Jason Hartman answers investor and listener questions on tax liens as an interesting business right now. He gives his thoughts on supply/demand shock giving examples like airline prices, webcams, and the housing market in cyclical areas. Jason brings on Harry Dent as they discuss gold, cryptocurrency, and inflation. Specifically, asset vs consumer inflation.
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 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. And now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 0:54
Welcome to Episode 1488 1488 Remember, since we did bonus episodes last weekend, we will have our 10th episode show on a different day that will appear on Monday, rather than later in the week, as it usually does. So it gets a little out of order. Don’t be confused, not that each day, whatever day it lands on matters, but just in case, just in case. Okay, we’ve got part two of the rant from Harry dent, as we did just a little part of part one yesterday. I think you sense that Harry really had some very strong opinions. And, you know, he is just a super interesting economist. Certainly like every economist, he’s made some predictions that didn’t come true, but you know, he’s also made some that really did come true. And some that came true, just a little bit late. So he’s an interesting guy, no doubt about it. So don’t let some predictions that didn’t come through, turn you off because I know Notice that some people get that way about this person, that person, this economist that economists, you can still learn a lot, just by understanding the underpinning theories that create the thought See, sometimes we are out in the world and we don’t even consider a premise, a foundational belief system. And then someone comes along and economist, a thought leader in whatever topic and gives us that idea, and maybe they draw the wrong conclusion, or they don’t consider another extraneous factor and their prediction doesn’t come true. But are you better off for having another tool in your toolbox? Another way to think about a possibility of course, you’re better off. So this is why I listened to and read a lot of opposing beliefs. Okay. Listen to all sorts of stuff. In fact, I have guests on the show frequently that I think they’re out of their mind. Okay, next week, you’re going to hear from a Marxist professor who calls himself a Marxist. And it’s going to be interesting. Trust me, it’s going to be interesting. And I got to tell you, probably the only interview I have ever actually prepped for was my first interview years ago with Bill errors. Now, you’re not gonna find me agreeing with Bill errors on much of anything. But I gotta tell you, that was one of the most interesting shows I have ever done. There’s a lot you can learn from a lot of people just by their thinking process, even if their prediction did or didn’t come through. And, you know, sometimes they do sometimes they don’t, but the idea is to gain more tools to gain more reasoning power. And by hearing the way Harry dent, for example, lays out his reasoning, sometimes it enhances our thinking to stop That’s good. Let’s see if we can get one or two listener questions before we get to Harry. I promised Josh, our producer, this intro would be really short, because we have a lot to cover on the Harry dent side today. And I might be about to break my promise, but here goes, Okay, so James, all teacher, yes, that is the famous author and thought leader, James, all teacher who’s been on the show a few times before, and he actually submitted a listener question. The question from James all pitcher is, do you think tax liens might be an interesting business right now? What do you think about buying them? will people be relinquishing their properties without much of a fight? And I think what he’s referring to is back during the Great Recession, how people just walked away from their properties, and many people could easily afford to keep those properties but they did what we talked about many times, known as strategic default, millions and millions of people did this Look, that’s the bargain. That’s the deal. You don’t want to pay your property taxes, you don’t want to pay your mortgage, then you agree to relinquish the collateral. That’s the deal you make with the lender with the tax collector, etc. So I don’t know that this is going to change to a great degree, James, and I don’t know yet, if it will. Here’s why. It depends where so in the densely populated cities, like where you live in New York, I think there is going to be a terrible compounding economic crisis. New York City, downtown Chicago, downtown Miami, downtown Boston, Los Angeles, San Francisco, Seattle, San Diego. I don’t know I’m sure I’ve missed some here, right, any high density area where it’s also in a cyclical market those markets It’s the when you’re looking at a chart, they look like a roller coaster. Glorious highs, really ugly lows. Those are the markets that get all the news, get all the media attention. But there are some of the worst places to invest because it’s always religious gambling and speculation. It’s not true investing. I do think in those markets, there will be a lot of foreclosures. And you could pick up tax liens or and turn them into tax deeds and maybe make some money. We’ve done some shows on this in the past, be careful. As many of you know, I really got ripped off pretty badly by a tax lien promoter. And I can’t say too much about it right now because the outcome is yet to be determined. And also in the business of flipping properties and selling homes to investors and stuff like this. But you know, one of their product lines is tax liens and tax deeds. And then we have my friend Julia Spencer on the show just recently again, she was back talking about tax liens and tax deeds. So, yes, like anything, there is definitely opportunity there. The problem is that I don’t think the vast majority of those opportunities will present themselves in the ideal areas in which to invest. I think they will be presenting themselves in declining areas that are now declining for a much different reason than during the Great Recession, during any that recessions before that, or even the Great Depression. This time, it’s the combination of that one two punch of a pandemic, which is a we haven’t had this in 102 years. Yes, we had some little ones, but they didn’t really affect us like like this one, obviously. But the Spanish Flu was the big one. And that’s just too far back. We can’t evaluate something from 102 years ago very well. And then we have the economy and the business cycle that was probably due to correct answer. Anyway, so we kind of got this one two punch this time. So we’ll see what happens. So if you buy tax liens and tax deeds, if you do it in good linear markets that are low density suburban areas, like the ones you’ll find at Jason hartman.com slash properties, then I think you’re fine. But then you’ve got evaluate the deal individually, and make sure it’s a good deal and you got to know what you’re doing because there are a lot of complexities in the tax lien and tax deed tax sale business. By the way, due to popular demand. I think we are going to run our webinar again, on tech sales and tax sale overages. So look for an announcement about that we’ll probably bring that back. And by the way, I’d love to get some feedback of those of you who signed up and took the course and really decided to check that opportunity out. We are going to be talking a little bit about not just real estate investing in the future here as we go through this crisis economy. We’re in this pandemic economy about Some opportunities to actually generate income, usually related to income property, but not our typical plan. So like the tax sale opportunity that I just mentioned. So you’ll see a little bit more of that from time to time, like you saw during the Great Recession. Listeners asked for that. So we’re doing that. Okay. So a related question comes from Britt burns. And Britt says, Dear Jason, I saw your interview on Ken McElroy show Ken McElroy, of course, it’s the Rich Dad Poor Dad, advisor, Rich Dad advisor with Robert Kiyosaki. He’s been on our show a few times I’ve been on his show. And so Britt says Dear Jason, I saw your interview on Ken McElroy show. I found out about you a few months ago through George gammon. My question is you mentioned on Ken show that you were seeing a quote supply, demand shock, unquote, in the airlines right now, due to there being less planes being used, fewer routes, routes being canceled, been adding that Then you mentioned this will hit the housing market. But a few moments later, you mentioned there will be massive foreclosures. I’m trying to figure out if you were implying that home prices will remain high because of the artificial shortage, or if they would drop due to massive foreclosures. To give you a point of reference. I’m thinking about homes in the suburbs of Los Angeles. Thank you, Britt. Britt, that’s a great question. So as I wrote you back in that email, you know, basically the same thing applies is to what I just said about a James all teachers question. The question is, where is it a densely populated cyclical market, cyclical markets, that we’re going to correct any way that we’re already softening, that we’re already in trouble. All of those high flying markets, the West Coast of the United States, so from San Diego on up to Seattle, and really up to Vancouver, Canada, even which is an absolute disaster. The poster child for overinflate It’s cyclical market would be Vancouver, Canada, beautiful city, but ridiculous real estate market. And then South Florida and the expensive Northeastern markets, all of these markets are going to see massive foreclosures, because they don’t make any sense. And add to that the social distancing problem in the high density living that nobody wants anymore. So I do think there will be significant foreclosures there. The supply demand shock issue comes in, and I use the airlines to illustrate that. And I talked before on the previous episode here, about how I researched prices at the beginning of the quarantines and lockdowns. We saw airline prices for ticket from Miami to LA, which is sort of a typical ticket that anybody might buy. I look that up and then I looked at the price history of it. And what you saw is as we went into the lockdowns, but there were still lots of routes and flights weren’t canceled in any great degree. We saw prices plummet because there was no demand, there was massive demand destruction, yet there was a lot of supply. So the prices dropped dramatically. And that ticket from Miami to LA got to about $50. If you could 50 bucks, Miami de la and it was normally hovering around $330. Then went down to 50. Then it went way back up, and I can’t remember the price. I think it was like 400 and something dollars because the airlines cancelled a bunch of routes and parked their jets on runways and in jet parking lots in New Mexico or something like that. So that is an example of supply demand shock, a rare economic malady that we saw in the 1970s dramatically and the misery index was was really talked about a lot back then. It was the Jimmy Carter era. It was bad, bad, bad. It’s miserable. supply demand shock, not a good thing. How does that affect the housing market? Well, first, when the lockdown started, we had demand destruction. But then we had supply destruction, like immediately after that, because think about it. A lot of the ingredients of the house come from China, guess where those doorknobs are made and those hinges are made and those cabinet doors, a lot of them and the electrical outlet sockets and the dome lights in the ceiling, and those recessed lights in the ceiling. A lot of this stuff’s made in China, and China just shut down for a few months. And so you had supply shock. And when you have supply demand shock, it’s a kind of a miserable environment. And we’ve even noticed this ordering things on Amazon, things that used to be here the next day. or the day after, or three weeks out with all this home office stuff. Try buying a webcam now. Just go look it up online. I talked to Logitech because we’ve got our upcoming meet the Masters virtual conference, and I wanted to get a new webcam. And Logitech says that the webcam I wanted is a 16. Week wait 16 weeks. Now in the old days, I wouldn’t have thought that was a big deal. Or in a communist country. I wouldn’t have thought that’s a big deal. We’ll just be normal. you’d call the Commissar of webcams. And yeah, you got to wait 10 years for your webcam, right. That’s how it was. But you see, there has been a huge disruption in the supply chain. So it’s really weird. We’ve all become spoiled. We’re used to getting stuff the next day. It’s just this webcam is just a typical consumer product. No big deal. You should get it the next day. They have tons of inventory of this stuff usually, and it’s just immediately delivered. Not anymore. Just go look it up. Go try and biologic Logitech webcam online. Good luck. The ones you’ll see that used to be $59 are being sold by other sellers for $238. So that’s a great illustration right there of supply demand, shock. It first no demand, then no supply. There you go. All right. Hope that helps. I hope that answers your question. Britt, and James, all teacher appreciate the questions. We will have a registration page for Harry dent soon. We’ve got a couple webinars running for you, as well, and you can look for the links in the shownotes for those and we are here for you. Jason Hartman comm one 800 Hartman. Here’s part two of Harry dent on a rant rant rant rant.
Jason Hartman 15:51
Here, you mentioned gold earlier and I just I don’t know if I’ve ever talked to you much about I’m just kind of curious your take. I have a feeling I know what it is. But I won’t say it’ll let you You say, what do you think about you know, cryptocurrencies Bitcoin? What is Harry 10? Think about that. I don’t know if we’ve ever talked about it.
Harry Dent 16:05
Well, slightly different things they’re supposed to be the same in crypto could eventually be the digital gold as a standard for money, but they’re nowhere near that. Number one, I’m going to start with Bitcoin and cryptocurrency they’re in what I call the hype phase, the same place the internet retailers like Amazon and the new.com. Those all those surged at the end, at the very end of the last tech bubble between late 98 and early 2000. Gave it most of its own companies valued AOL, which actually had real sales and earnings. Most of them have done right at 400 times earnings.
Jason Hartman 16:43
possibility and zoom is about a
Harry Dent 16:47
billion dollar companies with no sales or very little sales in losses. So that’s the hype phase hyped up, and then they busted 95% tech stocks went down 78 and that big crash, they went down 95 cryptos the same thing. They’ve had a great bubble bigger than the internet bubble, not in capitalization but in size of the bubble but but up there. And I think they’re going to crash. You don’t know that the kryptos gone through this hype phase, Bitcoin and all these companies until you see a lot of companies. A lot of companies fail like the internet’s did in the early 2000s Yeah, that hasn’t happened yet. So I keep lecturing to crypto conference, they say oh, Harry, you’re right about this big crash just going to usher in the digital currency age people gonna not trust currencies day after that, after that, you guys are the biggest bubble and you’re going to burst the most Now what did we just see in this crash? What what went down more than stocks? Bitcoin? Hmm. Yeah, stocks went down 40% whereas Bitcoin went down, like 50 some percent gold did what it did in 2008. Went up now just I’m talking just the early stage of this crash. The first several days went up a little bit. Oh, money printing, you know, and then when the crash hits, it goes down 12% Gold ended up down. It was not the hedge to the stock. What went up treasury bonds high what I’ve been saying highest quality long term bonds, like the falling interest rates the deflationary side and don’t have default risk, like a lot of corporate bonds too. So crypto did the worst. And I’ve been telling the crypto people, you’re gonna have the biggest crash when I’m right. And then you’ll be the next big thing. Because internet had the biggest crash. Amazon went from 666 back down to six. And now 20 415 years later, greatest boom in history. I mean, one of the you know, yeah, they were internet was the next big thing but it had to go to a shakeout first because it was it was mostly baloney. Yeah, yeah. You know,
Jason Hartman 18:44
pets or pets.com sock puppet. No.
Harry Dent 18:48
Gold is not the safe haven. I’m sorry, sorry. It’s not the worst place to be. And in the first crash, it only went down half as much as other commodities. It was down 45% When other things are down 70 8085 for oil next time is going to be down a little more on my targets 952,000 that’ll be a lot better than silver and other metals and other commodities they’ll be down 80% Plus, but it’s not going to be your hedge why gold correlates with one thing and better than any other probably investment in the world. It’s easy to buy inflation. Yeah, sure. Gold likes inflation, but gold bugs are stuck on the last crisis from 6882 when we had an inflationary recession inflation up right the economy now stagflation right at mine. Yeah, right in my summer season for the economy that was predictable to happen. So here we have a deflationary Why are they printing all this money they have to constantly print money to keep the economy from falling into place. And deflation happens when asset bubbles burst like stocks and real estate where people have a lot of money tied up and money disappeared. And when debt fails and is restructure which is another way money disappears when money disappears less money chasing the same goods and financial assets everything goes down sure financial assets the most but consumer prices go down as well right? So gold is going I think very is keeps edging up while bond yields are going down bond yields are going down after this recovery from the crash saying oh I see weakness from this virus and it is going to be very useful stocks are now finally getting some reality oh yeah what were we thinking? We’re gonna go right back to normal stocks on the NASDAQ got near its highs you know what eight or 9% from its highs that’s absurd with what’s just happened. So stocks are going out goals still ending up thinking yeah, but they’re gonna print print print print, but they get goals. gotta remember 2013 12 to 13 transition, print print print. Japan was the first go to what I call unlimited just, you know, printing off the charts and printing kept going down the gold bugs finally had to admit, oh my gosh, money printing doesn’t necessarily cause inflation oh my god Milton Friedman was wrong when he says it’s entirely a monetary phenomena, which I’ve been saying for years. So I think that’s what’s gonna happen here. I think gold is going to follow bond if I want to look short term at the economy Do I look at stocks gold or bonds I look at bonds bonds are the most sensitive to short term risks. The bond market is saying I see things going down and in fact, the I just got a chart from a friend in Australia, the 30 year treasury bond the speculators not the commercial not the smart money the speculators the broad investors are the most bearish on 30 year treasury bonds, which says they think inflation and interest rates are going up. That tells me it’s going the other way. Harry, I want to go the other way. Gold is going to do poorly if
Jason Hartman 21:54
money printing does not cause inflation and Friedman statement about it’s always a monetary phenomenon. We all goes out very well, then what does cause inflation?
Harry Dent 22:03
Okay, first of all, the primary cause of everything I looked at is people not government policy, short term and reactive first rate. in history, baby boomers entering the workforce, how much it costs to raise a kid, and how much $250,000 governments have to find education as part of their budget as well as other things. And the last people to invest in these people are businesses who hire them when they don’t know they’re asked from a hole in the wall, okay. And they’re 18 or 20 or 22. They need an office, they need equipment and they need training. I have an indicator called workforce growth on a two and a half year lag. That is the best correlation with short term and long term inflation. people entering the workforce at great expense, two and a half year lag because it takes about two and a half years get out before they start to produce more than they’re costing to those last businesses that invest in So that’s the prime cause. But for short term inflation or money creation, there’s two ways to create money and this is important. I had two great economists and they just agreed on this. The two my two favorite one, david stockman and Dr. Lacey hunt. They’re both brilliant, but they disagreed on one thing. Lacey Han was saying, hey, the only way to create money Milton Friedman style is banks multiply bank deposits, we deposit money, businesses and banks can lend 10 to one against that only pledge 10 By the way, not their deposit. And that multiplies money. So in a normal economy, that’s how it happens. economy’s good. Businesses, consumers want to borrow money to buy things houses or business capacity, then multi money multiplies with supply factor. And then if those loans keep being paid back and continue to happen, that’s sort of expansion can cause consumer price inflation. Now what has happened since 2008 and nine We had failed demand, we had a excess capacity, a downward economy, nobody wanted to borrow, putting interest rates at zero did almost nothing. So what they did was they printed money and put that money into buying financial assets. Now, they tend to buy treasury bonds and asset back mortgages, which are Treasury related. But that doesn’t matter. new money printed out of thin air is coming not into the banking system or to consumers or businesses as it is recently into financial assets, more money chasing what the same assets, which includes stocks, and everything, and gold and even real estate and real estate investment trusts and all types of bonds. So what we’ve had the gold bugs, we’re saying all this money print is going to create inflation. No, it created financial asset inflation, right.
Jason Hartman 24:48
So inflation versus consumer price inflation
Harry Dent 24:51
versus consumer inflation. That’s the bubble right. That’s the bubble and it’s huge and you can compare this to the 19th 29 bubble, which was primarily stocks, people didn’t speculate and real estate didn’t borrow. So this a whole nother thing, what’s gonna kill the Fed? I had Ray Dalio, the most successful hedge fund manager in all of history, stand up and say something stupid. You know?
Jason Hartman 25:17
He’s been saying a lot of things lately. I don’t agree with but Yeah, go ahead.
Harry Dent 25:21
Yeah, he’s saying I’m not worried about that. He’s saying we’re at the time. He said he’s got a six to seven year debt cycle and a long term 75 to 100. Well, I’ve got one too. It’s called 90 years. I’m a much more accurate about this 90 years, right down to it. He said, but I’m not as worried about this crash coming off this bigger cycle, because the debt ratios are not as bad as it really this is not the problem. The biggest financial asset bubble how much money just got trashed by one stock crash globally, about $20 trillion. That’s 100% of us you GDP, that’s 25% of global GDP disappeared in five weeks evaporated.
Harry Dent 26:06
So these asset bubbles can deflate, which means money disappears much faster if you for depths to deep play and D leverage, you got to go through chapter seven or chapter 11. And that takes some time and bah bah, bah, bah bah bah.
Jason Hartman 26:20
And then we’re going to see a lot of app.
Harry Dent 26:22
This is way worse than the debt bubble, which was the primary cause of the 29 crash. This is a financial asset bubble that is absolute bonkers. And people are treating me every time I interview some mainstream economists or person, they’re like, hey, you’re crazy. You just predict extreme stuff that you think I created this extreme period. This is the greatest bubble in history and bubbles burst faster than they build greater than anything else in history. I’m not creating this. I’m just reporting on it. I’m there acting like I’m the crazy guy. I don’t know one of the few same people on Right now, Warren Buffett doesn’t see a problem with this clap. Mm hmm. What does that tell you? Warren Buffett
Harry Dent 27:07
says everything’s okay. except he’s not buying stocks right now. I know he’s
Jason Hartman 27:11
sitting in cash. Yeah, hugely, very interesting. You know, Harry, we got to wrap it up soon. But you’ve written a lot in your books about real estate and migration trends and things like that. And I remember a long time ago in one of your books, I read about Ashland, Oregon, and you talked a lot about that and how that was gonna be a hotspot. And I actually traveled there just because I was like, I got to see what Harry’s talking about. You know, that’s, that’s how much influence you have. And I think there’s going to be a major migration trend out of these high density living environments. And I’m calling it the rise of suburbia. I think suburbia is coming back in a big way.
Harry Dent 27:49
I call it XRP. It’s like beyond XRP. I mean, Bend Oregon, and I mean, they’re not they’re far away from a major Metro But you can still get there and fly easily, you know, quickly in this online world, which we just been kicked into deeper. I mean, look at me, I’m in Puerto Rico. Now I’m in a city at two and a half million, so I’m not in the sticks. My Island property is in the sticks, okay. 35 from here, but I can do business from here, right?
Jason Hartman 28:19
Harry Dent 28:21
want to live in a place like Ashland, Oregon. I’ve got a good friend in Miami, who is a real estate kind of developer and speculator. He moved there to take over his mother’s house and he and his wife stayed Yeah, right. Much better lifestyle much affordable. You know, they stayed, they didn’t go back to Miami.
Jason Hartman 28:40
State were in Puerto Rico. I was just using it. As an example. The Ashlyn is not the thing, it’s just an example because he wrote about it years ago, you know, like 20 years ago, but this idea that people do not need to be in these big cities anymore. They’ve always had this attraction and now both employees and employers have realized they can make the work at home thing work. The remote work thing does work. I mean, listen, we’ve done it for eight years, we gave up our last office in Southern California eight years ago. And it has advantages and disadvantages. But most of our people, they love working at home. And now you can get a better workforce because it doesn’t matter where they’re located. It’s geographically independent. So you really have a bigger pool of candidates to pick from.
Harry Dent 29:30
But there’s a bigger range for me. I’m in San Juan, my vacation places a 30 minute flight 60 miles away, okay, I go there and vacation, I couldn’t live that’d be bored to death that is more remote than Ashland, Oregon as far as a small town, nothing to do. So I have the city life. But like you say, even if I wanted to be in New York City, why would I need to go to work every day into an office and dress up and get on mass transit and waste all the time. Why not? I do that a couple times a week and then work the rest of time from home. So I I want to be in a big city hybrid model because I want all the restaurants and activity, I don’t need to be in a big city to work, right.
Jason Hartman 30:06
But if some of that evaporates, the Broadway shows evaporate, the restaurants evaporate, and the cost of living and the taxes are so
Harry Dent 30:15
why be in the
Jason Hartman 30:16
city, there’s just really not a compelling reason to be there. So I think suburbia is coming back. So the question is, if you’re a real estate investor, which will be the stronger trend, the smaller economy that we’re coming into, and the economic hardship we’re coming into, or and we’ve already began that, or the migration of people with a lot of money to spend out of these expensive, densely populated areas, into suburban properties. And, you know, that’s, that’s what our people haven’t been investing in. I think it’s gonna be a pretty good strategy. And America’s gonna be on the move. The world’s gonna be on the move, but
Harry Dent 30:55
I mean, the bubble alone dictates the greater the bubble, the greater the burst. Where’s the most bubble Cities Manhattan. Yeah, San Francisco. San Diego over I am Coover, Toronto, a Sydney and Melbourne and Australia, the densest cities. So they go down the most and yet, particularly wealthier people are going to tend at least some of them are going to migrate out and that’s just going to feed that downturn more. Another sector that’s going to get killed always does commercial real estate. Oh yeah. People are emotional about the real estate and don’t sell their house or businesses will abandon the lease or sell an office building overnight as it makes economic sense. So commercial always gets hits harder. So high end real estate, commercial gets hit the hardest. mcmansions get hit harder than everyday suburban home the everyday suburban, affordable home is both attractive now to the new millennials coming up the new wave who still haven’t bought a lot of their houses yet grab money for two and retiring baby boomers who don’t have the kids and want to die. downsize, they just needed to three bedroom house and yes, they even less need to be in the city right? They can be in a nice quiet supper. So those are the best houses to buy in the downturn. The best houses to keep an eye I’ve been working with a guy in Arizona, that’s training people to take over overpriced mean mcmansions when they collapse and turn them into assisted living things because large houses will be useful for small assisted living facilities in suburbs where people would rack
Jason Hartman 32:29
that’s probably my friend Jean. I know him. Yeah, yeah. So the thing about that is I kind of wonder because, you know, the the assisted living homes have been such hotspots for, you know, high death rates and infection rates. And I agree that the size of that the smaller home you’re in, the better chances you have of survival. But I even think I think there’s going to be a trend really toward multi generational living, which is, you know, very common around the world. People
Harry Dent 32:58
may keep a McMansion They can be
Jason Hartman 33:01
parents, but it doesn’t really have to be a McMansion. It can just be, you know, a suburban four bedroom house or you know a house with a casita in the back. Not even a McMansion. It’s just a
Harry Dent 33:12
nice one of the things I think the way I think, yeah, because the high end is so much more overvalued. Then why would you buy an everyday suburban home when you can buy a McMansion with two or three extra bedrooms and a bigger lot? A lot? You could house your parents there instead of having them in assisted living. Yeah. By the way, nine to 10 grand from our experience. Yeah, month.
Jason Hartman 33:33
Yeah. Yeah. It’s it’s very expensive. And I think the insurance is going to be tough to get on those. Because the infection rate problem and just in general, the insurance industry, having so many problems, I mean, there’s a massive wave of claims coming at the insurance industry. And we’re going to see a lot of problems with insurance real soon, too. So. So yeah, I think multi generational living roommates splitting up getting their own houses. They need that Extra
Harry Dent 34:00
families may live in one big mansion at 20% more of the price but you split that you’re both saving money. So yeah, I again, but
Jason Hartman 34:07
that’s the opposite of the two single people as roommates in a two bedroom place. Yeah, because now they need that second bedroom for home office. Okay. And
Harry Dent 34:16
with all of these are good changes if we use our real estate better if we save money on certain things or commuting, I mean look in pollution levels have just disappeared, a lot of flying, and traffic congestion. These are the two biggest problems.
Jason Hartman 34:30
And a lot of ways. Yeah,
Harry Dent 34:31
this is a big one. When I see this, why I love change. People hate change. I love change. Change makes things better. It can happen too rapidly sometimes, but this is going to be a good thing. I’m just warning people as you know, Jason, this is going to be a major shock more than anybody’s ever going to see in their past lifetime because you weren’t around in the early 30s right or going to see in the future. financial asset stocks are gonna end up falling 80% or more real estate in the US 42 50% more than last time, high end real estate is even gonna call the one true money. Yes, that’s gonna fall and people gonna be in shock. This does not have to happen. These are predictable things. We’ve got this first crash 40% exactly what I predicted it would be, we’re getting we’re in this four or five, six month rebound, which is typical, where it’s choppy and won’t go a lot higher, but stocks will hold up in hope. And then we’ll fail again and we’ll go into real de leveraging or being profitable.
Jason Hartman 35:30
You know that
Harry Dent 35:31
people don’t, people don’t prepare for the next. It’s alright, if you got whacked 40% because it’s already you’ve already gotten half of it back, you know, to make it a little better. What’s going to be the crime is if you don’t see this and get ahead of the next one, because the next one’s going to be much deeper and longer and it’s going to be a once in a lifetime threat to your financial assets and business. But it’s also going to be a once in a lifetime sale on financial assets and businesses and business assets on the Bottom, if you do get out like Joseph Kennedy, or you do hunker down like General Motors in the early 30s, and pass your competitors, General Motors past Ford forever to become number one in cars for the first time, and then became number one in global corporations that largely was made by its handling of the 3032 crash.
Jason Hartman 36:22
Yeah, the world’s first billionaire came out of the Great Depression, Jay Paul Getty. So there’s a
Harry Dent 36:27
sense of Kennedy. He was a multi millionaire bootlegger came out ultimately a billionaire political dynasty. Same thing. That crash he got out of the top, reinvested when businesses are selling for 80 to 90%. Off that’s a sale.
Jason Hartman 36:43
That’s what Jay Paul Getty was doing. He was buying up oil companies.
Harry Dent 36:46
The mafia made more money than anybody in the Great Depression. Yeah, they were loan sharks at 20% with high cash flow from the bootlegging roaring 20s and then all the businesses that didn’t pay him. 20% failed. They just took over at the bottom and owned it half of New York and Chicago,
Jason Hartman 37:04
right? Well, you know, the saying recessions create millionaires and depressions create billionaires. So we will see how it goes. But I agree with you, there’s a lot of opportunity, a lot of good things that come out of this, Harry, give out your website,
Harry Dent 37:17
Harry dent.com. So we have a free daily newsletter you can get on to get to know us if you don’t already know us and of course, and we’ve just split off from our marketing company we used to work with so we’re pushing our whole new letter with a monthly from me and from Rodney Johnson, my partner both under the same roof for a very attractive price so you can get on our full newsletters, but you can be on our free newsletter as long as you want to, to get a feeling for whether we make sense or not. And I think you’re gonna find in the next several months, we’re gonna make a lot of sense, but I’m telling you, nobody else is right now.
Jason Hartman 37:49
Good stuff, Harry dent, thanks so much for joining us.
Jason Hartman 37:58
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