On this Flashback Friday episode, Jason Hartman plays various clips from economists and thought leaders. We hear from Paul Harvey, Jim Rogers, and Ron Paul on a variety of topics. Jason discusses commodities investing and how it is related to real estate which is essentially packaged commodities. Then he discusses the Fed, inflation, and trading fake dollars for real assets.

Investor 0:00
I’m not an expert in the field in any way, shape or form. I’m not an expert in investing at all, but his group of counselors has great expertise and good advice and has helped me along the way as a beginner with not a whole lot of money to work with from the start. And so far, I’ve got those six properties in about three and a half years and I’m pretty happy about it. And it’s all because his team of experts and just his knowledge and his time that he’s been doing it.

Announcer 0:24
Welcome to this week’s edition of flashback Friday, your opportunity to get some good review by listening to episodes from the past that Jason is hand picked to help you today in the present and propel you into the future. Enjoy.

Announcer 0:37
Please note disclaimers at the end of show.

Announcer 0:43
Welcome to creating wealth with Jason Hartman. During this program, Jason is going to tell you some really exciting things that you probably haven’t thought of before and a new slant on investing fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought. Possible Jason is a genuine self made multi millionaire who not only talks the talk but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom, you really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 1:37
Thank you for joining us for another edition of creating wealth. This is Jason Hartman and I wanted to say welcome to some of our listeners from around the world. Whether it be the US Canada, United Kingdom, Australia, Japan, Netherlands, Philippines, Qatar, Ireland, Singapore, India, Korea, Malaysia, Netherlands, Brazil, Germany. China, Switzerland, Thailand, and a total of 26 countries total. We appreciate having all of you listening and talking about investing in real estate, mostly in America, but a little bit around the world, American real estate, we still think is really one of the best deals going, especially given this perfect storm that has developed over the past two years or so, with the subprime mortgage meltdown, the rising commodity prices and the ridiculous increase in inflation, here in the US and also globally. listening to this first segment, is from a radio broadcast of Paul Harvey. Now us listeners will certainly know who Paul Harvey is. He’s been around just about forever, almost since the beginning of radio. Well, not quite but been around a long time. And he is talking about here. I just found this interesting. So that’s why we want to share it with you. It’s a very short one minute clip and he’s talking about how people showed up to church and found the churches topless. Yes, the roof was stolen because of the value of the commodities. And then he’s going to talk about how these precious metals scavengers are dismantling the exhaust systems of cars. Because of course, there are a lot of precious metals, platinum and palladium used in catalytic converters. And this goes to our whole point that we’ve been talking about on prior shows, where we are talking about packaged commodities investing. Again, the point here is to trade devaluing fake fiat money dollars or whatever currency it happens to be from around the world that is constantly getting debased trade it for real hard assets as quickly as possible. But don’t do it with pure commodities because the second part of this how Cast, we’re going to listen to Jim Rogers, who’s one of my very favorite authors. I really liked some of his stuff many years ago, I went through his book it venture capitalist. And then he also wrote another one called investment biker, where he traveled around the world two times on different occasions, and talked about the financial markets in different parts of the world, fascinating stuff. And he’s really bullish on commodities. But again, we don’t recommend investing in the commodities directly. We like buying them in the form of properties. Because when we buy the commodities directly, we don’t get the special unique things we get when we buy them, packaged as a property with improvements on the land. talked about this many times before. I think you’ll really like these. I won’t have much to say during this show. But these news clips will be of interest to you. So let’s start off with the Paul Harvey radio news clip and then we will go Jim Rogers and I’ll have some commentary in between

Paul Harvey 5:04
more than 1000 British churchgoers went to church this year and could not get in. They showed up and discover their beautiful heritage buildings were top let’s the roof was gone. Hundred such this year just this year. Because prices are so high for copper and lead just in Sheffield and Nottingham in Manchester. Dozens of churches have been unroofed overnight this year. Often the thieves returned to the same church again that again. scrap metal thieves are even more creative in Chicago scavenging for scrap metal thieves are sneaking under parked cars, hacking into exhaust systems cutting off the catalytic converters but it’s the junk inside the converters that’s yielding trace metals, palladium Platinum rhodium, thousands of dollars an ounce on the black market.

Jason Hartman 5:57
Now let’s listen into Jim Rogers who is As a real commodities guru and a commodities bowl, and you know what I think he’s right. The only spin that I want to give this for you, is to just ask you to think about it in a new way, because he sounds very pessimistic about the American dollar. And I am in total agreement with him about that. However, he looks at it as bad news. But I look at it is very good news for us real estate investors who are investing in very low cheap land values, and high commodities values. So let’s listen in. I’ll make a couple comments in between.

Jim Rogers 6:38
Welcome Jim Rogers, thanks for being with me on this show.

Jim Rogers 6:42
I am delighted to be here, Jerry.

Jim Rogers 6:44
Great. Give you’ve written a book that’s due to be released this December 4, called a bull in China, investing profitably in the world’s greatest market. You’ve taken your money out of $1 and put it in Chinese Yuan, Japanese yen, and Swiss Frank, and you packed up your family and moved to Singapore? Why don’t you explain to the folks out there What on earth is going on and why you’ve taken all these steps?

Jim Rogers 7:10
Well, we moved to Asia because I have a four year old daughter who speaks Chinese and I want to make sure she continues to speak good Mandarin and good Chinese. I think the best skill, which I can give to someone born in 2003, is to be completely fluent in the Chinese language and in things Chinese. We’ve been thinking about this for some time. It’s not something that just popped into the minds recently, we’ve been looking at it for three or four years. Finally, finally, we found the right place the right schools and right everything else. Plus we do want to be in Asia, Asia is the wave of the future. I think Jerry that moving to Asia in 2007, would be like moving to London in 1907, or to New York and sorry, into London in 1807, or New York in 1907. So we’ve just it’s all come together and we move to you will We’ve, when I told them I that reason, they said Where were you putting your money into which currencies and I was explaining that I think that the renminbi is probably one of the soundest investments one can make these days and they said what else and I said the Japanese yen and, and this was fine. Both currencies are undervalued, they’ve been beaten down by the carry trade. So I’ve been making new investments in those currencies. I’m terribly terribly pessimistic about the US dollar it grieves me to say this since I’m an American, you know, and, and we’re all Americans, my daughter, my wife, everybody, but what they’re doing to the US dollar and in America, it just breaks my heart. I can’t sit around and just watch them destroy the currency. I’ve got to protect my family. I’ve got to protect my daughter, my

Jason Hartman 8:43
wife. This is actually great news for us as real estate investors Why? Think about it, the value of our loans keeps declining. Let them to base the American dollar. Overall, it is not great news. But as we Play the game properly, we are outsmarting the Federal Reserve and the way the government is spending so ridiculously irresponsibly, because our investments increase in value with these inflationary pressures, the commodities inside them increase in value with the inflationary pressures, and the loan balances decline due to inflation. Remember, as I’ve always told you, inflation hurts a lender and benefits a borrower. And then you add the real icing on the cake to this whole equation, which is already so incredibly good. And what is that icing on the cake? It is the fact that our tenants pay our debts for us. Wow. You can’t get that anywhere else put in real estate investing. Let’s keep on listening to Jim Rogers.

Jim Rogers 9:54
Well, for the big part of the 20th century, the America US dollar was the reserve currency of the world? What do you foresee as the fate of the dollar being the reserve currency?

Jim Rogers 10:09
Well, unfortunately, I’m afraid that the dollar is going to lose its status as the world’s reserve currency. How is recently as 1987 Jerry, with the US was a creditor nation now we’re the largest debtor nation the world has ever seen. We owe the rest of the world over 13 trillion US dollars, which is pretty terrifying. But what’s even worse is our foreign debts are increasing at the rate of 1 trillion US dollars every 15 months. Now in Washington, you think they’d be worried about this, but they’re they don’t seem to be. It’s the official policy of the Federal Reserve in the United States to debase the currency. The head of the central bank right now is on official record is saying he’s going to print as much money as he has as to, to drive down the value of the currency and he’s doing it. I mean, he’s cut interest rates twice here in the last few months. He’s sending signals to the rest of the world. He doesn’t care about the dollar. He’s printing money. So he can, I mean, this is this is a terrible policy. It’s never worked in the long term or the medium term with all the countries that have tried it. But this is a man who doesn’t know much about the currency markets he doesn’t know much about. He doesn’t know much about anything as far as I can see, except printing money. He spent his whole career studying printing money, and now we’ve given him the printing presses and he’s running them. So it’s not not not good for the world. Not good for America, but one has to adapt. One can’t sit here and watch, watch him, destroy the currency and take take my family down with it.

Jason Hartman 11:31
Well, my comment there is the only way Jim Rogers or anybody else’s family would be taken down with it, as he puts it, is if they save a lot of money, if they have a lot of equity in real estate, if they have a lot of money, denominated in dollars in any investment, stocks, bonds and bonds are particularly bad. I would really shy away from bonds. I’m not a fan of bonds whatsoever. But stocks, bonds, equity and real estate savings accounts. All of these items get attacked relentlessly by the devaluation of the dollar and by inflation. But guess what? So does debt. I mean, think about it. When you borrow money, your lender is essentially investing in a way in a bond, a bond that you hold and you are responsible for paying back. And guess what? They get paid back in constantly devaluing dollars. This is great news for us when we play the game correctly. Let’s keep on listening.

Jim Rogers 12:42
Well, what would be the significance of the world moving from a from the American dollar to another currency as its reserve currency? What’s that? What is that going to do to the United States?

Jim Rogers 12:54
Well, it just happened to the pound sterling has 60 or 70 years, you know, 60 to 80 years ago with a world moved away from the pound sterling to the US dollar and angling was in terrible shape for many, many years. They couldn’t borrow as much money as they wanted to. In fact, that came a time when no one would lend any money to the UK after a few, several years, many years, I should say. So it will happen to us. One of the great advantages of us has is we can print money and borrow money in US dollars, and it’s been the world’s reserve currency. But as that changes, we’re going to find ourselves terribly restrained. Again, I’m not happy about any of this, Jerry, I wish it weren’t happening. But those those people in Washington don’t seem to see the world the way I do.

Jason Hartman 13:39
Now, that comment may sound really, really negative and really bad, but I personally am not very worried about it for a couple of reasons. Number one, and I’ve explained this before on prior shows, remember America’s brand, America’s brand is freedom, stability. The world’s Brinks truck, the world’s Safe Harbor. So that takes a very, very long time to change even with the currency devaluation. America has, by far the largest economy on Earth, much larger than China much larger than other economies. But we are benefiting from the consumption of the other growing economies around the world, as long as we get out of dollars, and we take as many of those dollars as possible. And we put them into hard assets, things. You know, my mom used to always tell me when I was a kid that I spent money like he was going out of style. Well guess what mom? Money is going out of style. But we don’t want to spend it on consumer items. We want to invest it in hard assets in things everybody needs, housing has universal need. Real Estate has universal need, and the commodities the ingredients of these properties that we buy, because we’re really Buying very little land there, we’re buying mostly, the value of the commodities will continue to increase because of inflation and world consumption as we are in the midst of a global prosperity boom. Even if the global economy slows quite a bit, we are still historically speaking, in the midst of a boom when you look at it in the context of history over the past several decades. So this is all good news for us as long as we play the game, right?

Jim Rogers 15:30
Are you getting any pushback from from basically telling the truth about what’s going on in the financial world?

Jim Rogers 15:38
Well, to my astonishment, many people have written and said, my goodness, we wish somebody else would, you know, go public with what’s happening because it is a serious problem. I have gotten a couple of hate mails saying, you know, thank you money and stay out of the country. I didn’t realize America was like North Korea, and these people seem to think that, you know, you can’t live in America. If you Things are wrong. But no, for the most part, to my amazement, everybody seems to say yes. Good and good. No, they are rude. They are ruining things. And I hope somebody will do something about

Jim Rogers 16:11
it. Have you been warning about this for very long?

Jim Rogers 16:14
Oh, yes, yes. No, it’s been something that’s been coming for a while. I’m afraid as crescendoing now, you know, as people I mean as as Bernanke, he makes it clear to the rest of the world, that he doesn’t care about the dollar. I mean, this is something that if you paid attention, you would understand but in the last three or four months, it’s become very clear when Bernanke he went and cut interest rates recently to protect his friends on Wall Street, rather than to protect the dollar. It’s been very, very clear to everybody and not to everybody in the world, obviously, but to many people in the world.

Jim Rogers 16:49
Well, one thing I remember is seeing you every Saturday morning on the fox news channel on the financial shows in your position or seen contra contrary And compared to some of those, especially those youngsters that were on the show, and do you think that the things that used to stay on that show or be are becoming true and that that the young ones on that show are starting to learn their lessons?

Jim Rogers 17:16
Well, it’s clear that the things I said on the show are coming through it. No, that is not a question of thinking it or anything. That’s not an opinion that’s happening. All the learning. No, of course not most people in on that show and other shows like that. Still don’t seem to have much understanding of the big picture either, certainly of international financial world finance, and unfortunately, this is many people are going to have to pay the price. I’ve I’ve tried to explain this to people but people don’t seem to want to listen. Well, which is fine, which is fine. Just gives more opportunities for those who do understand to do something about it now, case by case i’m wrong and I’ll lose a lot of money but I don’t think I’m going to I don’t think so far I’ve been right.

Jim Rogers 17:56
Well, I mean, when I watch this when I watch all the financial shows now Jim Kramer all those. To me, it seems that they’re almost deluded about what’s happening to the dollar and about what the Federal Reserve should do, because they seem to be thinking that more liquidity should be pumped into the system, especially that James gang, Jim Cramer,

Jim Rogers 18:18
the host of that show,

Jim Rogers 18:20
I don’t watch shows like that. So I can’t help you on what they think. But it is clear that more liquidity is is going to drive down the value of the dollar, it is happening to dollars at all time lows now, I mean, this is 2007. So that means, you know, at least 100 years, the dollar is now making new lows, which is a shame, because we were the world’s reserve currency, we were the richest, most powerful country in the world. And it is not going to be good. If it’s driving commodity prices up. It’s driving up interest rates as you know, long term interest rates have not come down despite all this. And what will happen is that as commodities go higher inflation goes higher imported goods go If inflation will get worse, and ultimately long term interest rates will go higher, too. We already have a very, very, very steep yield curve in America. Because long term interest rates are not paying attention to what the Federal Reserve is doing. So no. And in the end, if I’m right, this is going to cause problems for all of us worse problems for all of us. And back with

Jim Rogers 19:21
Jim Rogers, and we’re talking about the financial state of the United States right now. And you’ve I’ve heard that you’ve endorsed ron paul for presidency, is that correct?

Jim Rogers 19:32
Well, I’ve heard he said on in TV, that’s easy, the only one who seems to understand what’s going on. And I’ve given money to Ron Paul, I’ve not given money to anybody else. He is the only one who has a clue what’s what’s happening in America right now. He’s been the only one for a while. He seems to be getting traction, and I hope he does. I would certainly vote for him if he gets the nomination. But I vote for the other. I would not vote for any of those other clowns, that’s for sure. I’d right vote yes. Vote before I would vote for them?

Jim Rogers 20:02
Well, he’s the only one I’ve noticed has been talking about currency and about the bubbles. And the only other candidate I’ve heard talked about currency was duncan hunter who wanted to make it a trade violation for the Chinese to peg their yards to the dollar. So that’s the only other candidate that I’ve even heard mentioned currency that I’ve been following ron paul for decades. And I know that he’s been warning us for years about the real estate bubble and the dangers of this government subsidized loans through Fannie Mae and Freddie Mac. And do you agree with him that the chickens are coming home to roost? With regard? Well?

Jim Rogers 20:45
That’s what you would have been discussing here. Yes, of course, it is. He’s been exactly right. Again, none of the other clowns have had a clue what’s going on? Are they part of the problem rather than part of the solution? So now, most of the things that Ron has said over the years have turned out to be right

Jim Rogers 21:01
Well, what, what needs to be done about the credit bubble?

Jim Rogers 21:08
Well, you’ve got a topic, it is being popped on its own accord. Right now, we’ve had the worst credit bubble we’ve had in American history, perhaps in world history. Never before in American history, have people been able to buy a house with no money down. And in some cases, the builders were even fronting money to help them buy a house. So this credit bubble has got a long way to go. As far as cleaning out the system. You don’t clean out a big credit bubble like we’ve had in five or six months. It usually takes several years to clean out a bubble like this. And this one will, in my view, what what they should have been doing, they should have been raising interest rates, the Federal Reserve, that’s the way you go ahead and clean out the system. We’ve got an inflation problem, you raise interest rates, it might help with the inflation problem. You know, the Japanese try this when they started having problems in the early 90s. And they kept putting on band aids. Putting on band aids putting on band aids and the here it is 17 years later, and they their stock market is still down 70%. That’s seven oh percent from where it was in 1990. Well, America seems to be doing the same thing. We’re going to cut interest rates, we’re going to try to prop things up. And in the end, it’s going to make things much, much worse, much worse. Now, if you went ahead and raised interest rates and cleaned out the system and got the pain behind us, then perhaps we could go ahead and start over again. And lots of safety nets in America for to take care of people who went to our recession or when they’re hard time trying to prolong it with a bunch of bad days and printing a lot of money is just going to lead to many, many, many worse problems down the road. If we went ahead and took our stride tried to take our medicine now. We might be better off down the road.

Jim Rogers 22:47
Well with the subprime meltdown that instead the Fed has been injecting money into the system and claiming that that’s going to help the homeowners who are risking in to lose their homes because of The problems with the mortgages.

Jim Rogers 23:04
Who does this really help

Jim Rogers 23:06
you really get who really built the house up, you know, it helps a few firms on wall street that perhaps will not lose money on all the loans that they’ve made. But most of the homeowners are not not going to benefit from this because there is an overall there’s a huge glut of housing in America. Cutting the interest rates is not going to get rid of the flood of housing, it’s not going to make help house prices go up. It may save a few homeowners but for the most part, the people who bought homes or were overextended shouldn’t have been buying homes in the first place. As I said, Never before in American history, could you buy homes with no money down? And everybody of course, was buying very low interest rates, more getting low interest rate mortgages that have to be reset? Well, they’re now being reset. And no matter no matter what it is, even if he cuts interest rates, another half of 1% or something, feel many of these mortgages are going to be reset at higher rates. Many people who’ve got who underwater with them, their house prices now, with the prices have gone down so much that they did they don’t have a profit anymore are probably gonna walk away from the mortgages anyway. So this is going to help anybody except a few friends on Wall Street

Jim Rogers 24:16
and President Bush. I mean, one of the things that he’s he touted during his administration was the fact that the number of homeowners people who own their own homes was raising as if this was something that should be celebrated when really it was not a result of people earning the money and and accumulating the wealth to buy houses. That is easy credit is in that right?

Jim Rogers 24:42
Well, again, whatever happens, all of these are going to lead into further and further long term problems. Politicians look for short term solutions, because they’re not going to be around in the long term. You know, somebody else is going to be the politician. Short term band aids have never worked eventually, and I’ve got a four year old. I’m more worried about the future. You’re old and I am worried about the next election.

Jim Rogers 25:03
Well, yeah. And and, you know, it seems to me that politicians like to manipulate the system and then demagogue about it. And the easy credit has been one way for them to do that.

Jim Rogers 25:16
It certainly has and the politicians love to talk about how everybody can own a home, etc, etc. Well, you have to have economic reality. It’s great for everybody to own their own home. I’m all for it, too. I also am in favor of economic reality, because eventually, somebody has to pay all these bills.

Jim Rogers 25:32
One thing I want to do is play a little sound clip clip from ron paul questioning Bernanke. Earlier this week, and then just a few comments about it. It’s, it’s about two and a half minutes if that’s okay with you.

Jim Rogers 25:46
Okay, john, would you go ahead and play that?

Jim Rogers 25:48
So I think we have to get back to the very fundamentals of where this problem comes from. And the bubbles occur when we have this malinvestment and creation. new money. So my question boils down to this, how in the world can we expect to solve the problems of inflation? That is the increase in supply money with more inflation?

Jim Rogers 26:14
comes the first small technical point on the growth in money. Money growth has been pretty modern over the last few years, the increase in MTM is probably related to the financial turmoil, people are taking their savings out of, you know, risky assets, putting them into the bank, and that makes the money data show faster growth. So I’m not sure that’s indicative of policy necessarily. What we’ve tried to do is follow the mandate that Congress gave us and the mandate to Congress gave us is to look at employment and inflation as measured by domestic price growth. And as I talked about today, and I think you would agree that we do see risks to inflation and we are taking those into account and we want to make sure that that prices remain as stable as possible. In the United States,

Jim Rogers 27:00
and how can you do this and pursue this policy you have without further weakening the dollar, this is $1 crisis out there and people’s money is being stolen, people who have saved they’re being robbed. I mean, if you have deep devaluation of the dollar 10% people have been robbed at 10%. But how can you pursue this policy without addressing the subject that somebody losing their wealth because of a weaker dollar, and it’s going to lead to higher interest rates and a weaker economy?

Jim Rogers 27:28
If somebody has their wealth in dollars, and they’re going to buy consumer goods and dollars, so typical American then the, the, the decline in the dollar, the only effect it has on their buying power is it makes imported goods more expensive, but

Jim Rogers 27:40
not if you’re retired and elderly and you have CDs and they’re there, their cost of living is going up, no matter what your CPI says. Their cost of living is going up and they’re hurting and that’s why people in this country are very upset.

Jason Hartman 27:55
Well, if that isn’t telling, I don’t know what is Ron Paul is absolutely right. Ben Bernanke is a liar. Liar Liar. I mean, can you can you believe that? Gee, only if you buy stuff that’s imported. Will you be affected by this? That is so untrue. We live in a global economy and the ingredients to almost everything you could possibly buy, whether it be at the grocery store, the electronics store, services, because think about it service people have to buy stuff, too. There’s this ripple effect. Inflation is everywhere. And the devaluation of the dollar is hurting the elderly the most, because they tend to be the savers. They did the right thing all their life. They were told save money, save for retirement, yet they have been totally burned through the policies of the Federal Reserve. What can we do about it? Well, the best thing we can do is not get burned. So follow our plan, use debt, trade dollars for hard commodities that are likely to increase in value. Put tenants in the properties, so the tenants pay the debt back for you in depreciating dollars. That is a very, very good deal. Keep on listening.

Jim Rogers 29:24
First of all, Tim, what did you think of Bernanke ease response to Ron Paul’s question with regard to the, the growth of the money supply,

Jim Rogers 29:32
but we know he’s lying.

Jim Rogers 29:35
This this statistics are pretty clear that they have been printing money that em three, they stopped reporting him three year and a half or so ago, so that people would know but there are people who have been able to reconstruct them three, and M three is rising at a very rapid rate. The government has been pretty the central bank has been printing a lot of money since Bernanke showed up. But by the way, they were printing a lot of money on Greenspan to Greenspan and Bernanke who together are really really, really powerful. demand the value of the dollar. What is really terrifying from what I heard Bernanke you say that was when he started talking about how the collapse of the dollar or the fall in the dollar does not affect Americans who buy products? He is that it that is grounds for impeachment If you ask me, because that is such an untrue and an accurate, inaccurate statement that how can a man who claims to be an economist and the head of central bank try to get away with that, I mean, she’s a lying or he’s a total shot and one of the one of the other because everybody’s affected when prices go down. If when the dollar goes down, copper goes up. scotch whiskey goes up, cars go up, tires go up, everything goes high, if the price of imported tires goes up, that means the price of domestic tires are going to go up too. So even if I only buy us tires, and all the foreign tires coming into the country are higher price to domestic people are going to raise their prices too. So I mean, it was terrifying to hear him say that and I don’t know if he really believes it. If so, then he He’s a fool. And if he doesn’t believe in a nose, he’s telling a lie that he’s a charlatan and should be impeached. Because that was such an extraordinary, extraordinary statement to hear that from anybody except somebody who doesn’t know what they’re talking about. When the prices when the dollar goes down, it affects all of us. Even if you only buy American products, it affects you dramatically. And again, even if you don’t buy American foreign tires, American tires are going to go up because the price of rubber is going to go up. The price of everything is going to go higher as the dollar goes down. So I mean, I just I was shocked and terrified when I heard the man say that,

Jim Rogers 31:37
well, I wouldn’t put it past them to to give the big lie over and over again. I mean, if they’re capable of manipulating inflation, that what what inflation exists to me they’re capable of anything. Good. We’re back and we’re going to talk more about Verna keys, presentation and his responses to Ron Paul’s Questions of I’d like to explain a little bit more to the folks out there who may not understand about m three and how they manipulate the consumer price index, because I keep seeing these comments on blogs, and in articles criticizing ron paul for claiming that there’s inflation, because they say this, that it places at 2.5%. What do you have to say about that?

Jim Rogers 32:25
Well, you know, I would like to know where the people shop who say that inflation is 2.5% because the price of everything is going up, Jerry, no matter what you look at, if you look at entertainment or education or health care, gasoline, utilities, insurance, everything is going up. And so people say that inflation is two and a percent just are with another government says that but the government we know is lying to us. The government, they used to say it used to acknowledge that they he dynamically adjust prices. They used to be on their website, the Bureau of Labor Statistics they would eat honestly Adjusting. What is that you know what Eden ism is I mean hedonism is when they’re trying to show us a good time. So they’re manipulating the numbers and misleading us but more and more people are catching on and inflation is not two and a half percent. I mean inflation is going through the roof despite what the government says,

Jason Hartman 33:15
well as much of a Jim Rogers and as I am, that was a pretty lame explanation of hedonic. Basically, as we’ve talked about on prior shows, the government messes with inflation, and they lie to us about inflation in several ways. One of them is through a methodology called hedonic so and we’ve gone into this in much more detail on prior shows, so you can look back at the show notes and listen to those. But just to give you a quick summary here, hedonic is where they say that the product you’re buying that the consumer is buying, produces the equal or greater amount of pleasure, if you will, then the older products so the newer product is better. Because of progress and technology as it should be, and that newer product should be adjusted for inflation through the hedonic index. So for example, if you were to buy a laptop computer today, of course, that computer is more powerful and pretty much better in every way than it was 10 years ago. And it may even be less expensive today. But they don’t just say that that computer is less expensive. They say that if you were to buy an equal computer, which isn’t even produced today anymore, to the one you would have purchased 10 years ago. What would that price be today? Well, they don’t produce it. First of all, I mean, I remember back in 1989, I bought my first computer was a compact, SLT 286 and it was a 14 pound lunchbox style computer. And it had a tiny little screen and a DOS operating system. And I remember the big decision was Should I get a 20 meg megabytes not 20 gig, but 20 meg hard drive, or should I get the 40 meg hard drive? Well, I couldn’t imagine any reason I would ever need a 40 meg hard drive. And now of course I have a 200 gig hard drive in my MacBook Pro. So obviously we use that space and it was an SLT 286. So it was very slow computer by today’s standards, and it costs 40 $200 back in 1989. Now such a computer doesn’t even exist, no one produces that computer today. But what they will do is compare today’s processing power with the processing power back in 1989, and hedonic Li adjusted. This does not hold true in real life. The reason it does not hold true, is because I get by that old computer. And even if I could, it wouldn’t work because it wouldn’t be compatible with anything else. I couldn’t use the internet. I couldn’t use email. That technology would not be useful to me today. So the fact is, I have to pay more even though I get a better product. That’s true. But folks, isn’t that the point? Don’t we have the right as consumers to expect progress? I mean, progress has happened since the beginning of time. And we should expect the progress benefit to accrue to us without the government manipulating the numbers to hide inflation. So that’s a brief explanation of hedonic x. If you want a better explanation, go listen to the old shows at Jason Hartman, calm and there’s much more to it there. Anyway, we’re about to wrap up here. So keep on listening for another couple minutes.

Jim Rogers 36:41
Well, let’s end the segment talking about your new book, a bull in China investing profitably in the world’s greatest market, and if that’s what you’ve been doing, isn’t it? investing profits?

Jim Rogers 36:55
I do have investments in China I’ve had for a long, long time, and I can not buying Chinese shares right now because the market is going through the roof. But my book is not a book of Hot Tips. It’s a book about what’s going on in China. If you want to invest in China, there are various ways to do it real estate, the currency stocks. One of the best ways, of course, is to buy commodities because the Chinese have to buy commodities, and they’re going, going to buy more commodities. So there are plenty of ways to invest in China. I do a few case studies and a few industries to help help people figure out what’s going on. And then if people decide they want to invest in China, I’ve given them some ways to do it.

Jim Rogers 37:33
Well, let’s talk about commodity investing, because I believe that that I’ve read the two you are saying that the stock market in the United States is not going to come back for quite a long time and we’re in for a rough ride and you recommend, at this point investing in commodities, is that right?

Jim Rogers 37:53
Well, I’d rather be in commodities and in stocks, I do own stocks in America, we have had some things I’ve owned for 20 to 30 years. I don’t sell them just because The market may or may not go down for a while. But I think that the best place where people should have money now is either in sound foreign currencies or in real assets such as commodities. I’ve been buying more agricultural commodities recently because I think that’s a better place for people to have money than in stocks. I mean, that is certainly better than investment banks on Wall Street, which is so short.

Jim Rogers 38:22
Well, what is it about agriculture that that you think is a good place to be? I mean, one thing that I’ve been reading is that there’s less farmland in the United States, and perhaps that’s true throughout the world. But why agriculture?

Jim Rogers 38:36
Well, the number of acres devoted to wheat farming has been declining for 30 years, the inventories of food at the lowest levels they’ve been since 1972. There are a lot of positive things taking place in the United States, in the world in the world, positive for agriculture. Less and less land is available for for growing crops. And now of course, we have ethanol and biofuels and because biofuels more and more agricultural products will be burned in gas tanks. So you’re going to have greater demand for agriculture and less supply. And that normally means a bull market when supply is going down and demand is going up.

Jim Rogers 39:13
And D also the ascribed to the peak oil theory, are you in oil, investing in oil as well because of the possibility that the peak oil theory is correct?

Jim Rogers 39:25
Well, I have in my last book hot commodities, I talked about the oil and what’s happening with Jerry, I have no way of knowing if there’s people out there or not. I’m not a geologist, even if I were to cover the whole world looking to see if there’s any possible oil but I do know that nobody has discovered a gigantic elephant oil field and over 40 years, I do know that every oil company in the world has declining reserves. I do know that nearly every oil country in the world has declining reserves. So maybe there’s gigantic amounts of oil left out there but if so we don’t know where it is. And we’ve got to find it very quickly and in very accessible areas. But the surprise is going to be how high the price of oil stays and how high it goes. Maybe there’s billions and billions of barrels of oil left, but we don’t know where they are.

Jim Rogers 40:13
Well, I’ll tell you my father is a retired petroleum engineer. And he he strongly believes in the Hebert’s peak and peak oil. So you might hear

Jim Rogers 40:23
so far the evidence is that he’s correct but it really doesn’t matter Jerry unless somebody finds out Oh, let’s say it’s there. Where is he gonna find it very quickly. And if we don’t the price of oil is going to continue to go hire for your father and over to Vin king over to Ben crew to completely correct Yeah.

Jim Rogers 40:42
Another thing I want to talk to you about is China because as you know, their their association social conservatives in our country that don’t want to have trade with China because they perceive China as as communist and godless and immoral. What have you observed? about China’s since you’ve actually been there and has seen the markets opening up what what do you think about the level of freedom and,

Jim Rogers 41:08
and monetization into they? They call themselves communist but I’m telling you they’re among the best campus in the world right now. Massachusetts is more communist and then China is I mean, he’s tried to do business in Massachusetts try to do business in China, I promise you, most people would accept giants. You will also find that there are lots and lots of rights now, I mean, hundreds of magazines and newspapers in China. 30 years ago, of course, when the hardline comments were running it, it was only one newspaper, lots of TV stations now the internet there 10s of millions of scores or millions of people in China on the internet now. I mean, there’s virtually impossible to censor people even if you want to some, some there is some attempt at censorship, of course, but I’ve driven across China a few times, the churches, the mosque, temples are all packed with people now. They’re certainly on goddess. Maybe they were goddess Luffy 40 years ago, but they’re not any more dramatic and massive changes taking place in China. Are there problems. Of course, there are and will be huge problems, just as it were in America 150 years ago, 125 years ago, we had terrible problems and horrible setbacks, but we did a pretty good job. And they are in the process of doing a pretty good job.

Jim Rogers 42:20
Well, Jim Rogers, I really want to thank you for being with me for this interview. It’s very interesting, and I’m going to recommend that everybody go buy your new book of bull in China, investing profitably in the world’s greatest market. Thank you very much for being with a

Jim Rogers 42:37
very good Thank you, Jerry.

Jason Hartman 42:39
Well, that was it. You know, a long time ago, one of my real estate mentors, Robert Allen, who’s written several best selling books, said don’t wait to buy real estate, buy real estate, and then wait. And you know what, that is very true, but you’ve got to buy a special kind of real estate, finance to special way The right markets at the right time. Based on our methodology, Jim Rogers is right, the value of commodities will continue to increase. They’ve already had quite a run. But there is a global prosperity boom occurring that is of historical proportions. Something that has never before happened in human history. This is a game changer. It is a life changer. The world will never be the same again because of it. You combine that with the fact that post 1971 world or the government started aggressively devaluing our currency in the US. Good news for us as long as we’re following the right plan. Bad news for us if we’re following the old plan, which does not work anymore. Follow my plan because it makes sense based on the current environment. We In. So I hope this was helpful to you this information is crucial to your financial future. Use it, call one of our investment counselors here, inquired our website at Jason Hartman, calm, go to Jason hartman.com and get the free CD, attend one of our events coming up. And we will look forward to helping you grow your wealth based on the new world in which we live. It is a different world, but it is still a world of abundant and truly incredible in credible opportunities to create wealth, if you do it the right way. And you follow the right roadmap. So with that, thank you so much for listening and happy investing. Hey, so we’ve been Platinum members for a couple of years now. And we’re just real pleased with the way things are working

Jim Rogers 44:55
out.

Jim Rogers 44:56
We can be happier and it’s really changed

Jim Rogers 44:58
our lives for the better.

Jim Rogers 45:00
Are you ready to take the next step? Then join us to Platinum properties investor network in Costa Mesa, California for our next creating wealth seminar on Saturday, September 20. As millions have discovered, you can become very wealthy by investing in proven income properties. Jason Hartman and the rest of the Platinum properties team will show you how to select the very best markets earn returns in excess of 30% and protect yourself from a loss of equity. In this full day educational event, you will learn all about Jason’s unique conservative investment philosophy that works in real life with no hype. Seats are limited. So visit Jason Hartman calm today to register. That’s Jason hartman.com. On October 25, and 26th Join us at the Masters weekend a gathering of experts. This special event only happens twice a year. With our panel of 16 experts, we’re putting enough real estate brainpower in one room to make Donald Trump flinch. The Masters weekend is a powerhouse education that can revolutionize how you think about money and wealth. Our speakers come armed with the latest and shrewd real estate investing techniques and will address such issues. As the smart way to choose your properties, how to grab every tax benefit, the law allows how to put together the most creative financing package possible, the hidden power of the 1031 exchange, and how to easily invest in dynamic growth markets outside of California. Or do your ticket before October 1, and you’ll receive our early bird discount space is limited. reserve your seat now head to Jason hartman.com and click on events. That’s Jason hartman.com. The Masters weekend beginning October 25. Have you heard about the go zone? What might be the greatest tax benefit in history? If not, you must attend our go zone tax benefit seminar on Tuesday, September 16. Right here in Costa Mesa, California. Act now to start slashing taxes for the past two years and set up your ironclad tax annihilation plan for next year. Sure, you could spend months picking through tedious legal jargon yourself, but our real estate specialists already understand it. And for less than the price of a good steak with all the trimmings you can be front row Center at the go zone seminar, ask questions take notes, bring your tax advisor Leave with a solid understanding of how to save on taxes like no other time in history to register for this very special event on September 16, head to Jason Hartman calm and click on events. Jason hartman.com attention agents, brokers and mortgage people. Do you know that we cooperate? Do you know that our network is an open system that you can refer clients and outsource your investor clients to us and receive passive income? It’s a really great opportunity. All you have to do is register your clients at Jason hartman.com and tell them to attend one of our live events or live educational seminars. Listen to our podcast, go to the website and request our free CD at Jason hartman.com. And if they invest with us, per the terms listed on the website, you will get a referral fee. We have lots of agents, brokers and mortgage people that received surprise referral fees that they weren’t even expecting. They get a check in the mail. And they are just happily happily surprised. It’s a nice extra supplement to your income. So be sure to take advantage of our broker cooperation. Agents are welcome. We cooperate with outside people, and we’d love to help you with your investor clients.

Jason Hartman 48:18
Hey, I just wanted to announce a couple of quick things for you. If you are able to come to one of our live events, we would love to see you and meet you in person. We’ve had people fly in from all over the US for them. So hopefully you can join us for some of those events. I wanted to mention to you that we have a new offering a free CD, a free audio CD that you will really really like we’ve had so many people that have given us really good comments about them. And you can go to our website at Jason Hartman calm and just fill out a little quick web form. And you can either download it or you can have the physical CD mailed to you in the postal mail, but get the free CD especially if you are a new listener you need This. And if you are a regular listener and you’ve listened to all the other old shows, you don’t need the CD so much, but it’ll be a nice review for you either way, but if you’re new listener, you definitely want to go to Jason hartman.com and request the free CD. Remember that Platinum properties investor network has moved. We are in our beautiful new office in Costa Mesa, California. 555 Anton suite 150 in Costa Mesa, California 92626. And we’re right by world famous South Coast Plaza, so come in for a visit and a little shopping. Also, we just uploaded another video podcasts. And I’d highly recommend that you subscribe to that. There’s some stuff that just lends itself better to video than audio. If you want to see what’s on that subscribe to it. You can go to Jason hartman.com. If you use iTunes or an iPod and you’re an apple person, then you can go to the iTunes Store, type in Jason Hartman and Two podcasts will come up the video podcast and the audio podcast. And you’re probably already if you’re listening a subscriber to the audio podcast, so make sure you get yourself a free subscription to the video podcast as well. And this particular one that we just loaded in the video podcast is about naked short sales. And what goes on with this short sale and manipulation on the stock market. It’s a very interesting report from Bloomberg News. And I think you’ll really learn a lot from that so be sure to tune in and watch that. Be sure to see appropriate disclaimers and disclosures on our website at Jason Hartman calm remember that we are not tax or legal advisors. Anyway, we’ll talk to you next week. Thanks for listening.

Announcer 50:56
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