Jason Hartman talks about recessions, government stimulus and plays some Jim Cramer clips on printing money. As a tenth episode Jason talks about health and the pandemic. He brings on a local from Shenzhen, China about lifestyle changes.

Investor 0:00
Yeah, I still feel like I’m on the path for sure. And there’s a lot more wealth that I want to grow and things I want to do. But I’ll tell you, it’s when I think back to where we were, and what both of us my wife and I both have done to be where we are today. It almost like if you told me this is where we were headed 10 years ago, or what I would have told you, you were nuts, because I could not. I couldn’t have imagined we’d ever be able to buy real estate again, or that I’d ever want to, you know, here we are with, with several properties later. And we’re still we’re still chugging along.

Announcer 0:30
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 multi millionaire 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 Have 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. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 1:21
Welcome to Episode 1410 1410, as we are in an amazing world, a scary world, and the Keynesian ‘s are rearing their head, saying that it’s time for the government to just start printing money. Well, the government and the Federal Reserve their unholy alliance. And it looks like either or both of those agencies will be getting into the business of buying stocks. Yes, that’s way beyond the original idea of the plunge protection team. This is a new era in which we We are witnessing, we are witnessing history. It is absolutely crazy what’s going on right now. And we are obviously on the verge of some big changes in the economy, a recession will inevitably come out of this, which is two quarters of flat or declining GDP if the government does not provide stimulus, but there is no question, in my mind, at least, that the government will provide massive amounts of stimulus, and you’re hearing it from every quarter, and that’s coming. So we’ll see if they can keep us out of a recession or not. But no matter what, even if we do end up in a recession and say it’s a bad one, say we’re, we’re in a recession for three years, and you lock in on these ultra cheap mortgage rates. And if those rates go down even more, which it begs the question, How much can they possibly go down? rates are so So low already. I mean, are we going to get to the point where you go to the bank, and you say how much is a 30 year mortgage and they say, zero, it’s free, you can just have the money for free for three decades. Well, it were already there. I know, it may not be free on the face price, but it’s certainly free. When you look at taxes and inflation, and arguably, you’re getting paid to borrow today. And as we go through the next three decades, the next 30 years, as you are a long term investor, you play the long game. I don’t think anyone would argue. I mean, I can’t imagine any economist outing that there will be very significant inflation during that next 30 year period, as we see all of this stimulus, all of this money printing. I mean, listen to this clip with Jim Cramer on CNBC as he talks about how the government needs to just just bail us out, bail us out. And you know, it’s a well, it is what it is. So here we go.

Jim Cramer 4:10
Avoid that chapter that we had early on. during the crisis, Jim, where there was a stigma and asking for help and admitting that you needed help, right. So we have to get rid of that. Now. Fortunately, the rates are so low, we can do this. We can be the strongest country on earth if you use the federal government’s balance sheet. Not so the federal reserve the actual federal government, you know, everyone knows the government. It’ll all taught everyone in this country, individuals, corporations, that has to be suspended right now. So they have more money, are these radical actions you so not just delay the April 15 tax filing deadline, but just say, no taxes? You don’t have to pay any taxes. Can you imagine? They are can they be done smoothly? Absolutely. Are we going to sit here and let so many companies go bankrupt because of the illness. I think that is stupid. This is the time for Radical action, and the action can be done by the federal government. Once we settle that out and stop worrying about money, we can worry about health simultaneously right now we can’t do both. I see a number of companies, the sp 500 degrees will go bankrupt the next four weeks. Does that make any sense at all? No, we do not want to reformulate any corporation, let alone the large corporations because they cannot get paid. How do you make an airplane with so many suppliers when the suppliers, this law, of course, the largest export we have, when someone

Jason Hartman 5:27
people, suppliers, of course gets sick, the federal government could tide us over. I don’t want everything closed. I want everything to work smoothly. And the only way to work smoothly is to take advantage of what the rates are. And for the federal government and borrow as much as possible and then give it to us. This can be the federal government could just borrow borrow, borrow, you know, finance more debt and then just give us the money. Okay, well, certainly that will work in the short term. There’s no question about that. By the way, of course, this is a template pisode show, and we’ll get to our 10th show guest here in a few minutes. But this will be quite a different 10th episode show than you’re used to 10th episode is where we talk about something of general interest. So we’ll get to that in a moment

Jim Cramer 6:12
returned after we get healthy. We want to come in here every day and see which CEO was taken down by this illness. How many workers are taking down know what we have to do is be able to say, you know what, no matter what the country will keep running, because money is not a necessity at this time. I seen any signs at all from our leaders in Washington in this administration that they believe the problem is as significant as you think it is. Absolutely not. They know nothing. They know nothing here comes around, we know more than they do. And that’s not acceptable either. I want the federal government to know more than me. All right. I hear you. I knew more than they did in 2007. And I know more than they do now. And it is disappointing. Perhaps they Talk to more leaders and leaders to more candid.

Jason Hartman 7:03
Jim Cramer. There you go. Always humble.

Jason Hartman 7:08
That’s his brand, you know, humble guy, humble guy. But But yeah, certainly there will be bailouts there will be stimulus. And that means money printing, that means QE. That means what it means, you know, the drill folks, we went through this during the Great Recession, and it’s coming again. So that is going to materialize ultimately, in inflationary pressures. It’s got to work its way through the system. But the interesting thing about this president and I think this is really great for us common folk, is that, you know, he is like this, and listen, I’m not being political here. Okay. I’m just being factual, right, based on rhetoric and on actions. This president Okay, love him or hate him is the champion of the middle believe a lower middle class, okay, the blue collar worker, the small business owner, which contrary to the Obama administration’s belief that, you know, small business owners are like these big, evil rich people, which, you know, most of them certainly aren’t there. They’re just struggling people who happen to own a business rather than have a job. And sometimes that business is a lot less profitable than a job. And they work much harder at it than a job. So, you know, this myth of business owners, they’re not all bankers banksters on Wall Street, okay. They’re not all big tech companies. And by the way, the one of the great silver linings of many that will come out of this is that you will start to see the bogus companies be weeded out of the system, these bogus tech companies with these extremely ridiculous burn rates that have had these IPOs where they’ve basically just ripped people off. And they’ve engaged in massive amounts of financial engineering. And people have just speculated maybe their life savings away. Hopefully, they won’t be too hurt, but I think it’s kind of inevitable. But we’re going to see a lot of this fluff come out of the system. And ultimately, that’s got to happen. Okay? Because these companies are just built on a house of cards, many of them and you know who I’m talking about, I’m not even gonna bother naming names, but these ridiculous high flying companies that, you know, have never made a dime should should not be where they are, or real business. Like I’ve always said, a real business earns a profit. That is a real business. Okay, fake businesses. Well, they engage in financial engineering, and rather than actually earning revenue, they just go out and raise more money. That’s a fake business. Okay? Real businesses. Now Good old fashioned revenue. How do we make money we earned it is the old commercial used to say. And before we get to our 10th show topic, just a quick word here from one of our listeners. Hey, Jason, Johnny from Arlington, just calling to see how your stock portfolio is doing. Looking at the figures right now and it’s looks like everything’s down eight to 9%. Hope your 401k is doing well. He’s obviously joking. Of course. I’m just kidding. I’m really glad that you encourage myself and many others to invest in real estate and never have I’ve been so happy to see the boringness of investing in single family homes. Pay off so well. Thanks. Thanks Johnny for the great comment, and always appreciate your comments and and from other listeners. So if you have any questions or comments for the show, Jason hartman.com slash ask or feel free to leave us a message and reach out to us at one 800 Hartman, one 800 Hartman, you can always catch us by phone as well. And if all our investment counselors are busy, just leave a message, and we’ll get back to you. But that is a good point. Listen, income property is not perfect. There is no perfect investment. However, compared to what is always the question. And you know, if we go into a recession, I think we’re gonna get through this pretty well, incredibly cheap debt. And with history as our guide, looking back at the Great Recession just over 10 years ago, rents held up surprisingly well, really just a surprising amount of strength of rents in linear markets. And the unknown here, of course, is the government’s role, the central bankers role and I’m not just talking about the Federal Reserve in the US, I’m talking about central banks all over the world and governments all over the world. It’s going to be stimulus, stimulus stimulus. It’s going to be money flowing into the system. It’s going to be printing, printing, printing. And when the government spends when the government prints, what does it do? It all ultimately circles back into inflationary pressure, where when things start to recover, as they always do, then we start to see the problem that leads to classic inflationary pressures, a large amount of currency dollars or whatever currency chasing a limited supply of goods and services. And as we’ve been reviewing on the past couple of shows this week that supply demand shock, just wait until we get to that inflection point where supply and this is a prediction right. We don’t know exactly how this will play out, but we certainly have clues to it now, where we have limited supply and constrained supply due to the Quran. A virus problem and we’re starting to see that now, as supply chains are affected, right. And then as that demand curve ramps up, wow, that’s when things go really, really crazy. And income property investors just benefit through the whole thing. You know, it’s just an amazingly durable, multi dimensional asset class. So, our 10th episode show is usually a positive motivational topic, or something that you can use to be more successful in life. today. That is not the case. Well, it is something you can use to be more successful in life. But it’s not all roses by any means. We have Gary back at from China from Shenzhen to talk about what is going on there in a longer format. So let’s hear a little more from him. We heard just a short intro from him on Monday’s episode, but now we’re going to go into more depth as to China. The global economy. So here we go.

Jason Hartman 14:06
I want to welcome my friend from China, Gary humbucker. Back again, to talk a little bit more about what’s going on in China. some thoughts on the world economy, some thoughts on supply chains, hospital bed shortages, and why. Kovac 19 is a big deal. It is not the same as the flu. You know, I see people posting a lot of very misleading stuff on social media, and asking things like, what’s the big deal so what the flu kills so many people a year and they they put the number, this is not the same. That’s what you’ve got to realize this is not the same thing. We’re going to talk a little bit about that. Knowing that neither of us are medical experts. We’re just both researchers. And and I’m a reporter, and of course, Gary is acting as a reporter to in this instance, Gary, welcome back from Shenzhen, China. Thank you for joining us again.

Gary 14:59
Hi, Jason. Good. To talk.

Jason Hartman 15:00
So, you know, they’re kind of four major reasons that Corona virus is a big deal. And it needs to be respected more than other epidemics, if you will, more than the common flu. This is a different kind of strain. It’s asymptomatic. We’ve all heard that. So that means you can be contagious for up to 14 days, not even knowing you’re sick. So you’re not going to self quarantine. It lives outside the body for much longer. It has a much higher complication rate, and it is much more deadly to older people. Let’s dive into those four things, Gary, and why don’t you start with the asymptomatic component?

Gary 15:46
Hi, Jason. Yes, they’ve talked about and while I am not a medical expert, as you know, I’m trained engineer and I’m a test engineer so I know how to acquire data and analyze data and The information I’m providing from you has come from long hours of reading true. First source code science reports. Because I’ve been self quarantine for six weeks, I have a lot of time to do research. So it’s asymptomatic for long periods of time that a makes it very hard to trace where it came from. And be because it is so infectious. You can infect numbers of people even into the dozens, without even knowing you’re sick. You’re infectious while sick,

Jason Hartman 16:33
oh, maybe much more than dozens. But it doesn’t have to be a lot more than dozens, given just the multiplier math and the exponential math of humans coming into contact with one another. And you know, I’ll tell you folks, there are many silver linings that will come out of this one, hopefully is that people will learn how to wash their hands properly, and they’ll stop shaking hands. Gary, you and I have talked about how the biggest killer in his History is the humble little mosquito. And I would argue that maybe the second biggest one, or at least if not a killer, but an illness carrier is the handshake. You know, we haven’t talked about that before. But what do you think about that?

Gary 17:14
A lot of the recommendations, people are probably thinking about elaborate procedures, but someone asked the doctor and they won’t. How can you be around sick people they enact get sick, and I don’t think we work well with that. But also we wash our hands frequently, right? And if you want to know what to do you sing Happy Birthday twice while you’re washing your hands. Most people don’t wash anywhere near long enough, right? So soap and water, happy birthday twice. And also, we don’t know it, but we touch her face about 2000 times a day. Right? That’s crazy. And that does it. So washing your hands. Don’t touch your face. Those are and as you said, Don’t shake hands. No kiss on the cheek. Yep, you can’t be doing that.

Jason Hartman 17:57
Yeah, so listeners learn how to wash your hands. hands properly. Remember that the soap and water cannot disinfect what it doesn’t touch. If it doesn’t touch that part of your hand, the nail bed between the fingers, etc. It’s not doing anything. Most people just put their hands on the faucet really quickly. And you know, like Gary said, you got to be able to sing Happy Birthday twice. That’s how long you need to wash your hands. Clean your phone, your phone is incredibly dirty. It is scary germ carrier, stop giving your phone to other people to take a picture of you. Things like that. Don’t let other people touch your phone. Maybe we sound like we’re being a little paranoid. But one little safety step may prevent a literally a short lifetime of regret. You don’t want to take a risk here. But also when people talk, Gary, we can’t even see that little droplets are coming out of their mouth, and they go for about six feet. It’s almost impossible to stay six feet away from everybody but we What this does say is that in addition to the idea of wearing a mask, and I haven’t been wearing a mask yet, they do say that one of the benefits of wearing a mask is most people don’t know how to wear them. They don’t put them on properly. They touch the wrong part of the mask and it becomes ineffective. But the one thing the mask does do is it makes people get out of the habit of touching their face. The mask will help them avoid touching their face, it’ll help break that habit or help them realize how often they’re doing it. But the other part is the eye protection right you insurance in your

Gary 19:35
virus. Yeah. The masks are required in China. So we wear them we wear them anyways and you need to put them on correctly. As you said you need the metal band up you need to crush the metal band around your nose.

Jason Hartman 19:48
So it conforms so it fits around your rescue. You

Gary 19:51
need to make as good a seal as you can. But if you’re not careful, you may touch your face more but most of the people in America, the IRS Medical officials are trained to say don’t buy masks, because they’re not needed. But there is a shortage of masks for Americans. Yeah, yes, buying them does help. There’s a study, probably we could dig it up at any rate, they help. They help especially if you’re sick, they help but even if you’re not, if they’re worn properly, and you don’t keep touching your mask and your face to adjust the mask, right, they do work but everything we’re talking about, I want to emphasize there is no silver bullet. Yeah, my friend was bragging how he used hand sanitizer a couple times while he was in a tight closed space with a lot of people and your knots. I’ve given you a layered systematic approach and they have a layered systematic approach. Wash the hands don’t touch the face, properly adjusted mask put on the correct way. Safety glasses, but the biggest one is social distancing, which for somebody my age and I’m almost 69 years old. Self isolation just don’t go out at all right? If you can afford it and you’re over 60 you should not be going out at all. That is the best thing. All these masks and eye glasses are only for the emergency times you have to go outside receive packages or buy food. Yeah.

Jason Hartman 21:20
So yeah. So Gary, we want him to cover four things. Then we want to talk about the economic impact. So asymptomatic for a long time very contagious, because it’s asymptomatic lives outside the body for a long time, the complication rate extremely high, but you jumped to older people, and you’re 69 years old, and this is really scary. If you were to contract coronavirus. You’re saying that would be a 7% chance that it could kill you?

Gary 21:51
Approximately Yeah, that’s a one you know, for people that don’t know what percentage chance about a one in 13 chance of dying. So in other words, if I walk across st the 13th time I’m going to get run over by a car, I’m going to hide under my bed. So in this is all on website called World Domination calm, but nobody under the age of nine has died up to your 40s your chances of dying are still higher than the flu but not by much. But once you hit 60 as an example, 60 to 69. They estimate 3.6% but that jumps to 8%. between 69 and 70. By the time you’re at 14% that is a one in seven chance of dying. If you’re in the hospital, you have a one in seven chance of never coming out of that hospital again was a really bad odds.

Jason Hartman 22:50
Yeah, that was a very bad odds. This is different. This isn’t like the flu. Now, what’s interesting is I’ve been studying this, of course, the past couple of weeks, but I haven’t have been studying history and most specifically the Spanish flu, which happened just over 100 years ago. And what was interesting about that is they they estimate, it killed 50 to 100 million people. And about 675,000 of those were in the United States. It attacked healthy people between the ages of 20 and 40. The people that should have a very strong immune system and be not susceptible to this kind of thing, which was different than the Cova 19 threat, right?

Gary 23:36
Well, the Spanish Flu by the way, was only called the Spanish Flu because Spain was neutral. It should have really been called the Haskell county Kansas flu because it it really started where it started. Yeah,

Jason Hartman 23:47
I read I saw it. I know that,

Gary 23:49
but nobody wanted to admit it. And as you said, the death toll To put that in perspective, the Spanish flu, I call it the flu pandemic of 1918 killed more Americans than the casualties of World War One and World War two

Jason Hartman 24:03
combined. Wow, that’s a mom.

Gary 24:05
But it Yeah. And it attacked what happened there’s something called a cytokine storm where your immune system goes a bit crazy. It’s kind of like having a war in your lungs become a battleground in the lungs moves and

Jason Hartman 24:18
the lungs to fight the infection they filled with fluid. And basically people would drown in their lungs would drown. Because

Gary 24:28
Yeah, the immune system was killing so many cells. It actually killed the lungs which killed the patient. So what happened is, people with the healthiest immune systems had the most overreaction, and they’re the ones that died.

Jason Hartman 24:41
Right. Wow. That’s good. That’s just crazy. Okay, like

Gary 24:44
you said 100 million, by the way To put that in perspective, there was only 1.5 billion people at the time so that that may have killed Darren air 2% of the world or what is that? 1% of the world’s population?

Jason Hartman 24:58
numbers. Yeah. Unbelievable. Okay, so let’s jump to the economy here in a moment. But I did want to talk about one more health thing before we go to the economy and the economic aspect. And that’s the idea that this lives outside of the body for a long time. And it seems to like the northern climates in moist climates. Fortunately, where I am in Florida, the tissues of our noses, fight infection better when you get on a plane, or if you’re in a dry climate, it doesn’t work as well because the moisture disappears from our nose. So there are things we can do to offset that using a sailing solution or sailing gel. But Gary just talked about you you mentioned New York and Seattle specifically. And then the lives outside the body component.

Gary 25:49
There are some intriguing data, no scientific studies, but the data shows that besides Hong Kong and Singapore having very well developed healthcare systems to South Korea and Japan, South Korea has been absolutely slammed yet. Hong Kong and Singapore are barely over 100 100 cases not deaths, over 100 cases a very

Jason Hartman 26:13
small number for them. Yeah,

Gary 26:14
if you look at the world map, the thoughts are, the warmth helps deteriorate the virus. Humidity helps deteriorate the virus plus the nose as you said, Yeah, the sun has UVA and UVB comp.

Jason Hartman 26:29
Benefits about the sun. So number one, the well the UVA and UVB break down the virus but also it increases vitamin D production in the body. Right?

Gary 26:40
Well that’s number four. Number one and two are the heat and humidity degrade the virus. Okay, heat and humidity degrade the virus it likes cold and dry. So heat and humidity is not ideal for the virus. Number three is the sun with the UVA and UVB which breaks down the virus but the sun if you have short sleeves shirts on actually makes vitamin D too. So and this aside, these are scientific studies if anybody wanted there are studies that show that vitamin D and you can’t get vitamin D to any other way than the sun, but you can buy vitamin d3 which is about as good. I know we have a short time I recommend your users get vitamin d3 800 to 2000 international units a day. And that has been scientifically proven to lessen the chances of any viral infection.

Jason Hartman 27:31
Okay, good. Now it lives outside the body. We got to switch gears to the economy but the real scary part about this is that it can live on surfaces. It can live on clothing. You and your wife when you do go out which is rare now in Shenzhen, you have outside clothing and inside clothing. And when you come back in you shower and you change into your indoor clothing. How big is the concern about this living on surfaces Moving on clothing.

Gary 28:01
Well, there are a number of studies and most of the studies show five to six days on hard surfaces. But there’s one or two studies that say nine days on hard surfaces. So in addition to having our outdoor clothes and our indoor clothes before we take those clothes off, you could shake viruses that you breathe so we with the outdoor clothes on we give ourselves a light misting of alcohol spray, close your eyes, hold your breath. We spray ourselves down with a mist of alcohol, then we take those clothes off, then we go take a shower, then we put on the indoor clothes.

Jason Hartman 28:36
This is unbelievable. It’s like you’re living in a clean room. This is crazy.

Gary 28:39
And with all that, like I said there’s no silver bullet, there’s a layered protection and all it does is reduces the risk. The only way you could really save it is stay in the house except there’s the you know, we live in an apartment. There’s people our balcony is six feet away from the one below us and the one above us. So the princess Cruise Lines had a common air conditioning system and 28 or 29% of the people on that ship got infected.

Jason Hartman 29:06
Yeah, yeah, well in quarantine Cruise Line stock is just plummeting. I think we’re gonna see a lot of Cruise Line bankruptcies. You know, in the too distant future here. It’s very sad what’s going on there. Okay, the economy. You believe China, just anecdotally from looking at pollution, photos, air pollution, photos, you can tell how much the economy is doing by the pollution, right? You know, that literally is a litmus test a barometer for how much production is going on an economy. When the economy is booming. There’s more pollution because there’s simply more production. And you can also tell by looking out on the streets from your apartment in China and seeing how much activity looking on mass transit, you know how many people are going to work. A lot of people been told to work out of the house, but you can’t do that. If you’re in manufacturing, you need to show up at the plant and you believe that the Chinese economy, the workshop of the world is running at about 50% capacity now, right?

Gary 30:06
That’s some of what I’ve read. And some of what I see different provinces may be different we we haven’t had, as I said, infections and weeks I know of two factories, one large that has thousands of workers and another one that has hundreds, the one with thousands has been working three weeks with no infection running through the place. And the one with hundreds has worked successfully for two weeks without any infections. And we happen to know some people at Foxconn. And they’re also working evidently without problems. So all that’s good people or everybody last week was waiting to see what would happen you know, you’re dipping your toe in the water. I think this week, you’re going to see another step up again, with economic activity.

Jason Hartman 30:51
So in other words, moving back in the right direction, right?

Gary 30:55
Correct. Okay, we’re coming back up to speed is my feeling okay? People are still working at home, but they’re getting work done. Okay, we’re working at home and we’re getting work done.

Jason Hartman 31:05
And you say that because China I mean, there are some efficiencies about having a one party government. China’s not really communist. That’s kind of a misnomer, but a one party government that has a lot of power, which the government there does, its efficient. So you believe they’ve really broken the back of the contagion, right?

Gary 31:25
Yes, it can be efficient, and I’ve lived here almost 10 years and it has been efficient. Yeah, they absolutely. This thing was more or less out of control by by January, it had everyone’s attention. They had their normal Spring Festival. It’s like this huge for our new year’s show. There were subtle hints that the show had been scaled back January 25. New Year’s Day, the hammer dropped, everybody quarantine. Everybody had to have a mask on to go outside many villages, took the whatever you want to call it the law of attraction in their own hands. They have Actually bulldoze dirt over roads in and out of the towns. Everybody did the smart thing. Everybody was so

Jason Hartman 32:06
so they bulldoze dirt over roads. So people couldn’t use those roads, right? They quarantine the towns?

Gary 32:13
Correct? No One No One No. And these are villages that are probably a lot of farming. So they were mostly self sufficient. We were self quarantining before a lot of the edicts and chins and everybody I know, was talking to each other. Everybody has WeChat here. Everybody has phones. Everybody’s talking everybody. What are you doing? What are you doing? We were all doing all these things before the government edicts ever came down. They just lended a force to it for the few people that were kind of psychopaths out there. being irresponsible and they ended up in quarantine center jail, whatever just like in Italy right now, by the way. Oh yeah. three month jail sentence if you try to break the quarantine. Wow. That’s that’s On

Jason Hartman 33:00
the I mean, Italy has quarantined a quarter of the of its country of its entire population. It’s absolutely crazy. Wow. I mean,

Gary 33:10
wow, China at its worst, I mean, they had quarantine 700 million, but it never really left to Bay province. It never really got out and, okay 55 million people is a lot. But there’s 1.4 billion that’s got three or 4% of the whole country. So China was able to send that just you don’t want your hospital systems overwhelmed because we talked about the case, the complication rate is very high 15%. If those 15% can’t get on a ventilator and can’t get oxygen, that 15% complication rate no longer becomes a 2% death rate. It becomes a 15% death rate and almost certainly that’s what happened in Ohio because the death rate nobody He has final numbers yet, but the death rate outside of who Bay province is 0.6%, which is still 10 times the flu By the way, still 10 times the flu, but way better odds unless you’re old. So you don’t want your hospital systems you have to use the extreme quarantine measures to shut it down. And then you gradually open things up again. And then you don’t overrun your hospital system, and then you make it and you’re good.

Jason Hartman 34:31
All right. Okay, so China plays a big part in the world economy in the sense that it provides a lot of lower level components for manufacturers that need those components to finish the entire widget, you know, that economic widget, right? Tell us about some of these. You’re thinking on some of the economic supply chain around the globe and China’s part in it, whatever you want to say about that.

Gary 34:59
I’ll go with it. Acknowledge and we’re a very small company here. We have less than a dozen people. So

Jason Hartman 35:04
you’re an engineering company with offices in Southern California, in Shenzhen. And I believe you had an office in China in Ireland, right? Or do you still have that?

Gary 35:14
Yeah, Ireland, UK, America and China. So, so you’re in four countries Got it, okay. And we make test equipment, which would basically be capital equipment used for manufacturing electronic goods. That’s our business. And a few of my factories were not my factories, but we have machines so we know people there we have friendly relations with those people. So one of those factories as an example makes the control boards for white goods washing machines, clothes, dryers, dishwashers, refrigerators, for brands everybody would recognize all over the world. They manufacture a number of circuit boards for very well known company that makes printers off office supplies and they make dozens of other products that are mostly circuit board oriented that are lower level parts of an upper level assembly for all companies all over the world, and as an example, if they’re not working, the final assembly of washing machines, dryers, refrigerators in America and Europe is going to stop because they don’t have a key part. We have another company that’s smaller, it makes a very small I’m sure low cost component that goes into a motion controller that could end up in hospital beds, aircraft, industrial equipment, very simple board. But if that company doesn’t have it, it can’t make its motion control devices that end up in potentially dozens of other customers. So I saw the number China’s like 28 or 29% of world manufacturing output which is pretty amazing in itself, but It makes most of the components that go into these other assembly. So I know for a fact there’s already three auto companies that had shut down because they were lacking components out of China that was just in the news. Nothing proprietary.

Jason Hartman 37:15
Yeah, very interesting. Gary, sum it up for us. We’ve got a run. But this has been very interesting. This is a black swan event. And you know what, it’s gonna be fascinating to see how this all pans out as spring hits, you know, the northern hemisphere. Let’s hope that immune system strengthen and the impact isn’t that bad. Any closing thoughts on this?

Gary 37:37
Yeah, final thought I still have a position in real estate in America. I do have a business there. I have essentially no leverage so I can take a huge hit. So I know, you know, everybody likes leverage, but people need some savings for a rainy day. That’s my feeling.

Jason Hartman 37:54
My point is just save that money outside of the property. You know, we’ve had this discussion a million zillion times. Yeah, we don’t need it. I wouldn’t. I love the leverage. You know,

Gary 38:04
I’m at the age I am. I don’t need leverage, I need income. But you’re right. If you’re younger, keep the money outside make sure you probably have enough to pay at least three months of expenses gonna be my feeling.

Jason Hartman 38:16
Yeah, I agree with you at least 4% of the property value for each property you buy or 4% of your portfolio value in cash. Yeah,

Gary 38:25
it especially if you’re in the northern latitudes of America, keep an eye on the daily figures. The virus at the moment is doubling about every six days in America, just like it has anywhere everywhere else. Once that hits into the thousands next week, if severe corn teams are going to be imposed, you really need to think about maybe having 30 days of food on hand or at least some rice and beans because you might not want to go out you’ll probably be able to go out and the supply lines will probably stay there but you’re not going to want to go out you’re going to want to be outside Especially if you’re over 60.

Jason Hartman 39:02
Yeah, good advice. All right, Gary, thank you so much. Be safe, be well, and we’ll talk to you soon.

Gary 39:09
Great, Jason. Thanks a lot, everyone. Same thing. Be safe there. Take it easy. Keep an eye on the numbers.

Jason Hartman 39:17
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