Jason Hartman hosts Alan Beaulieu, President & Principal at ITR Economics. They discuss his latest book, Prosperity in the Age of Decline. Alan explains why our economy is the way it is and connects his ideas to energy costs, inflation, and the millennial group. Then they discuss the difference between virtuous and non-virtuous inflation. Alan furthers the conversation giving us 5 types of inflation. They end with thoughts on the latest tariffs and tax reform.
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 0:52
Welcome listeners from around the world and greetings from the Arctic Circle. Yes, I am very close to the North Pole. Almost caught a glimpse of Santa Claus and his elves Just kidding, of course. So we are at the Ice Hotel in Sweden on a venture Alliance or I should say add venture Alliance trip. And it has been pretty spectacular. I think. I think everybody feels that way. A lot of bucket list once in a lifetime experiences the past few days and a couple more to come as we head to Stockholm today. I slept and everybody slept in a room that was negative five degrees Celsius, which is equivalent to 23 degrees Fahrenheit. I did the conversion I think I’m remembering correctly. The weather here has been by Icehotel standards, spectacular it has been perfect. I mean, it is sunny and gorgeous. And you know, when it is sunny in a place like this, it is just glorious. The sky is so clear. It’s I just wish I could show you a picture of it. It is phenomenal. We are in one of the ice hotel rooms. We’re in a regular room at the moment, which is just an ice room that’s very cool looking with all kinds of ice sculpture. But the rooms that we stayed in are the better rooms. The problem is we couldn’t record in that room because everybody keeps coming in and looking at them. During the day they opened them up, and then they close. Later in the day they let tours come in and visitors look at this because it’s such an iconic place. I mean, this is such a truly unique hotel. There is a program on Netflix, can watch it and learn about the Ice Hotel in Sweden. But it’s it’s amazing. This is I believe, the original one it’s been built for 28 years. It melts every year and they build it again. I have a guest here with me one of our members, that is hesitantly agreed to come on the podcast Carmen say hello,
Jason Hartman 2:52
She really didn’t want to do this folks, but I twisted her arm. Have you enjoyed the trip? Oh, it’s
probably the best trip I’ve ever done has been Amazing, amazing,
Jason Hartman 3:01
pretty much kind of a once in a lifetime thing. salutely
Yeah, it’s just one of those things. If you come all the way here, then you want to do everything we’ve done.
Jason Hartman 3:08
Yeah, it’s worth it. Yeah, incredible. And the food has been interesting too. We’ve had some really interesting like, food and very Gourmet, you know, one of the things and you watch that Netflix documentary it also in the hotel, they sourcing The food is a big job in the Arctic Circle, right?
Yeah. And, well, we didn’t see it here. But from the show, they have areas I think close to the mines where they actually grow their own mushrooms and they just big the local stuff here that they use that for the for cooking, so it’s amazing. And we got to try that last night. So that was great. And reindeer meat.
Jason Hartman 3:44
Yes. Which is which and we have moose. We had a five course dinner last night, I think. Yeah. And we had a reindeer moose and salmon, or some or
arctic char, I think
Jason Hartman 3:54
anyway, some fish. Yeah. And that’s been great. And then the first day in Stockholm We stayed at kind of a country type palace actually. It’s a palace that was built in 1630 called rosaries. Berg’s, we did skeet shooting. Yeah, that was fun, too. That feels like a month ago. I
know. We’ve done so much. We’ve been busy, but it’s been amazing.
Jason Hartman 4:14
Yeah. Tell us about some of these rooms now the room you slept in. I mean, these sculptures in your room are amazing. You know, again, these art suite rooms at the Ice Hotel are open all day long during the day and they close them at night because they become somebody’s hotel room. But they open them for several hours during the day so people can look at them into a room. And each room is done by a different artists. It takes two weeks to build it. And it’s sculpted out of ice. It’s truly amazing what they do. So tell us about your room and then like what was your favorite room? I mean, they’re all it’s like hard to have a favorite and it’s hard.
Yeah, I was lucky enough that I think my room was one of my favorites. Yeah, a had, like snails type of theme. And they had lights that change color. Bicycles with lights hanging from the ceiling. I was Unbelievable. Unbelievable for me,
Jason Hartman 5:09
it’s like a magical place.
It’s like sleeping art. And you know, somewhere where you’re never gonna find anything like this anywhere else.
Jason Hartman 5:17
Yeah, it’s amazing. My room was called daily travelers. It was a really neat room. They had like, sort of people etched out of the ice on the wall. What was your favorite? The space room? The space
room? I think it was my top.
Jason Hartman 5:29
That was pretty amazing. They had like two spacesuits etched in the wall. Yeah. And then behind the bed, there was this globe, etched out of ice. I mean, just, but it’s hard to have a favorite like some of these rooms have staircases etched out of ice. I mean, incredible. Yeah,
there wasn’t one that I had just like the snow on the ice hanging from the ceiling, and it was just hanging there. I don’t I don’t even understand how they did that. But
Jason Hartman 5:53
it was incredible. It is truly amazing. And then the embedded images in the ice. Like in the chapel, they have a chapel here. Were they do weddings and stuff. And they have these embedded flowers embedded within the I have no idea how they do that. It’s truly, truly incredible. But polling, even real estate investing?
Well, it’ll probably be two years now,
Jason Hartman 6:12
two years. You’ve been to a few of our events before, right? You came to meet the masters and San Diego and then a couple of years, I think, yeah,
probably it’s in there now. between four or six events. Yeah.
Jason Hartman 6:22
Yeah. Great. Great. Good stuff. Where do you own properties? Where are you investing? Right now? Just in Memphis, Memphis only. Yeah, Memphis, just never quits. I have four properties in Memphis myself. And that is definitely one of our busiest markets. Indianapolis pretty busy too. Those are places where we can still source some decent inventory.
Any thoughts about the trip or about investing or anything? Let’s wrap it up. I probably will be talking about these trip for a long time because it’s just been incredible. And then for investing, I’m definitely something that I want to keep looking. I’m interested in looking at new construction and see if I can change a little bit of what I have right
Jason Hartman 7:02
now. And your business. You have an Amazon business where you sell products on Amazon. Yes. Yeah. Yeah, that’s, you do really well with that. And then why real estate though? Like why invest in real estate? You’ve got your business your business does great. What’s the real estate investing attraction
is all about cash flow and passive income.
Jason Hartman 7:24
Yeah, good stuff. Good stuff, talking on the podcast wasn’t that bad, was
it? No, no.
Jason Hartman 7:31
She didn’t want to do it, folks. But I talked to her and you’re gonna get to our guest today, you’re gonna love our guest. So stay tuned for that for a few minutes. And be sure to join us in Philadelphia for our creating wealth seminar in Philadelphia. That is, I believe, may 19, our first northeast event for a big public seminar. We’ve done venture lions events there before. And then we’ve got venture lines the following weekend, Memorial Day weekend in New York City. So check those out at Jason hartman.com It’s my pleasure to welcome Alan volio. He is president of ITR economics and co author of prosperity in the age of decline, how to lead your business and preserve wealth through the coming business cycles. Alan, welcome. How are you, Jason? Thank you. And thanks for lending be on your show. It’s good to have you on give our listeners a sense of geography and tell us where you’re located.
Alan Beaulieu 8:29
Well, I lived in New Hampshire and traveled all over from there but I have my roots here in Southern New Hampshire, beautiful part of the world. You just want to be near Bretton Woods, I guess, huh?
Alan Beaulieu 8:44
Yeah, there is that that grandchildren. Those are the two draws are
Jason Hartman 8:47
good stuff. Good stuff. Of course, the Bretton Woods agreement, hopefully our listeners know what I’m referring to there. I think you do. Well, good stuff. So business cycles. business cycles are, I guess, you know, most pronounced in the Austrian School of Economics which I’m believer and you’re a believer, to a degree, as you say you’re not, you’re not in favor of abolishing the Fed, you won’t go that far but generally a believer in the Austrian School concepts or you lean that way. We’ve had a bull market in stocks really for nine years now, I think a lot of people say we’re living on borrowed time. I’m not sure I agree with that. And I’ll tell you, why give you some, you know, food for discussion here. So when people talk about being scared about a business cycle shift that’s eminent, they say, Well, we’ve had this bull market, you know, for many years now, and it’s time for a correction. But we were so far in a low that was such a trough we were coming off of that, I don’t know if you can really measure from there when you talk about time, but I would love to get your thoughts on that and, and just talk to you about the premise of the book and, and where we’re going in general. So have at it, whatever you want, or wherever you want to take that one.
Alan Beaulieu 10:00
All right, well, let’s start with the stock market. And I think you bring up a good point, when you’re coming off of that kind of trough, it’s hard to always apply the rules of normality. I’m actually thinking there’s, you know, a correction not far off, but not not a bear market, which is a different item, as I’m sure you know, we could have a series of corrections without entering into a real bear market. And that’ll be enough. I think, when that happens to give people pause, and to slow down some spending, especially since Americans have really drawn down on their savings accounts. There’s not much left there. So when they feel their equity diminishing their 401 K is in the air, you know, TV, America accounts and so forth. I think that’ll have a an impact on the economy. Why I think that’s going to happen, but that’s a harder thing. As I look at my channel graphs, I see that signaling that we should be heading towards a correction. No, it doesn’t sound like it’d be a leading indicator to it, but the purchasing managers index from the ITSM. There’s a rate of growth metric involved there that day. He leads the stock market by a little bit. This signaling there’s a correction coming. So if that happens, it wouldn’t surprise me at all day says I’m sure you and everybody else on the planet would like to know the disqualification that we all have I can’t time the market and better than anybody else can I just can say there’s something coming in relatively soon, but I don’t know if it’s may 10 or June 12. I would I would tend to understand. Right, right. Or even or even which year? Yeah, it says a prediction game is pretty tough. It definitely is. There are a lot of factors here and we’ve so far just talked about the stock market, not the really the broader economy. But where do you think we’re going? I mean, are we in for inflationary times, or deflationary times or what? what’s coming next? Okay, well, we think in the near term, the global economy is gonna cool a little as we finished this year and head into 2019, especially the first half of the year, nothing significant, just you know, it’s been pretty hot and it’s just going to cool some which will pull back the inflationary pressures. A little bit, but overall, I’m on board with in an inflationary decade ahead as we get to the 2020s. I think labor rates are going to be flying that more people working will make for more consumption, which will increase the demand polis I’m sure you know, Mm hmm. And then the demand is going a bit up price of commodities. And you know, all of that dispels inflationary pressures. And and with a debt of the United States, you can even expect that as interest rates rise in the future, on the basis of normal inflation, we could find that the dollar weakens, which creates more inflation. And all in all, we could be looking at it at first a very virtuous inflation trend, which will surprise all millennials, they don’t have any idea what that is. And then we’ll get to an unvirtuous non virtuous inflationary period late mid 2020s. that’ll lead to that great depression that we talked about in our book. It’ll be a great time to return. For all of us baby boomers on my gosh will have nice high interest rates, but it will be difficult on them. At our left working
Jason Hartman 13:01
nice high interest rates, meaning you can earn from your savings, high interest rates, you want high interest rates when you’re a saver, obviously. But if you’re a debtor, it’s nice when they’re low. Right? Yeah,
Alan Beaulieu 13:12
yeah, exactly right. Variable debt are gonna be unhappy with all of us that are just living on fixed income, or 401k, and IRAs, and the rest of them be happy as can be.
Jason Hartman 13:21
So you talk about the virtuous and non virtuous inflation cycles. So you say that inflation is coming, we’re gonna see, you know, fairly significant inflation. At first it’s virtuous, then it’s not virtuous. Tell us a little drill down on that a little bit. If you weren’t
Alan Beaulieu 13:37
sure. When inflation’s at two and a half, three, three and a half percent, you know, it’s enough to get the feds attention so that they’ll nudge up interest rates, but not so much that it’ll cause the economy any real harm. I mean, if they nudge up 100 basis points, and then they nudge up another 50 basis points and we’re talking when you’re done the next year. You know, that doesn’t mean any real harm to the economy. Yes. Crews long at that kind of inflation big businesses are raising with everybody, you know, should be thinking how am I going to raise prices as they go into the future and they can cover their labor increases, they can cover the commodity increases and inflation hides a multitude of sins. And it allows businesses to just kind of continue on and be happy when inflation gets steeper, and the Fed has to react more significantly, all of a sudden, people ordinary people are faced with some buying pressures, their wages may not be keeping pace anymore, they may be finding that that car is just too expensive. The Home prices have gone out of reach, especially with interest rates going up as far as they have the affordability index is down and all those kinds of things begin to compound. So that’s an unfriendly part of the inflation cycle, always near the end, always followed by a correction in the economy. It’s a lot like breathing.
Jason Hartman 14:51
Right, right. You know, inflation, though, really does benefit people who own real estate with lots of debt, because it’ll cause the price In the real estate to go up in value and the debt to go down in value, essentially, you’re paying the debt back and cheaper dollars, of course, which is the same business plan the country is engaging in on and, you know, with paying debt back to China and Japan, for example. Right. Right. And it seems like you can really kind of bank on inflation, because it seems like a very good deal for governments who like to spend money, you know, and it seems like a very good business plan for them.
Alan Beaulieu 15:27
Would you agree it is they have a market incentive for watching some inflation just for the reasons that you said, The problem comes that that’s a dangerous game to play. And historically, I can’t think of an instance where somebody inflated themselves out of debt. Right. And the danger there is demographics.
Jason Hartman 15:44
Yeah. Which is the next thing I was gonna ask you about because you’ve got a chapter in your book about the demographics driver. Wait, demographics are a seriously important issue nowadays because we have this cola I guess Yo, you’ve always had it But first of all, The demographic cohorts are so much larger than they used to be, you know, the baby boomers being such a giant cohort. And then the millennials being even slightly bigger than the baby boomers by about 4 million people. You know, people are living longer and the impact is wide ranging wide ranging retirement age is still way too low. There’s just no way to pay the bills on Social Security and Medicare. You know,
Alan Beaulieu 16:27
you summed it up nicely. And I’ll give you another fact if I made that. Right now in America, there are 40 million baby boomers drawing down on Medicare and prescription drugs in 12, short years, just 12 years, that number goes to 70 million people. So from 40 to 70 million in 12 short years, we think now how are we gonna pay while managing the problem? 12 years?
Jason Hartman 16:53
Yeah, and you can you can bet on that because it’s as sure as the sun rising tomorrow, you know, you know, those people are going to be 12 years older. And you know how many people so that’s from 40 million to 70 million almost double in 12 years. Wow. Right. can’t pay today. Go ahead.
Alan Beaulieu 17:12
Yeah, yes, exactly. And then I’m gonna add in because you brought up something else about the debt. made me think of this. Jason, thanks for bringing it up. Japan’s demographics are worse than ours. Oh, yeah. Your demographics are such that your population declines every year.
Jason Hartman 17:26
Japan will not exist in 50 years. It will not exist. You can’t exist. You can’t be a country if you don’t have kids. Okay. You just can’t.
Alan Beaulieu 17:37
Yeah. So now factoring and I’m sure you already have, you’re probably you know, ahead of me here they are the second law firm holder of US Treasuries, as their tax base are roads and they need yen to take care of their aging population. The easiest to do is to sell those trade. So as they sell treasuries and sell treasuries to convert dollars to yen essentially That puts upward pressure on a state’s interest rates because we have to compete now against Iran treasuries in the world market. And flooding the market with any commodity actually lowers the value think sinking smaller, higher inflation, higher interest rates. So Japan’s demographic problems become a real financial problem the United States because we allowed ourselves to become this huge debtor nation.
Jason Hartman 18:21
Well in Japan is a big ocean. I mean, they’re just yeah, Japan has more debt than anybody, right or at least any major country. It’s insane. The debt to GDP ratio of Japan is mind boggling and so bad, but well, you know, like, what is Japan gonna do, though? They’re just gonna pay higher rates, and everybody’s gonna keep swallowing their debt. I mean,
Alan Beaulieu 18:42
really, no, no. Later, they become the first domino to fall perhaps in that depression scenario. Uh, huh. Economies can’t keep going under those conditions you just described so manufacturing begins to go offshore that sort of as young people, they have chase opportunities. Whereas we end up with an island nation, that’s a wonderful place great people can no longer support itself. And that’s the end of civilizations when that happens, right? That’s an over exaggeration. Yeah, right. Right. The point across Yeah, sure. But it’s true. It is, you know, and interestingly, Japan doesn’t really have a whole bunch of assets to sell, like, you know, the country that’s large, like the us if we got into trouble, we could just
Jason Hartman 19:23
sell some stuff, you know, like the ports, maybe Dubai will buy them. That kind of that kind of idea, right. And, you know, Greek Greece selling some islands to get out of their mess. And it’s just, it’s crazy. Well, what, tell us more about demographics, though. So we talked about Japan, we talked about the US. Of course, there’s more to it in both. But you know, you also look at Europe. I mean, Europe is over. Russia is over Japan is over the US is this nation of immigrants now. So it’s not declining, in that sense, but certainly it’s a huge change in the population. What does this all mean is we have the graying of America. But then we have all these young people coming up into a rather anemic employment market overall. I mean, I know unemployment is very, very low. And that’s wonderful, but it doesn’t really measure underemployment, people with philosophy degrees working in, in food service business. That doesn’t work very well with big student loan debt, especially. What are we going to do?
Alan Beaulieu 20:28
Well, I do have a doctorate in philosophy, so I’m not working too.
Jason Hartman 20:33
Well, that’s, that’s good. That’s good. Hey, listen, I think philosophy is a noble thing. It’s one of my favorite topics. That’s why I picked it. But, you know, there’s not a lot of jobs in philosophy if you’re not going to be a professor. Okay. So
Alan Beaulieu 20:47
no, you’re absolutely right. I think the answer to your question is more encouraging than you might think, because wages are going up and we’re consulting practice your PR economics and every single client. We have I mean, every single industry that we look at, they can’t get enough people. They’re bidding up for qualified people. So the thing is we have to create labor. Right. So the jobs, which means less college, more skills, more career education, as opposed to college as i and i think
Jason Hartman 21:17
so. Right on that we really need vocational schools again. Yeah,
Alan Beaulieu 21:21
yes. Yeah. And we honor it. We need to sell it. We need to make it you know, a, we
Jason Hartman 21:26
need to make it okay. It’s there’s nothing wrong. Yeah. Yeah. Someone’s got to make widgets,
Alan Beaulieu 21:31
you know. Yeah, exactly. So absolutely. So and and i think those meals are actually going to have better wage increase and, and a lot of people think and the other thing I’m excited about what millennials, you know, I know it’s easy to make fun of them. But the reality is, people thought they always lived down. They’re getting older, they’re having the one or two children, they’re leaving down on suburbia. And they do, they rev up the economy. They buy houses, fences, cars, pets, all that all the things that go with suburbia, right, and they want children more than my generation baby boomers wanted children. So that’s a that’s a really positive things. They’re buying cars people said Oh, they’d never buy cars. They’re the largest leasing group of automobiles in this country and most of them are SUVs. I mean, these people are amazingly saved. They have budgets, they, they know what they want in life. I’m a real fan. And I think they are secret.
Jason Hartman 22:22
I agree. I think Millennials are oddly frugal. And look, why wouldn’t they be? Right? They saw their parents get burned in the economy and the housing market during their most formative years. Right. A lot of them were moving because of foreclosure. Or you know, I mean, so that impacts someone especially in your, your teenage years, right. Like, it’s very interesting. But you know, interestingly, you say they’re the largest group leasing cars and about 36% of them are the buyers in the in the home buying market now too. But as a ratio, now, that might just be because their numbers are so large. I mean, what When there’s 80 million of them, they’re going to impact anything, because their numbers are so large, but as a percentage of their own numbers. To me, it feels like they’re not buying as many homes, as say, you know, the baby boomers, I would think in terms of relating to their their own cohort. I’m not saying overall in the marketplace.
Alan Beaulieu 23:22
Sure. Jason, I understand what you’re saying. But I would ask you to look at millennials in two segments, the 30 to 35 year old right versus the 25 to 30 year olds. Yeah, they are very different people. Yeah, I agree. One group, but two different people and I don’t know the number and perhaps you can educate me but that 30 to 35 group, feeling that much more dynamic than this might indicate.
Jason Hartman 23:45
That’s the problem with calling millennials a millennial. It’s a it’s too broad a brush because john burns, the real estate researcher, he spoke at our last conference and he’s been on the show too. And, you know, he said, Look, Mark Zuckerberg is a millennial and and so is my 18 year old daughter. They have nothing in common. So it’s, it’s not. Yeah, right. You talk in your book about the five sources of inflation. Can you tell us a little bit about that?
Alan Beaulieu 24:13
in broad terms, we’ve already mentioned several of them. There’s increased wages, which is going to create inflation. There’s a likelihood of the debt of the United States and the debt of China leading to some devaluation of the dollar, which creates some inflation, we think there’ll be commodity inflation because of demand. Inflation also is very typical. It doesn’t seem that way. And it can be skewed by world events like China brought some disinflation and deflation to the world. And so we didn’t see any for a while but to history in our records, go back to the 1400s. There are major swings in inflation, and we just do so one of the major causes is the business cycle. And as Jerry Ford once said, one of my favorites, the pendulum will swing circle and we just, we just do See some inflation. And millennials? Again, we’re back to that group. Because we’ve been in a long, quiet period, they don’t have any idea how to live. Even a 10 or burst that won’t understand.
Jason Hartman 25:14
That’s interesting. You know, I haven’t had anyone really say that before, but it’s a very good point you make a millennial doesn’t really know what inflation is. Yeah, right. A Gen X or an A baby boomer certainly do. I mean, they were they lived through the 70s. Even if you know, even if the Gen X or was very young, then.
Alan Beaulieu 25:30
Yeah, that’s quite interesting. So our job has to be to teach them. When I get an opportunity to speak to groups. If there are millennials there. I always encourage them, go find somebody that’s older than you and pretend you care about their stories, but listen to what they say about it.
Alan Beaulieu 25:47
You have to learn it.
Alan Beaulieu 25:51
It’s a must ask him about gas lines
Jason Hartman 25:53
and waiting in line for gas for three hours. That’s great. Right.
Alan Beaulieu 25:59
The good news There is of course, there’s no, we’re not going to have that worry again in the United States. And that’s one of the things get so excited about, by the way, you just lit me up. He actually produced 96% of the energy that we consume in this country. And you know, we buy from Canada largest foreign Mexico, second largest, third largest to Saudi Arabia, we actually refine most of the Saudi oil we use very little internally, we sell the refined products back out. We at this point really don’t need the Middle East. It’s just a place you and I have never seen before. And because of who you are, I’m sure you know that. Maybe not everybody listening does. We had a tanker go 700,000 barrels shipped to the middle east from the United States and I fell out of my chair that’s like, I never thought I live long enough to see that happen. But we actually shipped oil to the Middle East. And
Jason Hartman 26:50
Elon, I’m so glad you brought that up. Because Isn’t it amazing that all of the fear mongers in the 70s were talking about peak oil and here we are, right? It’s just and you know, I was thinking about this just last night walking my dog. You know, I don’t know if people realize certainly a millennial doesn’t know. But just in general, I want to remind everybody, the world I mean, I grew up in Los Angeles, okay. The world used to be a much darker place at night. This is a small thing, maybe to some, but you know, I remember when I was a kid, the freeways didn’t, you know, the lights were out on the freeways and, you know, there was just everything was about an energy shortage and conserving energy. And Jimmy Carter would tie say, wear a sweater and you know, turn your thermostat off. And, you know, it’s just funny how that’s shifted. Oh, yeah. We live in such an abundant brownouts.
Alan Beaulieu 27:45
Jason Hartman 27:47
Yeah. Oh, yeah. And now we have solar we have geothermal we have when we have coal gas, of course. So some coal but you know, the mix is just wonderful. And I like to tell people that if you don’t want it the Golden Age I mean, how can you look beyond this? Yeah, all the energy we would need stable, which attracts businesses from overseas to the United States world class, stable energy base. They come here, it’s not just everything you said, it’s also the efficiency of the things that use the energy has increased dramatically. I mean, look at LED lights and think how significant the LED light revolution really is, you know, with eight watts, you now have equivalent of 100 watts of energy would use it right. And but the same result, some would argue a much better result. And so the energy efficiency of all of these items we use, I mean, it’s just skyrocketed. They use so much less energy than they used to, whether it be cars or appliances or anything. It’s really amazing. It’s an amazing time to be alive.
Alan Beaulieu 28:51
You know, it’s no, no, we’re really, in fractional horsepower motors have had a lot to do that in the construction. I mean, everything is absolutely true and Largely goes unappreciated
Jason Hartman 29:03
is truly a great time to be here and a great time to be part of what’s going to be coming for the next 12 years. Alan, one of the things I’m always telling my listeners is you must watch old movies and old TV shows, you just must do that, even if you don’t like them just to see how the world used to be, just to see how scarce many things used to be. You got to watch old TV and movies. Yeah, you just must. It’s a requirement to just get
Alan Beaulieu 29:31
fantastic advice. I never thought of that. But you’re absolutely right.
Jason Hartman 29:34
And I’m not even saying that all I’m just saying from the 70s or 80s even you know, and then go from there. You know,
Alan Beaulieu 29:39
I hate to tell you, Jason, but that is that old? Well.
Jason Hartman 29:43
I’m not saying you have to watch him from the 30s or the 40s. Okay.
Alan Beaulieu 29:49
Yeah, well, you’re right. Those would be unrecognizable. But
Jason Hartman 29:54
yeah, that’s true.
Alan Beaulieu 29:55
Certainly you’re right together, appreciation of the past and where we are now. Ask me why I’m excited about where we’re going. It’s three things, its energy, its manufacturing in this country, and it’s millennials. If you can’t get excited about those, just because you don’t want to be because, you know, the winds are favorable for us right now. And I can’t quote the source. I really wish I could. But a recent study in appeared at Harvard business or the show that before the tariffs, so it’s better now but before the tariffs of cost manufacturer was only 1% more than the cost of manufacturer in China 15 years, so nobody would have believed that possible. But our gains, how can you not be excited about our future t shirts, I just get bothered when people are down on manufacturing country, they go really well get your news?
Jason Hartman 30:40
Well, I agree with you. And you know, of course, 3d printing is a giant revolution. I used to talk about that all the time. And you know, it hasn’t impacted like it hasn’t gotten into everybody’s house yet, but it will. But you know, it’s certainly being used in manufacturing and, and mostly in modeling and prototypes. I mean, that’s gotten so much cheaper to produce prototypes now. And then, you know, prostheses, you know, you need a artificial hand. Here you go 3d printed, you know, it’s truly truly amazing and, and the quality of all the products we buy are so much better than they used to be. It’s just an amazing, amazing time. gonna ask you a couple questions. So do you have millennial children? I’m curious. I do. Okay. All right. Okay. Are you a fan of, you know, either I don’t want to necessarily say Trump, but maybe the Trump tax plan. That sounds like you’re a fan of the tariff concept, but
Alan Beaulieu 31:28
I just want to hear, I’m not okay. I’m not a fan of the anti dumping. Let me give you a quick answer to that. I think blanket terrorists are dangerous, and they invoke problems. And anytime you do something like a tariff, you’re just inviting the law of unintended consequence to come around and bite you somewhere. And there always will. You can put tariffs on solar panels, somebody’s going to lose your job. In this case, thousands of people are likely to lose your job. You’re protecting others. It’s just impossible to gauge all the reactions to that so no, I’m not a fan. No blanket terrorists to be sure. Then first attacks plan, which was your question? Yeah, lots to like, there is a lot to love in there it simplifies, shortens and makes more understandable, all good things except for the fact that it’s not going to create what they wanted to create, at least I don’t think so, you know, appears to create cash businesses were awash in cash before they were still not spending it just because you give them more cash, like pushing on string, the Fed tried that with tarp. And then you can write it off faster, which is great, but just not going to part with that half million for that machine x, just because of that. And if you do, you’re only going to buy one, you’re not going to 1,000,002 because you can write off two. So I think they’re overestimating the value of the tax plan. We looked at this at ITR economics and historically, you can get a little bang for your buck for a short period of time, and then the benefit is gone. Mm hmm. You know, we may get that little bit but these 10 year projections, these seven year projections, you know, that’s just economic theory, most of which is useless. So, sorry for the long answer. You got me going again. You’re gonna get me going, Jake. No, that’s fine. I love it. I love it. I just think that always, always reducing taxes and reducing the size of government is just always a good thing. So I like it. I’m quite excited about the Trump tax plan. I think it’s great. It’s not everything I wanted, but or everything anybody wanted, but or even what he wanted. But I think overall, it’s gonna be really good for the economy. And that’s why I think we can, you know, see this business cycle kind of drag out a lot longer than many expect, but you know, we’ll see where we go. We will definitely see. Hopefully, the Fed won’t talk any year. Right. We’ll talk in a year and see what happened.
Jason Hartman 33:41
Yeah, absolutely. Hopefully, the Fed won’t get too aggressive on those rate increases, but right now looks like they’re gonna be pretty aggressive. So
Alan Beaulieu 33:49
we just see. Mr. Powell is a different man.
Jason Hartman 33:52
Yeah, he definitely is. Anything I didn’t ask you, or anything you just want to share as you wrap it up for the audience. And please give out your website. tell people where they can find the book in your other work.
Alan Beaulieu 34:02
Okay, the book is available to Amazon like every other book ever written, you can just google the name prosperity in the age of decline, or Google my name. Alan bullier. And, and really the two L’s I mean, in where the economic one is pretty easy to find our addresses ITR economics, really simple. You’re also going to find that what we push in the book and what we do when we talk to people is that it sounds terrible to say great depression and it will be terrible for a lot of people. But if you’re prepared, it’s the best opportunity of your life. You can do more for your family, you can do change your business, you can get aggressive, you can be great and philosophical and help people and you can be you know, just a wonderful human being while you’re making a fortune because you were prepared for what happens in a great depression. And you can use it for the you can use it for greed, but the reality is, it shouldn’t be viewed as this zombie apocalypse. have too much of that on TV isn’t dramatic economic change, if you’re prepared for you certainly can prosper through.
Jason Hartman 35:06
That’s the title. I couldn’t agree more. You know, there’s no such thing as a bad economy there are just changing economies and if you adapt, opportunity is everywhere, so yeah, no question about it. Ellen, this has been a fascinating discussion. Thank you so much for joining us today. Happy investing.
Alan Beaulieu 35:23
It’s been my pleasure. And thank you Jason, take care of yourself.
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