’s competition for resources. And we’re not experiencing that right now.
Jason Hartman 36:12
Yes, there’s a housing market.
Adam 36:14
There are some areas where it’s happening, but the government spending is not what’s causing that, like government’s not going and trying to buy up all the lumber. A big part of our lumber problem right now, is the fact that COVID shut down a lot of the production for a while, even the new for that now.
Jason Hartman 36:31
Now, those but that story, right? But yes, I
Adam 36:36
heard you talking about it, ramp up the production, they still know each other Go ahead. They still have to ramp up the production, we still have tariffs coming in, on all of the lumber that’s coming in from Canada. So it’s not the government purchasing and the government money coming in? That’s the issue with that. It’s the other parts around it, that’s creating the run up in cost.
Jason Hartman 36:58
Okay, that is just too complex of subject to debate today. But, you know, we’ll talk about debt and inflation and, and you know, I’m a little bit in the middle of this. I don’t think it’s as easy as Adam makes it out to be,
Adam 37:09
but I don’t make it out to be easy. This. The theory itself is easy. The implementation is hard.
Jason Hartman 37:15
Well, I also don’t think it’s as bad as the doom and gloom errs, like Jim Rickards and Peter Schiff would say, either, so you know, I’m, I’m a little bit in the middle about it. So good stuff, everybody. Thanks so much for joining us. We really appreciate it. Be sure to like and subscribe if you’re watching on YouTube and do the bell notification. So you’ll catch those impromptu live streams like the one I did on Monday. And also, we will see you tomorrow at our Charlotte investing webinar. This is a totally new one. It’s a it’s a market we haven’t been in for several years, I made some great money in that market. I profiled and exchange I did out of Charlotte into two more properties in Memphis. And this is just a great market. It’s been pretty hard to access. We’ve got brand new construction there, and some teaching we’re going to be doing on that webinar as well tomorrow. So join us Jason hartman.com slash Charlotte. And we will see you there. Thanks everybody, and happy investing.
Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.
Leave a Reply
*
Be the first to comment.