Jason Hartman starts the show discussing taxes and how each presidential candidate would approach the topic of taxes. In the interview segment, Jason welcomes back George Gammon to discuss current macroeconomic trends. They examine current headlines surrounding the Fed and then look at whether deflation is a good thing. Later, they give some predictions on interest rates.
Jason Hartman 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made 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 on now. here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 0:54
Welcome to Episode 1546 1546 And, of course, this is a very significant presidential election year. And I tell you, the two sides could really, I don’t know that they could be much farther apart in terms of what their ideas of tax policy are and you know, fiscal policy really, but we’ll we’ll zone in specifically on on the tax aspect of fiscal policy, not to be confused with monetary policy, which is what our Federal Reserve does. Fiscal policy is the taxing in the spending. And when you look at the two sides of the aisle, they are really quite staggering. For example, on the corporate tax side, now, we all know that, you know, Trump in his landmark tax plan, he really lowered corporate taxes and incentivize companies to bring their activities back on Sure, they were offshoring a lot of this, they are still to a large extent, offshoring a lot of their money. But some of that is repatriated. And that’s in the long term good for the UFC. Sometimes, you know, you always want to incentivize the right behaviors, right? Those of you who have kids or spouses or employees, or animals, if you have a pet, you want to incentivize the right behavior. Look, we’re all animals at the end of the day, and we’re all going to be incentivized by certain things and, and disincentivized by other things. So with wealthy people who have activities offshore, and wealthy companies who have activities offshore and have money offshore, you want to get them to bring those activities and that money back on to your shore. And the way to do that is not by reading raising taxes it’s by actually lowering them. So you become the bright, shiny object. So you become the desirable place to do business and so on corporate taxes. Here’s the difference, right and much more significant other areas, but we’ll just start with corporate right. We’ll go maybe, well, semi alphabetical here. So the corporate taxes, Trump says 21% Joe Biden, when he’s awake, says 28% on income taxes and payroll taxes. Trump says 37% Biden says, And are you ready for this? Are you ready for this? Biden says 52% Wow, that is absolutely astonishing. We are are moving toward if that happens, we are literally talking about the type of tax climate you had before Margaret Thatcher in the UK, where people and money were just fleeing the UK. And just getting out of that environment because it was so heavily taxed. Think about it. Can you imagine if your federal tax bill is 52%. And you live in the Socialist Republic of California, where they want to raise the highest tax rate to I think it’s 16.4%. So you would be paying 52% to the federal government, you’d be paying 16.4% I mean, this is if it all happens to the Socialist Republic of Kenya. California, and if you live in New York, it’s about the same. Okay? So, so just call those the same if you live in Connecticut, you know, you know, any of these places, right, that are just crazy out of their mind, Oregon, you know, it’s just insanity, insanity. This is the kind of stuff you would be suffering from. And then imagine California or the feds, but California wants to do it. And you know, it’s more likely it could happen in California more quickly than at the federal level. Right? They want to do a wealth tax that would say, listen, we don’t care if you made no money last year. If you made zip, zero, nada, nothing, right? Just because you have money. We’re going to take it and you know, just because you have assets or money now, not to mention that that money wasn’t already taxed. Many times over on the path to accumulating it, certainly you paid income taxes, certainly you paid all sorts of taxes on everything, property taxes, use taxes, you know, blah, blah, blah, million taxes, just to get to the point where you could accumulate the wealth. But now, they say that every year, you got to give a little bit of that to the government. And what if you don’t have the cash? What if it’s not liquid? What if it’s a family farm or family business, and it’s got a valuation attached to it? Right, everything does, everything can be valued. And then they say, Well, you know, maybe you had a bad year, where you’ve got this is business for example. And the business is worth, you know, few million dollars, not a certainly not a big business by any means. And then the the government in California says Okay, your wealth tax. And you say, well, we had a terrible year last year, we lost a million dollars last year. How come you’re asking us for money? Well, because you have an asset. And because you have the asset, you got to pay us. Well, we don’t have the money. You know, we only have the asset. Oh, okay. Then you better refinance the asset. And if you can’t refinance it, you better just sell it and liquidate it. And what if it’s a bad time to liquidate it? I mean, this is like, this is like the biggest wealth destroyer of all, and that is the D word. That’s the biggest wealth destroyer of the mall. What’s the D word? You’ve probably heard of it. Divorce, Divorce, don’t get a divorce. Okay? Because the divorce is the biggest destroyer of wealth that’s ever been known. And it’s not and I’m not saying that because He got half she got half whatever, right? I’m saying it because it forces people to liquidate assets at in opportune times. You never want to liquidate an asset at the wrong time. You want to liquidate at the right time, you want to be able to time that liquidation to do it at an advantageous time, obviously, but here, you could be forced with a wealth tax and they want to do it at the federal level to just listen to the Marxist AOC and Nancy Pelosi and all the rest of them, right. They could force you to sell acid. This is what happens with the state taxes, folks, a state taxes when somebody dies, and the kids have to pay tax. The Heirs have to pay tax. They force them to liquidate what could be a good business family farm. That’s the common one. Because farms are notoriously illiquid, but any kind of business, it doesn’t matter doesn’t have to be a farm could be a widget factory widgets, widgets are us Incorporated. And they’re forced to just liquidate that lay everybody off. And you know, sell the business to pay the tax just to pay the government. That’s why that’s so destructive. Okay, so you’d pay 52% of the feds 16.4% to California or New York or whatever leftist state you might find yourself in, and then you pay maybe a wealth tax, not to mention, you paid a whole bunch of other taxes. Don’t forget you paid sales tax property tax a million other taxes, right. You paid gas tax every time you filled up your tank, when comrade Obama wanted to tax the electric cars that he was in favor of. He said everyone should drive a proletariat electric car. And he said, Well, because they’re not buying gas. They should pay per mile. Well Wasn’t that the whole point Obama is just, you know, be better for the environment to drive an electric car? Well, no, you gotta pay per mile because you’re not paying gas tax, right? That’s what he was saying. unbeliev Where do they get this stuff? These people are out of their mind. Okay, what about small business taxes? Okay, so we went over corporate taxes, income and payroll taxes. And then we talked about state tax and wealth tax, but small business taxes. Well, Trump says 29.6% but Biden says 39.6% Hey, you might as well just tack on another 10%. I mean, heck, if you’re giving money to God, God can live on 10% that’s the traditional ties when you tie that’s 10% but the government needs like 66% of your money. insistence insanity. Unbelievable. Where do I get this stuff, so Trump 29.6% Biden 39.6% Okay, what about capital gains and dividend taxes? Whoa, hold on, you’re at hold on your app right here. You got your hat in your hand. Hold on, because it’s gonna blow off. Trump says 23.8% and sleepy Joe Biden says 43.4% oh my gosh almighty. And not only that, Joe Biden says, We’re gonna eliminate the 1031 tax deferred exchange on real estate. So when you sell your real estate now, you’re going to pay us 43.4% when you sell it, because that’s the capital gains tax. Okay. And whatever you have leftover, if you want to reinvest, you can you know with that 57 percent you got leftover 56.6% actually is what you have leftover after you pay Joe Biden. So, folks, this is just mind boggling presidential race that we’re in. These two candidates in terms of their tax policy could not be more different. Now, regardless of what your political persuasion is, you just have to ask yourself the obvious question, what behavior would be incentivized under? Trump? Even if you hate him, hate his guts if you want because he does say some wacky things. I’ll be the first to admit by Joe Biden says some wacky things too, like, Can I smell your hair? Or do kids want to feel my legs? Now he said some weird weird, weird. Okay. From says offensive stuff, but Biden, oh my gosh, it’s creepy, creepy, creepy. Anyway, what behavior would be incentivized with each other These administration’s it’s clearly obvious, clearly obvious. All right, we got part two of George gammon today, let’s get to him. Remember, you can get the meet the Masters recordings, Jason hartman.com slash masters, thank you to all of those who have purchased them, and you will really, really love them. I’m getting good feedback so far. I’m sure there’ll be more to come. So that’s great. And be sure to contact our investment counselors for any questions you have. Also course they can give you links to webinars for the Alabama market, asset protection, the funding webinar, we’ve been talking with a lot of clients about the funding they’ve received. And I’m hearing good results on that. We did that a few months back and I wanted to kind of watch it play out and see how happy people were and so forth. And it’s, it’s looking good. I’m hearing good things you know, people are saying they got about 30 $40,000 in funding right away and then they are getting more as time goes on, but right away, they got about 30 $40,000 in zero interest rate funding. So that’s fantastic. That’s fantastic. And they can use that for investing and so forth. And if you want to check out that webinar, it’s at Jason hartman.com slash fund. That’s Jason hartman.com. Slash f u n b for fun. And without further ado, let’s go to part two of George gammon. George, you did a fantastic video recently about the things the Fed, or really the powers that be in general don’t want us to know. Do you want to talk about that a little bit?
George Gammon 14:43
Yeah, well, three, three things first, was that you always hear that deflation is bad and it’s the Boogey Man. And I think I think it’s actually good if you look at deflation in and of itself, especially if it’s produced by free market forces, which if we had a free market capitalist society, we would Let’s see deflation and it would be very healthy deflation because entrepreneurs are out there producing goods and services, and they’re trying to compete with one another. And they’re doing it more efficiently and they’re pretty producing things at lower prices. And that’s just that increases demand. That’s really kind of the line in the sand, you got to ask yourself, Is this type of deflation, increasing demand? Or is it decreasing demand? And that’s where, you know the most of the deflation that we have. Now. It’s kind of a scary thing, because of the amount of debt that we have in the system. But I would argue that that’s like saying that, you know, heroin isn’t the problem. The problem is that XYZ person is addicted to the heroin, right? heroin in and of itself isn’t the issue. The next one was that inflation is good. We always hear that from the government or the Fed especially, or central banks that do they have these inflation targets? Right. 2%.
Jason Hartman 15:55
And, well, yeah, well, now that’s of course a moving bogey as well. I don’t know if you heard Powell. Latest spin Oh, that that is earth shattering. You know, I made a big deal about that on my podcast either yesterday, the day before, but this is a sea change potentially folks, the Fed has just lifted all the constraints and they’ve come out and said, we’re not going to forecast and act in a forecasting or react to forecast. We’re going to wait until we see it. And then we’re going to change and you know, that’s like a giant oil tanker, it takes a long time to turn that big baby around. And if the Fed if this is their new philosophy, then I mean, that is fairly at risk.
George Gammon 16:39
Right? They’re always moving the target. It’s nonsense, or at first, it’s like, let’s get up to 2%. Yeah, and once they get up to 2%, they say, Well, actually, it’s gonna average 2% and we’re under 2% for 10 years. So now we can run it 10% and it doesn’t matter because it’ll just be an average as though right. Now, that makes sense. I don’t know.
Jason Hartman 16:58
And they’ll change the timeframe. They Do the average over, they only take out a couple of years that are anomalies and they don’t like and make it weighted weighted average versus an average average. So
George Gammon 17:08
yeah, exactly. So this is just the the next step in the long line of just, I don’t want to call them lies, but just kind of the smoke and mirrors game are playing when they just want to admit that they meaning the government has to have inflation, it’s there. It’s the path of least resistance for a government that’s 27 trillion in debt, and this debt is just going to be ever crushing them, as it increases with these deficits that we’re seeing in COVID. But, you know, so you hear that this inflation, this low type of inflation is actually good. And then the third thing that I went over is who actually owns the Fed, and I focused on the New York Fed, and the usual suspects are there, you know, the top three I think it was Citi, JP Morgan, Goldman Sachs, but the the next two, I think, would really shock A lot of people in the sense that it was HSBC and Deutsche Bank. So a lot of people when I bring up, you know, what’s look at the Fed’s p&l, not just their, their balance sheet, they say, Oh, that’s nonsense, because they only get a 6% dividend and everything that they that they make as far as profit from their, I don’t want to call them investments. But when she goes right to the Treasury, and I’m like, yeah, maybe maybe not. I mean, the Fed has a surplus account that they even admit to, that they have money in that’s in excess of what they repatriate to a government and after the dividend, that’s one. But then what most people aren’t thinking about is listen, just because they might not get a billions and billions and billions and billions and distributions, as owners think about all the money that they’re making or the profit they’re making, as a result of maybe being close or having the ear of a Fed governor being Oh, Tony, you know, I mean, you got you. I mean, 2008 It’s great. Example. You know, they get the bailouts from the government or the Fed. And now most more recently, you know, we had the repo spike in September, and it goes up to 10%. I mean, if the Fed wouldn’t have stepped in right there, I don’t think people understand. I mean, we’re done. The banking system is done. They there’s no way that you can have the dollar funding market operate with 10% interest rates. And so they come in, they basically bailed out the banks right there, in my opinion, and then you have what we saw in March and it’s not just now the Fed now, it’s the government coming in with their stimulus and bailouts that that are, like a government put is what I call it now. And that’s bailing out the banks to a certain degree, but then you look at all the investment banks, and they’re they have record profits. And is it any surprise because they think there’s a Fed put and, you know, to they, I think you could argue that there could be one Whether it’s psychological or was director and plus it, but so their downside is cap, but their upside is almost limitless. So you look at the risk reward and that’s all benefiting the bank. So
Jason Hartman 20:11
it’s socialism for the rich and giant corporations. You know, it’s
George Gammon 20:14
especially the big banks. Yeah. So that’s kind of the three things that I outline. But as far as the deflation example that I gave, it was the late 1800s. And we saw that everything I think, went in the right direction as an example that the average hours worked for the few positions that I saw went down pretty much across the United States, the wages went up. In some case, wages went up dramatically, like 50%, just in the span of 10 years from 1890 to 1903. And so then you say, okay, that’s a good thing, but keep in mind that from 1865 to the year 1900, we had almost 50% deflation. 55 zero percent. So we’re era Yeah, yeah. So well, the gold standard, really. So what you have is, you know, 52 cents in 1900 could buy what $1 could buy in 1865. So you have the prices of goods and services going down, down, down, down, down, while people’s wages in nominal terms, not just real terms, but in nominal terms are going up and up. And then you have GDP, increasing dramatically. GDP from night, or excuse me, from 1865 to 1900, went up by almost 100%. And that’s in nominal terms, and people say, Yeah, but the population increased, right? Look at the per capita GDP that went up as well in nominal terms. So I mean, how can you? Well, that’s a rhetorical question. You can’t produce an environment that’s better for the poor and middle class where their lives improve more dramatically than something where their wages are going up and the cost of what they buy daily is going down consistently. 3% clip per annum. I mean, that is the best
Jason Hartman 22:04
goes, I was just gonna say could you attribute any of that deflation for that long period to the Industrial Revolution, though? Yeah, you know, that was,
George Gammon 22:15
I think most of it, you can attribute to that. So that’s the free market. That’s why I was saying, when you have a normal, not a normal, but the free market where it’s very few regulations where people can actually compete and you have, you know, Jupiter’s creative destruction that’s actually allowed to take place and you have all these things. You don’t have manipulated interest rates, you have hard money, you have sound money, that is absolutely key. Then what happens is guys and gals like you and I go out there, and we produce whatever we can produce to pursue our own self interest, and we compete with one another. We’re very competitive. I know you’re competitive. I’m extremely competitive, and we’re always going to try to gain market share. We’re going to try to make more money, the way we do. That is by producing a good or service that people value more than the money in their pocket. And so we’re always trying to find better ways to do things. We’re always trying to find ways to create new technologies to deliver our goods and services to the general public at a cheaper cost. And that benefits everybody. And as those prices go down, and their wages stay the same, not go up, that increases demand. That doesn’t decrease, man. So it’s the fact that we have an economy now that’s based on debt, asset prices and confidence. That’s the reason why we we could get a deflationary spiral, that would be a bad thing, because people can’t get they can’t get debt, and they need the debt to further increase their consumption. So that’s an example of a demand going down because there’s just no more debt. There’s not an expansion of debt, but that’s not deflation fault. That’s the fault of the underlying economy. Mm hmm.
Jason Hartman 23:59
So a lot Have it, you know, plays in whether there’s inflation, deflation, whatever. And, and, you know, you can divide it up between consumer prices and asset prices for sure. And, you know, I know you have a lot to say about that and some great stuff there. These interest rates, George are insane. I mean, they’re, it’s just got to be a completely artificial market, in the interest rates. Where do you think we’re going and interest rates are just notoriously hard to predict? Because, you know, especially when you have policymakers intervening all the time, right, you know, where do you think we’re going with this interest rate stuff and, and I’m sure you believe it’s dysfunctional and has causes a lot of now investment and such and, you know, people to do improper things that they wouldn’t normally do, and obviously hurts, savers and usually older people. But you know, what are your thoughts about that? I just thought I’d throw a few things out there give you something to chew on. Well, let’s let’s think through the Fisher equation, and I’m not sure if you’re familiar with the Fisher equation very, very simple, but but it has a dramatic impact. So the Fisher equation is just, if my memory serves me right here it is the real interest rates plus the rate of inflation would give us nominal rates. So you’ve got, let me write this down here. So we’ve got the real rates, real interest rates, because it has to be a cost to the use of money. Because when a lender loans the money, they have an opportunity cost because they can’t use the money for something else. That’s the basis of interest rate, time value of money, etc, right? Yeah, that’s fair. And then you take the real rate of inflation, and you add it to that opportunity cost. And that should be the interest rate in my eyes.
George Gammon 25:50
Yes, that’s correct. That’s basically the Fisher equation. An easier way to look at the equation I think is it was the same equation is if you take nominal rates, minus in Inflation that gives us the real rates run everyone. That’s pretty much common sense right there. Right? So if the Fed pegs The rate at zero, so they peg Fed Funds at zero. And let’s say that we actually have deflation, that the economy we have all this debt and the economy is trying to get it out. It’s trying to flush it out of the system. So as an economy, we’re having deflation, okay. Well, if they’re pegging it at zero, they won’t let it go negative. If we have a, let’s say, negative two rate of deflation, well, what that’s doing to the real rates, is it’s increasing them, right. And if we have increasingly high real interest rates, that makes it harder for people to borrow, that makes the money more expensive. So the only way the only release valve for the government if the Fisher equation is true, which it obviously is, is to allow The rates to go negative. So this allows the Fed funds rate to go negative, and therefore, that would allow real rates to go back to zero or to negative where people could actually afford to take on more debt. You see, so my point is, the feds backed up into a corner, where if and I’m just saying if the system stayed the same way as it is today, meaning that they had to abide by the Federal Reserve Act. And so that’s another type of what I’m talking about is them not being able to take bank reserves and inject it directly into the economy through just let’s say, a Fed coin and bring it to your app. So that’s a whole other topic conversation. And I think they’ll go around the Federal Reserve Act, but if they abide by the way the system is set up. Now, let’s say the Fed would have no choice at some point then to take rates negative they they have to just because of Fisher equation, because if deflation is going down because of this, oh, Over indebtedness, and I’m not just talking about consumer prices, I’m talking about assets as well. Then the real rate of interest, like we said goes up and up and up and up. But if you have the real rate of interest going up while you have deflation, that just feeds on itself. And that creates a positive feedback loop that gets really, really ugly really fast. So they’d have to take and they’d have to, like get great, further negative to opening up the affordability to increasing debt with consumers and businesses in the real economy. Yeah, and homebuyers, new homebuyers, everyone. Yeah, so that’s kind of I’d have people look at the Fisher equation. If they’re trying to figure out what’s going to happen with interest rates moving forward. Now then you’d have to handicap on top of that. What are the chances that the Fed circumnavigates the current system, especially based on what we’ve seen them do since since repo and since March where they pretty much abandoned every single thing that Written in the Federal Reserve Act, they’re buying junk debt. And I’ve read the Federal Reserve Act. And I can promise you nowhere in the Federal Reserve Act, does it say that the Fed can buy a corporate debt or corporate junk debt for that matter. And obviously, they’re doing it. So if they get around that, then they can create inflation without having to rely on the commercial banking system. Because right now, the main way that they can get em to increase meaning more currency units chasing the same amount of goods and services, is by the banks lending new money into existence, right, by creating loans. So the deflation his argument is, well, the banks aren’t lending, and there’s no consumer appetite for debt because we have these positive interest positive real rates, right, that’s crushing the economy, and therefore, there’s no money that’s being created, money is being destroyed. And that’s deflationary. That’s basically the crux of their argument, right? But what they’re not considering They might be considering it, but they’re giving a low probability or I would give it a high probability is at some point the Fed will look at Japan, they’ll look at the ECB, the eurozone, they’ll look at these negative rates. And though they’ll say, listen, we cannot take rates negative here in the United States, because we have the reserve currency. And we have this infrastructure, meaning the bond market that is completely reliant on rates being positive, at least, once it goes negative. It’s not like the German boons going negative or jgbs. It’s a whole different whole different animal. I agree with you on that. They’re gonna try to get around
Jason Hartman 30:35
it. Yeah, you probably have more than that thought. But I just didn’t want to forget to ask you this, because I think my viewers and listeners want to know George’s opinion on this. We were talking a few minutes ago about the target rate of inflation, you know, 2% that the Fed has publicly stated, you know, that’s that’s their their goal. You know, that’s relates to the Phillips Curve and the relationship between inflation and unemployment rates, but There does seem like I have a feeling you’re gonna disagree with this. But there seems like like a valid argument you can make to have some inflation in the system as long as the highly manipulated GDP is increasing, and the population is increasing. You know, it seems like there’s a there’s a logical argument to have some inflation that’s relative to population and GDP increases. Does George gammon Think so? I have a feeling he’s gonna say no, but what is what do you
George Gammon 31:30
know? I don’t I don’t see the upside for that. Okay. I guess the argument is the economy needs more money if it’s growing.
Jason Hartman 31:37
Yeah, right. There’s more people. There’s a bigger economy, people.
George Gammon 31:41
Yeah, but I just say that you just you just divide the currency units you have into a lower amount. But so let’s say we had dollars right now we had, let’s say we had $100 and the entire economy, and we’re like, shoot, this is getting cumbersome. We don’t have enough currency units to transact because I have to wait for that guy to sell his cow in order for me to have currency and to trade to this person being restricted, right? Why just say okay, well, let’s not increase the amount of dollars. Let’s just create quarters. Let’s create dimes. Let’s create pennies. And that’s how I get around that.
Jason Hartman 32:12
Yeah, right. Right. Right. Right. And it’s interesting also, that there’s this giant coin shortage going on, which makes me suspicious that there’s, there’s something behind that either a digital currency on the way, which I think that’s going to happen, obviously, at some point, at least, China’s certainly moving in that direction. Smart for them bad for the people, though, or just the fact that it’s just too expensive, or there’s going to be a lot of inflation in the system. And those coins are going to be meaningless. I mean, why, you know, cost, I think it costs 1.16 cents to produce a penny. Like, you know, how did we get here? This is just obvious that there’s massive inflation in the system.
George Gammon 32:52
Yeah, and I don’t I think that that’s a great point. I think it goes back to what we were talking about with the Fisher equation, and how the Fed has painted themselves into corner where they have to take rates negative, but they can’t take rates negative because it blows up the whole system. Yeah. So how do you get around that? Will you ban cash? And then what you do is you have let’s call it UBI, or whatever that’s funded by universal basic income. I know. Yeah, so it’s, but it’s funded by the Fed’s balance sheet. So that’s a direct way to get around the banks to inject more currency units into the real economy without the banks having to create more loans. And so I think that’s kind of going to be their rationale. Obviously, they’re going to sell it as this is for your security. This is for your safety,
Jason Hartman 33:41
benefit. Avoid terrorism, drug dealers, trafficking.
George Gammon 33:47
it in right it’s the freedom dividend that you deserve as an American, so it’s freedom dividend is $2,000 a month, but in order to get it, you just got to download the freedom dividend app. on your phone, and then you’re gonna have a bank account with the Fed, just like JP Morgan, just like the TGA. The Treasury general account, just like the primary dealer banks, Jason Hartman. Well, you might not because you probably opt out like I would, but yeah, right. Average Joe, let’s say is going to download the app and they’re going to have an account with the Fed. And the Fed is going to create new bank reserves, just like they do with JP Morgan, when they do quantitative easing, and they buy treasuries, and instead of the Fed buying assets from you, they’re just going to simply increase the amount that’s in your account by $1,000 with bank reserves
Jason Hartman 34:38
and that’ll be your UBI universal basic income right there. And then you go on the phone and you got to spend that money on the phone and guess what if they don’t like you or you commit a crime or they’re you know, thought to have committed a crime, they’ll just shut you off. And you’ll have you won’t have any spending privacy at all they’ll know every, you know, unit you spend somewhere
George Gammon 34:59
and where Spend it, how you spend it how fast you spend it. And then if they don’t see velocity increasing, what they’ll do is they’ll just reduce the amount of time that you have to spend your freedom dollars or you put an expiration date on it to discourage saving. That’s right. Unbelievable. Yeah, they could say, okay, Jason, if you don’t spend this $2,000 in 30 days and expires, but it’s gone, just just
Jason Hartman 35:22
like your frequent flyer miles in your airline program or that gift card that you didn’t use, you know, yeah. Really scary stuff. George, you think we’re going there?
George Gammon 35:32
Yep. Yeah, I don’t think they’re gonna have a way out. I mean, if you are under the assumption that the Fed has any level of intelligence in the 900 PhDs at the Fed, that’s debatable, but you can’t, if you and I were at the Fed, and they said, Hey, Jason, George, we need to create inflation because we have to bail out the government. How are we going to do that? Well, what you and I would most likely do is go we’d Study Japan, we’d study the eurozone, we’d figure out okay, why didn’t this work? Why hasn’t Japan been able to get it? And then we’d sit there and we’d go over the obviously have more access to more data than you and I do. If you and I can figure this out, right? I mean, they’ve got to be able to figure it out. Oh, sure. Yeah. And then so they’re reporting to the powers that be and they’re saying, Okay, this is why Japan didn’t create inflation. Okay, how can we get around this? And the only answer is to get around the commercial banking system and get velocity up and even that might not work. But that’s that’s kind of the Hail Marys. So it the only other option really, is his belt tightening and austerity. So if you think that, you know, with politicians, especially in the United States, they’re always going to take the path of least resistance. And so think about how politically palatable that would be for a politician to To go out there to their constituents or to go on, you know, Fox News or CNN or whatever, and say, Hey, guys, you know, what we need to do for the next 10 years is we just need to produce more than we consume, right and need to tighten our belts, and we need to go through the 1930s are
Jason Hartman 37:16
very old fashioned and nobody would do it and raise
George Gammon 37:18
money. And you guys need to live beneath your means. Yeah, you need to your standard of living has
Jason Hartman 37:25
been down decrease
George Gammon 37:27
dramatically for the next 10 years. Or what we can do is we can just give you money to spend every month, which do you choose?
Jason Hartman 37:35
Yeah. Obviously, we all know what they’re gonna choose. Yeah, it’s, it’s, it’s crazy. It really is. Well, George, you know, just wrap this up for us. You know, are there any I’m sure there are questions that you know, I didn’t ask you of course that maybe you just want to say anything. Wrap it up with some, you know, closing thoughts for our listeners and viewers. If you would
George Gammon 38:00
Well, I always say that in today’s time, you can be prepared or you’re going to be a victim. And I think what we’re talking about with not just inflation, deflation, everything that’s going on the fed with money printing, quote, unquote, you’ve got to look at hard assets. I mean, you just and I don’t care whether you’re a gold bugs silver, if you’re a real estate guy or gal, you just you might obviously you want some some dry powder there in case we get, you know, the stock market going down, you can take advantage of that, but but you’ve got to have hard assets because you just don’t know what they’re going to do. And we know that it’s to their benefit. They’re incentivized to create not just inflation, but a lot of inflation, right? And therefore, you don’t want to be on the other end of that if they’re able to achieve it. So again, he obviously you’re the real estate guy, so I defer people to you. And I’d be very careful about the real estate as well. I mean, these urban areas I have to postpone rest. I just I just don’t think you want anything to do with that, especially. And we didn’t talk about well acts in California and all this nonsense. Yeah. So you got to be very, very, very careful. But start considering hard assets right now. I also like commodities. And as you point out very well, and you have for over a decade that all a house is is just packaged commodities. So I’d encourage people to not only understand this stuff, but to start figuring out how they can apply what we’re talking about to their current portfolio or maybe their their everyday lives when it comes to you know, the urban areas and social unrest. That’s pretty much what I end on. Yeah,
Jason Hartman 39:41
I and George, I would agree with you see hard assets. I like real estate the best or the commodities that make up the real estate, the copper wire, the steel, the glass, the the lumber, the petroleum products, the concrete etc. all the ingredients of a house. Those have intrinsic value regard arlis of what any currency on earth is doing. Everybody just needs those intrinsically. They have their own value, regardless of being indexed to a currency like the dollar, the yen or the Euro, or whatever. So I agree with you there, definitely. And stay away from the urban areas and stay away from politically left leaning areas. I think we can say with certainty that the left leaning areas are literally becoming to us a trumpism shitholes. And it’s it’s just my home state, the vast majority of my adult life, the Socialist Republic of California is so sad to see what is happening to that beautiful state. And they’re, they’re just ruining it. I mean, the policymakers are just destroying that state, and especially the urban areas within the state. So you know, you look at San Francisco, you look at Los Angeles, where I grew up, especially bad there, but just the state in general. And you know, you look at New York. Yeah. It’s just unbelievable. I mean, I just cannot. There’s just no excuse. And these mayors, these left leaning mayors of these cities, they should be indicted for not protecting the property and the people that live there. That’s their solemn duty is to do that. And they’ve let us to send them to state of anarchy. I mean, these businesses are being ruined lives are being ruined. People are being assaulted, killed, attacked. This is unbelievable that this is happening in the US.
George Gammon 41:33
Yeah, that’s the best way to say it. And, again, you can just ignore this. You can have cognitive dissonance. You can try to rationalize it. Yeah. But it’s not going away. You’re not going away and you’re going to be a victim.
Jason Hartman 41:46
Yeah, you really are. George, you have a fantastic group that I’m a member of, and I just love it. That’s kind of a pro version that you offer. Why don’t you tell us about that and give people a link where they can find out More.
George Gammon 42:00
Sure. So that’s a partnership deal I have with Lynn Alden, and Chris McIntosh, Lynne Alden is an extraordinary mind. She’s a research analyst, I guess you could say. She’s huge on fin twits. And then Chris McIntosh has been a fund manager for many, many years. And they see the world in a very similar way to you and I, to say the least. So we set up this online forum for people. It’s called rebel capitalist Pro. It has research from Lynn and Chris. We do live streams for members where they can ask myself Chris Lynn questions, and then the user generated content is fantastic. And then it’s just a great resource for people but I always call it a sane space, right? Because we have all these safe spaces at local university. And I call this a sane space because for people like you and I, you know, we go online or you go to your Facebook feed or something like that, and it’s just filled with just insane. Yeah, whenever you go online, so this is a way for people who kind of see things the way we do to congregate to help each other, and then to use that research to be prepared and to make more money and to not only survive, but thrive in a world of out of control central banks and big government. So that’s a join.com forward slash Pro.
Jason Hartman 43:32
I’m chuckling because that’s George’s tagline, how to how to survive and thrive in a world of out of control central bank’s good stuff. So the link again is George gammon.com. forward slash, forward slash pro and that’s your rebel capitalist pro group. Yeah, good stuff, George. Hey, thanks so much for joining us. Thanks for having me. Happy investing. Thank you so much for listening. Please be sure to subscribe. So they Don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.