Jason Hartman starts the show by sharing his views of the socialistic policies adopted in Europe. This transitions into an interview with Nick Giambruno of Casey Research. Giambruno illustrates the issues with our pension system and explains how it will affect state and local governments. Later, the discussion covers cryptocurrencies and how it may take power away from centralized governments.
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
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 company leet solution for real estate investors.
Jason Hartman 1:04
Welcome to the creating wealth Show episode number 884 884. This is Jason Hartman, thank you so much for joining me today. We always appreciate you tuning in. And I know our show is eclectic, eclectic. What does that mean? Well, of course, it means it involves all sorts of different things. You know, we talked about deep real estate investing topics. We talked about the overall broad economy, the general business climate, we talk about things to enhance your personal life success, especially on every 10th episode. The shows that end in zero the 10th episode shows, but today we are going to have a returning guest actually a returning guest from my jetsetter podcast, which some of you may have listened to. That is Nick GM, Bruno, we’re going to talk a little bit about the pension crisis. And what does that pension crisis mean for real estate investors? Well, as I have long said it Think that we are going to see significant problems around the country and of course around the world. I mean, those are already unfolding especially in, in Europe, Europe, which is sadly over, as I say, Europe is over. Yes, I know. That’s a crazy thing to say. I don’t mean it’s really over Of course, it’s a it’s hyperbole, obviously. But I was born in Europe and it is so sad to see what is going on there these terrorist attacks, the the suicide of basically a continent through through bad immigration policies and bad socialistic policies and, and just insane amount of truth denial through political correctness. But be that as it were, we also have this to a lesser degree in the good old US of A, we have it around the world. It’s a global phenomenon. This is only a game of relativity a game of comparison, a game of a race to the bottom in a way As much as I say, it’s an amazing time to be alive. And it is I still mean that there are all these contradictions that take place in society, right? There are amazing things happening. And at the same time, there are apocalyptic things happening. It is a very, very interesting thing that that old Chinese saying, may you live in interesting times? Well, I think this would definitely qualify with, with everything that’s going on around the world politically and the divisiveness. It’s just mind boggling. It really, really is. And I had an interesting discussion. I think that’ll be our next 10th episode show with a very well known famous author, who will we have have coming up and I think we might play that as Episode 990, about the way people have become so divided around the world, because all of the targeting that really started I believe, with the company called Double click many years ago, all of the ad targeting and content targeting Everybody is just becoming more like themselves. And that is a phenomenon that I don’t think has ever really existed in history to the way it is today. You know, I’ll give you an example. I got trolled. Yes, I have trolls. And you know what a troll is, I’m sure. One of these disgusting, evil people, frankly, that goes on the internet on social media. And they start heckling you and trolling you and they have a complete lack of ability to think critically. And I would say that’s one of the scariest things we see on social media nowadays, an entire generation of people more than a generation, really, because it really spans all ages. But I would certainly say it applies most deeply and most sadly, to the millennial generation. They’re just complete lack of ability to think critically. It’s just mind boggling. You cannot have a discussion. You cannot have a debate. It’s simply devolves into personal attacks. We always we saw this, you know, of course with George Bush, it’s, oh, well, you know, eight years after bush was out of office, we saw people saying, well, it’s all george bush’s fault, I guess it still is. But now you have the new devil, Donald Trump. And certainly people on the other side of the spectrum, blame Obama for all kinds of things. And you know, there’s no shortage of bad behavior on both sides of the political spectrum. But the thing that is most disconcerting is the lack of ability to think critically, to actually have a debate on something where it involves thinking beyond the headline beyond the clickbait, beyond the selfish idea that one person has about themselves and what’s best for them, rather than what’s best for society in the world at large. This is the worldview we live in folks, and it’s probably only going to get worse. And my theory about this is that it’s because we are all becoming more like ourselves. And what I mean by that is that all of our media is so fragmented and so targeted. And in some ways, this is a great thing. All of our shopping experiences, all of our content belief systems are so targeted to our thinking, our whole news feeds are full of people that agree with us. Right? And that is a that is a dangerous thing. You know, we’ve certainly seen that in communist countries, you know, people following orders of Chairman Mao, of Adolf Hitler, Joseph Stalin, Joseph Stalin, probably the most evil person to ever live in the history of the human race, killed 10s of millions of people, you know, hey, communism, how’s that working? And look at the new self declared dictator of Venezuela now. I mean, it’s just mind boggling and hordes of people around the world, following orders of these dictators just believing in their, in their thing that they’re doing the right thing without ever questioning. It’s amazing some do of course, you know North Korea another great example communism, the the biggest disaster that has ever befallen humanity, communism, big government. That’s it. So I want to talk about bubbles for a moment before we get to our guests today had an interesting discussion on social media, where we were one of our listeners sent me an article about a house in Silicon Valley area that sold for Gosh, what did it sell for like $782,000 above list price or something like that? Now, folks, if that is not the sine of a bubble, I don’t know what it is. And you know, if it was a $25 million house or even a $10 million house and it sold for that much above list price, I wouldn’t be so amazed or concerned. But this above list price was only about it was it was about not only about a whopping It was a whopping maybe 30 percent of the original price. That’s how much it sold for above list. So that is certainly a sign that we are way, way past the bubble territory. However, here’s what is, well, here’s the hugely different factor from the old days from the last go round from the Great Recession, and there are many of them. But the biggest one nowadays, is the lending standards. They the you know, I gotta say, I’ll give the bank some credit and some lack of credit. They’ve just been a lot more conservative this time around, and a lot more legit in their lending practices. So the lending has not gotten very far out of hand. Of course, there are some signs that it gets a little bit out of hand gets a little bit frothy, but it’s not. It’s not nuts. It’s not as crazy as it was in 2003 2004 2000. And five, and folks, I had a front row seat for that I owned a traditional real estate company in Irvine, California. And we had an office in Newport Beach, California as well. I also owned a mortgage company, I had a couple different mortgage companies. And I remember I had with this one mortgage rep working for me, who was just essentially a crook. I mean, I just don’t know of any better way to say it. Of course, that’s a little hyperbole. Because, you know, did he actually break any laws or do any criminal things? Well, I’m not really addressing that, but I am saying that. And you know, and I got rid of this guy after I, you know, knew what he was doing, because I thought this is this is a ton of liability. But it was so commonplace in the mortgage business back then. That, you know, everybody was doing it. It’s, it’s kind of like your teenage kid says to you, when they get they get caught doing whatever they shouldn’t be doing. Well, Mom and Dad, everybody’s doing it. Now, of course, you know, that’s not an excuse, but it does make it A little bit more, okay? Because this is the problem with laws when they’re not enforced, or they’re enforced selectively by the government, then we get into this problem where if you want to compete, you’ve got to level the playing field. And you gotta, you know, when the speed limit when it says 65 miles an hour, the whole world knows everybody’s going to go 75 or maybe 80. And they know that and they figure, well, you know, that’s not too dangerous. But if they were to put the speed limit up to 75, or 80, then everybody would go 85 or 90, right. So this is the way human nature is, it’s the way the world works. Of course, we all understand this. But suffice it to say that the lending nowadays is not very out of hand. There are, of course, a few crazy examples here and there, but by and large, it’s fairly sound and that is why even though we are waiting past the point of fundamentals in the high flying cyclical markets, not in the linear markets. Those are not at all past the point of fundamentals. And we’ve talked about that. Remember three types of markets, cyclical, linear and hybrid. We like the linear markets in which to invest. And those markets are very sound from virtually every metric that we talk about, or you can find at Jason Hartman, calm, very sound. So we’ll talk more about this on upcoming episodes, of course, but I just wanted to point it out a little bit. I got a couple of book recommendations for you. A couple of books I have found to be very interesting lately. One is 400 things cops know. So basically, a veteran patrolman who has you know, cops have a hard job. I tell you, that is a really tough job. I would not want their job. But and you know, I knew that before diving into this book, but boy afterwards I Wow. And some of the stuff they know just it just blows my mind. Another one, which is not a new book, but very interesting and very good is the book after America by Mark Stein after America by Mark Stein, and that’s s t e y n. I really recommend you get that on Audible and listen to the audio version, because he’s so funny and snarky sense of humor. And you know, it probably comes out on the written pages, but in the audio format, it’s it’s just really interesting. So there’s a couple of them. I got a lot more and of course, you know, we’ve had a lot of these famous offer authors on the show over the years. Okay, before we get to our guest, some housekeeping, Jason hartman.com slash contest for the new Amazon Echo contest. Your odds are very good. I’m telling you, be sure to enter Jason hartman.com slash contest. Of course, we’ve got the venture Alliance mastermind coming up in Palm Springs, California, beautiful place that will be in October, check out venture Alliance mastermind for details. on that, and I want to say a warm welcome to our newest member step on one of our clients who’s actually been on the podcast before. It’s great to have you join venture alliance with a full annual membership and we look forward to seeing you in Palm Springs. And what else well, of course meet the masters of income property. We’ve confirmed john burns with john Byrne’s real estate consulting as a speaker. We’ve got some other very famous well known speakers we’re working on, but we can’t quite announce them yet, because it’s not formalized. But you will know their names and I know you’ll enjoy their talks and their material. This is in La Jolla, California in January. Jason Hartman comm slash events Jason Hartman comm slash events early bird pricing still in effect, and tickets are selling quick so get your tickets before the next price increase on that as we get closer to the event. Let’s get to our guest, Nick, GM Bruno and talk about the pension crisis, the inflationary pressures As it creates, which are great for real estate investors. Let’s talk a little bit about the fiat money of cryptocurrency and a whole lot more. Here we go.
It’s my pleasure to welcome back a returning guest and that is Mr. Nick gam Bruno with Casey Research. Nick, welcome.
Nick Giambruno 14:20
How are you? Hey, Jason, great to be with you again.
Jason Hartman 14:22
Tell us where you’re located today.
Nick Giambruno 14:24
Well, I’ve been running around a lot in South America lately, but right now I’m in meta gene Colombia. Good stuff. So you don’t say meta gene huh? meta gene? Well, it’s it seems to be a local local SEO managing but yeah, you can call it meta gene to good stuff.
Jason Hartman 14:42
So you haven’t been kidnapped yet? I’m taking it. You know, the kidnapping is way down in Colombia, fortunately. So that’s good, right?
Nick Giambruno 14:51
Oh, yeah. It’s actually much safer than a lot of people might believe. Yes, the violent crime is is down and You know, really a few you know, follow common sense it’s no more dangerous than any other large city and in fact it’s it’s quite a beautiful place and very inexpensive beautiful weather year round. It’s a nice contrarian lifestyle opportunity and in short
Jason Hartman 15:17
on good stuff. So now why do you say contrarian lifestyle? But what do you mean by that?
Nick Giambruno 15:22
Oh, yeah, so let me explain what I mean by that is that it’s not what people the average person believes it to be. The average person believes it’s like that show on Netflix Narcos or it’s Pablo Escobar, his drug lords battling it out on the streets. And yeah, that might have been true 30 years ago but it’s it’s it’s a completely transformed city and a completely transformed country. It’s it’s has a very high standard of living at a very low cost. And I’m a huge fan of the place.
Jason Hartman 15:50
Good good stuff. Well, what is occupying your time with research and writing? with Casey Research nowadays? What do you What are you covering?
Nick Giambruno 15:59
I’m covering A lot of different things. But in terms of the economic and financial situation in the US, I’ve been looking a lot at this this pension crisis that’s been long been a crisis, but it seems that it’s finally reaching a tipping point.
Jason Hartman 16:17
What is reaching a tipping point?
Nick Giambruno 16:19
Well, you see, you have all of these public sector employees have pensions, basically. And it’s interesting because pensions are it’s simply you just get a paycheck each month after you retire from your employer. In this case, it would be local governments state governments federal government, in the US but pensions as as, as I’m talking about here and basically disappeared from the private sector. It’s it’s you know, I think, less than 4% of private sector companies even offer pensions most get these 401 K’s which, in for many people is nowhere near as good as getting a promise. monthly check that’s basically equivalent to your monthly salary. So this is this is long been gone from the private sector, but nonetheless public sector, government employees still get this quite a generous perk. And so what’s happened is, is that they have pension funds to pay out these pension benefits and the liabilities have been, you know, they these public pensions can also use certain types of accounting that private private sector pensions can’t legally get away with. I mean, it would be fraud in the private sector, but since it’s in the public sector, it magically becomes legal. And okay. And what I’m talking about here is, each fund has an assumed rate of return. And this is you know, what this pension fund thinks it’s going to make on its investments. It’s it’s an assumed rate of return. So these public sector pensions choose ridiculously high assumed rates of return and what this does Is it has the effect of shrinking the liabilities, because those lot future liabilities are discounted at this assumed rate of return, larger rate or assumed rate of return, the smaller your current liabilities. So, these public pensions have used inflated assumptions to shrink, artificially shrink their liabilities for many years, many years.
Jason Hartman 18:21
But what why are we not surprised? Yeah. Yeah. So do you think the government especially at the federal level, will just bail all of these out? We know, there are pension problems. And obviously, California, Illinois, you know, every liberal state is always the most messed up of all of them. But when when the economies are so big, and there’s so much momentum, and it just takes a long time for the results of this irresponsible behavior to show up in any real way. And then of course, they can manipulate, manipulate, manipulate, kick the can down the road, ultimately, yes, there is a problem and someone’s going to have to come to the table. But will it just be the federal government doing a bailout and you know, printing more fake fiat money to do so. So they get their pension and nominal dollars, but in real dollars, it’s worth a lot less?
Nick Giambruno 19:12
Oh, I think that’s exactly the case. I mean, this is I can’t imagine a situation where it’s politically acceptable for the federal governor, the government in general to let to not honor their promises to their own employees, when they can simply print money. And so I think that is, that is what the most likely situation is going to be that the federal government through the Federal Reserve, we’ll just simply paper this over, but what they’ll be doing is trading like a local debt crisis. For a federal currency crisis that’s going to be terrible for the dollar. We’re talking about trillions of dollars. I think the latest estimate is there’s a $5 trillion shortfall just in these pensions
Nick Giambruno 19:56
across across the country. So and then Obviously
Jason Hartman 20:00
you’re Whoa, let’s just make sure people heard that number. Yeah, you’re saying it’s a 5 trillion with a T? Yes. Okay. And when does that show? I mean, it shows sort of consecutively in various years. But like, the question is, when do the chickens come home to roost here on this?
Nick Giambruno 20:22
Well, the chickens are coming home to roost, quite literally in a number of these places, when what will happen is, is that there will be so many liabilities for these funds that, you know, they’re going to have to pay out to the current retirees that the they’re going to, you know, run out of simply run out of assets. And they’ve, like I mentioned before they’ve shrunk, artificially shrunk these liabilities using these, you know, totally unrealistic assumptions. So it’s starting to happen and you’re seeing the funded ratios which is how much assets pension plan has versus its liability is going way, way down because they’re having to pay out a lot of money to these current and growing amount of pensioners and retirees and there’s not enough money coming in. And that’s also why you see taxes going way up in in the jurisdictions with that have pension problems, most notably in Illinois, property tax, I mean, property taxes are always most likely going to be the first thing that go up in any jurisdiction that has a pension problem, because it’s so simple.
Jason Hartman 21:36
Yeah. Why is the property tax the sort of the simple one, why is it not sales tax or tax at the state level on income or why property tax
Nick Giambruno 21:46
because you can ratchet it up by a couple of, you know, basis points or percentages a small amount, and it’s not as not as noticeable at first, as You know, your sales tax, you’re constantly reminded of it. And it’s, it’s, it’s maybe at first a little more low key way to squeeze people than just an outright increase in sales tax or the income tax. But we’ve seen this in not just in the US and Greece, in Greece, in particular, property taxes have multiplied, I don’t have the number off of my head exactly at the moment, but they’ve gone up. They’ve multiplied I think, like, at least three times in the past couple of years because of their financial situation. And I think you see it, you see, you’ll see the same thing. And in any jurisdiction, taxes are going to go up but in particular property taxes because these are, you know, generally property owners are wealthier and there have more to squeeze. So I think you’re going to see that
Jason Hartman 22:50
those big evil property owners, but what they, what they never realize, you know, especially the political left, is that everything in the world World is a pass through entity. And so all that does is increase rents. So for example, if you look at a place like Texas with no state income tax, generally speaking, I mean, I know it’s a little more complicated than that, but basically no state income tax, and the property taxes are very high. But guess what, folks, the rents are higher as a proportion to value. And in some of the Chicago land areas where we’ve sold properties as well as Texas is the same thing. The rent to value ratios are fantastic. So there’s always this compensating factor and it always hurts the little guy. They think they’re hurting the big guy but all the big guy does is pass it through to the little guy. So you know, raise corporate tax, and then the corporation’s raise the price of all their goods and services and who buys those the little guy? economics 101 right. But you can’t, you can’t get a liberal to understand this stuff. It’s just mind boggling how they’re so myopic. They say, you know, it’s true. Try telling this to Bernie Sanders. It just won’t work. So it’s crazy. Okay, so this pension problem is coming home to roost, and you think it’ll basically result in a federal bailout? I mean, that may be spotty, by the way. I mean, there are the are the cities and municipalities going to default? You say, no, it sounds like, right?
Nick Giambruno 24:20
Well, some of them, you know, it’ll be tricky for them to go bankrupt. So, it you know, they’re gonna have to find a way somehow, and you know, they can’t print their own money and they’re basically way past the point of diminishing returns of trying to squeeze the taxpayers and in certain jurisdictions, their state constitutions forbid them from reducing these extravagant pension benefits that they’ve probably these politicians in these state employees have promised themselves. So yeah, I really don’t see any other way than a federal bailout at some point. I mean, they might We might take a crisis, it will take a crisis to get to that point. But these pension plans are so insolvent and so underfunded that in the next stock market downturn, it’s very likely a lot of these things will just simply go bust. And that will be when that will be when the chickens come home to roost, I think is when the next market even just a cyclical recession, which the US is overdue for. These pension plans are already in a dismal situation at the height of an enormous stock market bubble and bond market bubble. I mean, what happens when things you know, there’s a slightest downturn in these a lot of these pension plans are going to go bust?
Jason Hartman 25:38
Yeah. Wow, that’s amazing. And that will ultimately result as it always does in inflationary pressures. So speaking of bubbles, would it be safe to say that there is a bubble in cryptocurrencies, I mean, Bitcoin or aetherium these things, this is like a crazy tulip bubble. speculators If you ask me, I don’t know, you probably defer because I have a feeling you’re a fan and and just let me state where I’m coming from here, Nick, I, you know, stated it on the show many times over the years, but I would I want to make it clear, I would love to be wrong about this, what I’m about to say, Okay, I love to be wrong. I just don’t think I’m gonna be wrong. The old saying never bet against the Fed, the most powerful forces the human race has ever known. Our governments and central banks. I’m not saying that’s a good thing. I’m just saying it is a thing. And, and cryptocurrencies. And gold and precious metals to, you know, are basically competition for a major product of governments and central banks, which is fiat currency, and I hate fiat currency. Okay. So that’s why I say I’d love to be wrong about this. But I’m, I’m not a speculator on any of these cryptocurrencies because I just think the government’s and the central banks around the world are going to squash them whenever they want, they’re going to make them illegal. China just shut down the exchanges for Bitcoin. I think it was because, you know, of course they always do this under the guise of they gotta protect us little people, right? But it’s always an ulterior motive. So I just wouldn’t bet against the Fed. I think that’s a pretty, pretty risky proposition you probably disagree with me.
Nick Giambruno 27:24
Well, I agree with you. I think there’s a This isn’t a black and white argument. I think. Yes, there is clearly a bubble going on in this space. I mean, you have all sorts of ridic I mean, I think Paris Hilton just came out with her new cryptocurrency that she’s like sponsoring. So I mean, if that’s not a sign of a bubble, you know, I don’t know what it is. But anyways, that doesn’t mean that there is in my opinion that this isn’t a sort of, I think it is a revolutionary technology, this blockchain technology. And I’ll give you an example of why I think it’ll be very difficult to shut down. You might remember Back in the early days of file sharing, there was something called Napster where everybody would share songs on Napster. It was a centralized way to share music. It was very and
Jason Hartman 28:11
I remember Napster is a two. By the way. I don’t know if this is still true, but it was true A few years ago, the two most downloaded software programs and the history of the world are both from Estonia, Napster and Skype. Or maybe it was because Ah, sorry. I mean, it wasn’t Napster. It was because I believe another music file sharing thing, but but Okay, so what about Napster? So what? I mean, it’s decentralized. That’s the point
Nick Giambruno 28:40
you’re making, right? No, I’m making the opposite point. Napster was centralized. All they had the government had to do was send its agents in and boom, Napster was shut down. It was quite easy to shut it down. Well, what came after Napster it was something called BitTorrent. And this is a decentralized way to share files. So basically, you can Download a movie that just came out in your local movie theater and DVD quality from little bits of pieces from thousands of people all around the world. And this is this is what’s known as BitTorrent. It’s It’s It’s a decentralized way to share files. And this has been around for I, you know, I, I’ve seen it around, it’s been around for almost 15 years, maybe more than 15 years. And that’s despite the US government’s best efforts to shut it down. Because it’s not possible to shut this down. Because it’s decentralized, they would essentially have to shut down the internet to shut it down. It’s just there are thought millions of users of BitTorrent all around the world, and you can’t simultaneously take all these people offline. It’s just not practical. So I
Jason Hartman 29:43
would argue that and I’ve used the example. Cocaine is a good example. Right? You know, it’s a commodity, right? But it’s illegal to trade and cocaine. Thankfully, I think it’s a terrible drug. I do not endorse it by any standard and you’re in Colombia. Which is also quite interesting. So yeah, so we’ll use cocaine’s a perfect example. Okay. It’s illegal to trade in cocaine. Now granted, some people do trade in cocaine, and some people use BitTorrent. But in relation to the population of the world, and being able to use Bit Torrent or trading gold or cocaine or anything else in in any real meaningful, widespread way, man, I just don’t have a lot of faith in it. I and I’d love to be wrong. You know, and I think the technology you know, the other thing about the cryptocurrencies is we got to differentiate the concept and the technology from the specific coin. So, they say, well, the dollar is not backed by anything. How many times have we all heard that? Well, that’s Bs, first of all, because it’s backed by aircraft carriers and fighter jets and all kinds of missiles and things right. We know these fake wars are aren’t likely to prop up the dollar and and by the way, your neighbor there Venezuela. Okay, just said it was going to move away from the dollar and just refused to trade in the reserve currency of the world. Well, I guess an invasion is probably coming. You know, we’re gonna we’re gonna have to do a regime change again and do a little nation building. So everybody’s playing our game, you know, it’s not it’s not right, but it’s the way the world is, unfortunately. So the dollar doesn’t have a limited supply and that’s the problem. Bitcoin has a limited supply, but the number of the variety of other cryptocurrencies, there’s no limit. There’s a theorem. There’s Paris Hilton coin, there used to be Kanye coin, there’s dodge coin. There’s Litecoin. There’s a whole bunch of these and you know, when there’s going to be a blockchain, crypto type technology and currency. I think unfortunately, it’s going to be us first a you know, maybe a US currency. See, but then a global currency and that that’s like checkmate on the entire planet when you have a global fiat currency controlled by, you know, the UN or some other corrupt organization like that.
Nick Giambruno 32:13
Oh, yes, I I completely agree with your your fears and in most of your assessment, let me just explain what I was meant earlier. I don’t know if Bitcoin or any of these cryptocurrencies are going to survive in the long run, all the points you made are completely valid. There’s no barrier to entry. Anybody could make one or you could make Jason coin if you wanted to. I could make Nick point. Yeah. You know, it’s we should
Jason Hartman 32:37
make Jason coin and I will inflate the hell out of it, because that will enrich me and impoverish my coin users. I’ll be I’ll be like Janet Yellen and Alan Greenspan and Ben Bernanke. Yeah.
Nick Giambruno 32:51
Yeah. So there’s no barrier to entry. I just find fascinating the underlying technology, which is this decentralized trust, which is What the blockchain is and I think there’s a lot of different applications for and who knows, you know, Bitcoin might not be the one it might be a different one but it’s just the fact that we can have this this kind of this kind of setup this kind of finance, it can be either it can be beyond finance and it’s it’s all decentralized so I think that’s a very good thing and I think it’s very hard to stop that yes, they could say oh, you Bitcoin is illegal. cryptocurrencies are illegal. It’s only terrorists use these things. Yeah, they could, you know, clamp down on it a lot. But it will I you know, I don’t think that even that would totally destroyed. It’s just looks like the cats out of the bag with regard to these decentralized technologies. But yeah, I don’t know which one is going to be in the long run, but I do I do like that. I do. Like the fact that these things are decentralized and they move power away from the centralized government down to the individual, which I think is a very healthy thing, but to go to your other. I agree
Jason Hartman 33:57
completely. I think it’s very helpful. But to
Nick Giambruno 34:00
go to your other concern, and I share this concern, I mean, you know, we see government’s trying to get rid of cash and push people into these digital bank accounts and so forth. And so we have the, you know, the war on cash, which I’m sure you’re very familiar with. Yeah.
Jason Hartman 34:14
So this this is all that before. Yeah.
Nick Giambruno 34:16
So this is this is a very real fear and a very a legitimate fear that the government’s might try to piggyback off of this technology for their own their own purpose, nefarious purposes. However, I don’t know how successful they will be because maybe they maybe they could I’m not saying they can’t. But the way these these crypto currencies and this blockchain works is it’s all done voluntarily by people around the world running these things. And that’s what makes them the central there is so decentralized, there’s 10s of thousands of different Bitcoin nodes and miners around the world, maybe more, and they they’re not doing this because you know, you know, the guy government’s forcing that they’re doing it voluntarily. So if the government were to come out with their own cryptocurrency, which is entirely possible, I don’t see how they could make it as resilient and as decentralized as the non state crypto, you know what I’m saying? The non state cryptocurrencies. So we’ll see. But that’s definitely a bad thing. And we should be on the lookout for that. I know, the IMF, and the Federal Reserve and all these central banks. They’re, they’re looking into this stuff they are, and we should be on alert of it.
Jason Hartman 35:28
Yeah. Yeah, definitely. Very, very good point. Talk to us a little bit about the geopolitical situation. And, you know, the one word we have never mentioned through this interview, which maybe we should have when you talk about the pensions and, and really everything is is the word of the year, and that is Trump. You know, I mean, where does he come in on the pension crisis and, and, you know, all geopolitics. We’re gonna let’s dive into that one first. But, I mean, there’s obviously we’ve had a regime change in the US and it’s a pretty significant one, I’d say. Not sure. He can get much done. The you know, the media hates his guts, obviously, but, and I think he’s reckless. But there’s some things I like about him some things I hate about him. So, you know, like any president, I guess, but yeah.
Nick Giambruno 36:13
Well, going back to what you’re saying about the dollar. Trump’s treasury secretary just yesterday threatened to kick China, the largest trading partner saw our saw. So if they’re not, if they don’t sufficiently comply with the sanctions on North Korea, so I think that’s that that is the that’s the big issue of the day is North Korea. But I think the larger effect on us as investors is that I think North Korea is going it’s the you know, think of it like North Korea is lighting the fuse on a trade war between the US and China, and I think that is coming. Trump did something last month, which is widely regarded as the first shot in a trade war. He used a very little known or law that unilaterally allows the president to investigate and punish foreign countries for what they perceive to be unfair trade practices. Now, when when there’s usually a trade dispute among members of the WTO, of which China and the US are usually those disputes are taken to the WTO. And it’s mediated in a multilateral forum. So with Trump doing this outside of that, and unilaterally it’s looked at as a very aggressive move from the Chinese against the Chinese and and I think this is no surprise, we all know what Trump’s rhetoric towards China has been. So that I think is coming and I think North Korea is acting as an accelerant to that because it’s, it’s so immediate, and Trump is looking for ways to tighten the screws on North Korea. He’s gonna look at China and he’s gonna pressure China on trade, which is something he wanted to do anyways. So I think that’s coming in. That’s going to be a very big deal.
Jason Hartman 37:59
What was So what does it mean to the typical listener out there?
Nick Giambruno 38:03
It means there’s going to pry if this trade war with China proceeds as it seems to be, it’s going to mean a lot of turmoil in the stock market, the bond market China holds a lot of treasuries. And, you know, Chinese officials are not shy about saying they would dump those treasuries if there was some sort of trade war with the US I think if this does proceed you know, just the average person is going to be looking at higher prices in the in you know, in the stored experiments inflation a lot so, yeah. Yeah, so, not good. It’s not good. No matter how you Yeah.
Jason Hartman 38:44
So it’s good if you’re investing for inflation, though, if you’re investing the right way, then you know, inflation makes the people in the know a lot richer, obviously. And, and most people It hurts them men, unfortunately. I just get the feeling that lights like everybody President no matter what they say or what their own position is, once they get in that once they get into the Oval Office, they just for whatever reason, whatever pressures, they endure whatever secret society really runs the world, you know, I don’t know where to go with it. But they all just have to support the military industrial complex, don’t they?
Nick Giambruno 39:22
Yeah, it is bizarre. And I’ll give you what I think is
Jason Hartman 39:24
it really is bizarre. Yeah, go I’ll give you what I think is the
Nick Giambruno 39:27
starkest example of this is when Trump was campaigning, he would put on his Twitter some very colorful language to say the least about Saudi Arabia and how, you know, all they can’t bribe me with their money and how terrible they are. And then and then a few months later, using very aggressive language to describe it’s nothing that any other president or any other high official in the US government has ever even come close to using. And then a few months later, he goes and does the sword dance, and by Before the Saudi King So what? What is going on like Obama? Yeah, what is going on here? I mean, obviously it’s has something to do. And I, you know, this goes back to the dollar. I think in a large part, the oil markets helped backstop the dollar and well, who was one of the largest oil exporters, and it’s Saudi Arabia. So this goes but also, you know, to the geopolitical situation with China. One thing China has been intent on doing and has tried to do so far on successfully is to get Saudi Arabia to accept Chinese renminbi in exchange for their oil that they import from them. That would be a game changer because that would totally affect the US dollar and Treasury market. Because that money is not being you know, China’s not needing to buy dollars to buy oil from Saudi Arabia, they can just use their own currency. They already have that arrangement with a number of countries including Russia, Iran, and I think Angola a number of other oil exporting countries. Saudi Arabia is the big one. And if they can twist the Saudis arm enough that they do it, that will be a not only a geopolitical earthquake, but a financial earthquake,
Jason Hartman 41:10
as we live in interesting times, don’t we? Do you think so? Like, you know, just your overall take on things? I mean, is it? Was it good news for for the economy or the country that Trump won? Or was it bad news?
Nick Giambruno 41:26
Well, you know, I, I liked some of the things he said, and I’ll say, you know, his tax reform, I would love it if he you know, he would kill
Jason Hartman 41:34
that my god that that will kill it, that will be awesome. Like if corporate taxes dropped that much, do you know how much money is gonna flow back on shore, if that happens, and how the economy is just going to boom,
Nick Giambruno 41:46
and we were talking a little bit before the show about this worldwide taxation of US citizens. Trump’s tax, you know, again, this is just in his proposal, you would go to a territorial system you would do away with the worldwide system and that is a big, big deal. For people who live in work abroad or or just businesses that have international operations, so, I mean, who knows if it’s actually going to get through, but that would be a big deal. So there were some things that I you know, I did like that.
Jason Hartman 42:12
Yeah, very interesting. Well, Nick, just wrap it up, give out your website. Where can people find you and your great writings and just wrap it up with any closing thoughts?
Nick Giambruno 42:22
Oh, sure. There’s a lot more of the topics that we discussed at international man calm and that’s the best place you can go to find all that Nikki and Bruno Casey Research. Thanks for joining us. Thank you, Jason.
Jason Hartman 42:37
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