In this episode, Jason Hartman returns from his European travels and weighs in on the European mindset of scarcity versus the US mindset of abundance. In the interview portion of the show, he hosts Harry Dent. They talk about attractive tax incentives, bubble-mania in real estate, and his prediction on the financial and debt reset of our lifetime.
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
So you’ve heard my rants about how our financial system is rigged, and I’ve interviewed hundreds of experts to back up those claims and help you align your investments with the most powerful forces in the world, governments and central banks. I’m also using a perpetual wealth strategy with my income property investments that you should check out. It has enhanced the security of my liquid assets, boosted overall ROI and shifted money away from the banksters my friend Pat Donahoe, who’s one of our venture Alliance members, runs paradigm life and he has a free report that you can download at be your bank.com that’s B your bank comm check it out today. Welcome listeners from around the world to episode number 869 869. This is your host Jason Hartman, who is Very happy to be reporting to you today from New York City. More specifically Queens, New York. Yes, I am back on US soil. I flew from Oslo, Norway to New York last night and made it here I flew on a beautiful 787 Dreamliner, which I think is the nicest commercial plane in the sky. Of course, when I took the venture Alliance group last year to Dubai, we went on the a 380, also an amazing aircraft. And that one is huge. It’s just giant and the way Emirates does come up, they do they do a really great job of it. But for my money, I kind of like the Dreamliner, the best because it’s the most high tech of the mall. It’s got a cabin that’s pressurized to I believe 6000 feet, you don’t get as much jetlag, there’s more oxygen in the air and Well, hey, the air is thicker. In fact, it’s so thick, you could cut it with a knife. Not really, of course. But that’s how thick the air is in Cairo when I went to Cairo, Egypt in my 81 country journey. Not recently This was many years ago, that air is so polluted you could cut it with a knife. It was disgusting. absolutely disgusting. But yeah, I’m glad to be back and I ended my, my sort of European Summer of Love, if you will, early, I just kind of got honestly kind of got sick of dealing with the, the European mindset, you know, there I have a real love hate relationship with my, my birthplace, the continent of Europe. And you kind of have to talk about Europe as one big thing, because it’s almost like saying the us you know, different states within the US are like the countries in Europe at least size wise, right? Of course, culturally, they differ quite a bit and historically, they differ quite a bit. I completely understand that. But yeah, you know, there there are some things I hate about the USA and some things I love about Europe and some things that I hate about Europe and love about the USA. Some of the things I do not like very quickly, and I’ve talked about this before, I’ve talked about the unemployment rate in Spain and Portugal and Greece and the economic disasters in, you know, in all these countries, Italy, don’t forget that one. I mean, France, where people don’t want to work more than 32 hours a week. In fact, they probably think that’s too much. And they go on strike all the time and have this over entitled, socialist liberal attitude. And I gotta tell you, it is just really depressing. The, the, the European mindset, my ancestral homeland, my birthplace. that mindset is so and I know these are sweeping generalizations, right? So a sweeping generalization will never be fair. I completely Get it. There’s a million exceptions to every rule. You know, that’s why you shouldn’t be a racist because there’s a zillion exceptions to every rule. Right? And you know, you can’t judge people like that, right? But generalizations do in life have their place. Okay? Let’s just be intellectually honest about it. Because they’re efficient, right? They’re not always fair. Of course, they’re not fair. And any person, any thinking person will listen to a generalization and go like, you know, generally, hey, that’s kind of true, but specifically, it’s certainly not. Okay, so, that said, that’s my disclaimer about stereotyping, which is wrong, you know, in many ways I get it.
Jason Hartman 5:41
The European mindset is like this small mindset of scarcity versus the American mindset is of abundance. And, you know, Europeans, constantly bash Americans because we don’t have socialized Healthcare. And you know, I’m like really is is that your whole thing? Is that is that your whole life’s thing of free healthcare? That’s what you live for. Like, in the US, at least a lot of people I know in the states of course, there’s a lot of losers in the US. Of course, we all know that we’ve all watched Jerry Springer. But, but, but, you know, many of the people I know, they want to do something great with their life. And here, you know, the Euro mindset is like, well, I got to have free health care, and I got to have my big long vacation every year. And you know, it’s like, Am I gonna make 2000 euros a month? It’s just this getting by mindset. And you know, an interesting book by Viktor Frankl which is a you know, great book Man’s Search for Meaning. It’s a landmark book really kind of talked about a This is a bit of a leap here, but not too much of one. I don’t think so. Stay with me before we get to Harry dent, by the way, that’s our guest today, Harry dent is back on the show. And I’ll tell you about that in just a moment because there’s a little odd twist to this Harry dent interview coming up here. But yeah, you know, Viktor Frankl talked about how people in the concentration camps, when they gave up, they would trade their food for a cigarette. Because, you know, it’s just like, effort, right? I’m gonna, you know, just indulge before I go, right. That’s the kind of attitude and if you look at Europe, the smoking it’s still so prevalent there. I know it’s a leap. I’m not saying that but but I think when people look at people who want to do something great with their life, they will try to be health conscious. They will try to be fit and They will try to eat right? They will not be smokers because smoking is like absolute toxic poison. Okay? They, when you’re going somewhere and you have a sense of future of expectation about your life, when you want to do something great with your life, you don’t treat your body like crap. Okay, as a general rule, that is true. Now of course your you know, I can see the emails coming, dear listeners. Well, I know all kinds of people that are out of shape and very successful. Well, I didn’t say it was just about money. I said it was about mission. It was about the sense of contributing about doing something big in life. And of course, usually people that do something big in life and make a big contribution tend to get a lot of money thrown at them as well. So you know, it’s a chicken and egg question right chicken and egg which came from So, yeah, I’m just, I mean, the the European mindset just built on conservation and scarcity. And, you know, can you imagine all of the great inventions, right, that took place throughout history? Imagine if the Wright brothers, when they were inventing the airplane, imagine if they had to every step they took, they had to think about, well conserve this. What about the environment? What about OSHA? What about all the regulations? You know, all of this stuff, they would have never gotten anywhere, they would have just been so bogged down in really secondary concerns, okay. And I admit, as an economist, right, externalities are a legitimate concept, the factory that creates the widgets, pollutes, right? And that’s called an externality, right? That’s a cost outside of the actual cost of producing the product. It’s a cost that’s forced on to the rest of us usually because there will be some degree of externality of pollution that will occur with every every bit of production, right and every economic stimulus, which is what production is as an economic stimulus. Anyway, that’s enough on that one. But suffice it to say, I’m glad to be back. Now, I want to talk to you about an article real quick, then we’ll get to Harry dent. But first, I don’t want to forget a couple things here. Go to where do you want to go to enter our contest? You want to go to Hartman education comm slash contest, Hartman education.com slash contest. We will wrap that contest up here in May, I guess about a week and make sure you enter for the Amazon Echo. I can’t wait to get back to my echoes. I have three of them in my house, listening to my every word, but I can call an Uber car. I can order food. I can ask it a question trivia, you know, tell me a joke. It’s pretty cool. So be sure to enter to win at Hartman education comm slash contest, and we love your comments and your questions there and we will get to those on the air as well. So it’s a good way for you to participate in and contribute to the shows and we appreciate that as well. Okay, so when I got to my hotel last night, I saw a USA today that I had not seen in many weeks being in Europe, and the cover story was number of homes for sale sinks to a 20 year low. The number of homes for sale sinks to a 20 year low and the sub the sub title is baby boomers are deciding to stay put reducing options for first time buyers. Wow. This isn’t a connection to our guest, Harry dent. I don’t know what else is okay. Now, Harry, of course, you’ve heard him on the show. He’s been on the show like five times now, and this will be the six. But this interview is kind of weird, because we screwed up. Yeah, well, I’m not gonna even say we I’m going to say I screwed up. But my screw up is going to be particularly, I think, interesting to you the listener. Why? Why is that? Well, it’s because and this happens occasionally. I do. I do this occasionally. I’ll record a bunch of interviews, and then I will literally just lose them. Yeah, I know. This is one of them. Okay, so I was sorting through some of my old interview recordings. And I found this interview by accident when I was looking for another old interview that never got posted. This was recorded about a year ago. So why is that interesting? Well, it’s interesting because Harry dent is always big on making predictions. And a lot of them don’t come true. And a lot of them do come true. And so I think it will be particularly interesting listening to the one year ago Harry dent today on the show, never before published. This is a interview you have not heard. And we will have that here in just a moment. But why is this interview thing interesting about the subtitle that says baby boomers deciding to stay put reducing options for first time buyers? Well, first of all, I think that subtitle to the USA Today article is slightly misleading, because hopefully, at least in most cases, baby boomers aren’t selling a home that a first time buyer would be buying. Hopefully, they’re selling a mid or higher level home. Now one of the things that Harry dent predicted, I started following Harry dent back in the mid 90s. 90s boy, that was a long time ago. Time flies when you’re having fun. Okay, so I started following him way back then have read many, many of his books. And he was one of the people that made it really interesting prediction. And basically based on demographics, he said that by 2010 to 2013, we will have baby boomers who are cashing out and the stock market will plunge because they will cash out of stocks to a large degree, and they will cash out of their mcmansions. So the prediction way back then, I mean, he made this prediction way in advance, you know, very far out into the future by just simply looking at the ages of people, okay, and what age they would be in 2010 to 2013. he could, he could easily predict that as a demographer, and an demographic economists way back then right? Because, you know, it’s pretty easy to know how old someone’s going to be the future, right? Simple math. And so he predicted that they would cash out of their big mansions. And that would be a good buying opportunity for both stocks and mcmansions. Now, of course, you can’t simply use demographics, and especially age demographics to predict the entire economy, because as we all know, and have learned painfully at times, that there’s a lot more to it than that. But this is one thing, and it is interesting. But here, this article is contradicting the very early Harry dent theory, saying that, hey, the baby boomers, they’re just standing foot. And the article goes on to say, you know, why people don’t plan to sell their homes. Well, 63% of these baby boomers Okay, say that their home meets their needs. Yeah, they don’t need to sell 16% say they’ve got a load Interest Rate Mortgage. So, you know, no urgency to sell 15% recently purchased the home, and 13% say they need to make some improvements. So I don’t know exactly what that part means, but implies to me that instead of moving and selling, they’re just gonna do a fix up or remodel or maybe an addition or something like that. So pretty interesting stuff in light of Harry dent. And I just wanted to share that with you today. So I think that’s about all I’ve got time for. We’ve got to get to the interview, but I have so much more to talk to you about. And we’ll definitely be doing that on the upcoming episodes. Wednesday will be a 10th episode show. And I’m not sure which one I’m going to run for that. I may not even run a guest. The guest may be yours truly. I don’t know. Maybe I’ll do the 10th episode show myself. And as you regular listeners know, when we do that So show every show that ends in zero, we go off topic and talk about something of general interest. So we will see what’s coming up Wednesday for that. But right now, let’s get to Harry dent. Make sure you go to Hartman education comm slash contest and oh, Also, make sure you go to Jason Hartman calm and click on the events section and get your early bird pricing for our upcoming meet the masters of income property event in January tickets have been selling like hotcakes. I mean, wow. Thank you for all of your support everybody. We have been selling tickets like crazy, they are flying off the shelf. So be sure to get your tickets for meet the Masters in January, early bird pricing in effect, and you can do that at Jason Hartman calm and also of course, remember, property tracker and the one hour onboarding for the first 20 people that I talked about. on last week’s episode, so that will be up in. Well, when it fills up, it’ll be up. Okay, here’s Harry dent. It’s my pleasure to welcome Harry dent back to the show. You’ve heard him on the show several times before. His latest book is, of course, the demographic cliff. But he’s got a new book coming out very shortly entitled The sale of a lifetime. He’s also entered the newsletter, economy and markets, author of many, many books over the years. I started following his work about 20 years ago. Harry, welcome back. It’s great to have you back on the show.
Harry Dent 18:41
Nice to be back. Jason.
Jason Hartman 18:43
Good to have you. So you are coming to us from your new home in Puerto Rico.
Harry Dent 18:48
Hmm, yeah, I I’m loving I’ve had to travel to Australia and I’m getting ready to go to London. So I haven’t been able to spend as much time here as I walk there. Bye. Wouldn’t want to tell you, people would be surprised you hear it’s a bankrupt country. Never know what we’re on.
Jason Hartman 19:07
Yeah, yeah. Good for you, good for you. And you have not yet taken advantage of these phenomenal Puerto Rico tax rates, these incentives that we have. We have done a few shows on that topic before that it’s enough to fill the whole show. So let’s not go down that rabbit hole now. But listeners, let me just tell you, if you’re considering a move to Puerto Rico is pretty darn attractive if you have your own business, and if you can make it work and qualified for these tax incentives. And Harry, I hope you’re gonna work on that soon because Wow, it’s pretty amazing, isn’t it? Oh, yeah,
Harry Dent 19:40
I am working on it. I didn’t move here for that because I have a vacation home here and I decided to put my primary home in San Juan as well.
Jason Hartman 19:50
And yes, I am going to work on the tax advantages and I can probably say maybe 50% of my taxes, not as much as somebody thinking Go along here. But I tell you that great place to live and unbelievable tax advantages without having to give up your US passport. It doesn’t get much better than Puerto Rico, that’s for sure. Well, hey, there’s of course, a lot going on in the world. You’ve made a lot of predictions over the years, some have been right on some have been some misses. And you you admit that which I like, what’s going on now? And what are the latest Harry dent predictions? We know
Harry Dent 20:27
Jason, it’s really simple. We’ve had now three stock level two real estate in the US and many countries and then massive new real estate bubbles around the world. This is bubble mania. There’s never been this many bubbles this global around the world ever going back even to the 1700s I’ve studied all models and the funny thing about it I keep getting on media and debating people ever said Oh, it’s not a bubble because of this or because of that. I don’t care what the reason is for a bubble when things start to go out exponentially faster than the fundamental trends, which is very predictable and very trackable. You’re in a bubble, but it looks like a whole class like a bubble walk like a bubble. It’s a bubble. We’re involved in everything. And the biggest bottle that is already burst, which we predicted many, many years ago is the commodity bulk commodities are down 6070 80% iron ore, Gold’s down 40 to 50%, silver down, you know, 50 to 70%. I mean, people I keep telling people that when bubbles burst, they don’t just correct, they crash. And that’s what’s happening and more and more markets and Vancouver’s real estate, which I warned a year ago was going to follow Singapore and put sanctions on foreign buyers and they did and they’re down 20% in five months in real estate real estate doesn’t crash is bad. Stop. So again, I’m seeing more signs. And yet we’ve been early about warning about this global modern plastic, but it is happening and I tell you 2017 can be the worst year for the stock market since 1930. And so and real estate will follow and the big thing is when China’s real estate bubble burst, that’s the biggest single bubble in the entire world. And when that goes, it goes all the way around the world and real estate so donjon people, you better love your real estate or get rid of it. You should not even think of being in stocks at this point. So it save and reinvest when the bubble burst. It’s that simple.
Jason Hartman 22:49
So Harry, first of all, you know Vancouver you mentioned Vancouver real estate, I mean that is far and away the most insanely overvalued real estate on planet Earth. San Francisco is right up there, I think too. And there are some others, of course, but I want you to just make the distinction for our listeners, if you would, because most people that aren’t in real estate, they talk about it kind of generically. And they say, well, real estate, but you know, we always try to divide the world up into three types of markets, the linear markets, those are the boring ones that don’t make the news. But the cyclical markets, those are Vancouver’s San Francisco, all of California that is expensive Northeastern markets, South Florida, etc. And then hybrid markets, which are kind of in between the two I’d put Phoenix in that category, for example, maybe even Atlanta now, almost as a hybrid, rather than a linear. And, you know, of course, London, Paris, Hong Kong, those are all very cyclical markets. But you know, when you look at these, like boring markets around the world, places like Memphis where everybody makes one of our local market specialists provide said, You know, I love Memphis as a rental property owner because everybody makes $40,000 a year and they have a blue collar job. You know, what do you think about those? I mean, do you? Do you kind of parse that up at all in your business or not?
Harry Dent 24:11
Yeah, absolutely. To me, the biggest theme is the greater the ball, the greater the burst. And in the United States, in between the two great mountain ranges from the east and west. Most of the country is not about that. They didn’t bubble that much last time. Hasn’t bottled up as much this time, except now in Denver, and Dallas and Houston, and often involve more around the fracking thing and all, but generally, yeah, if you’re in an area where real estate is not well, then it’s not gonna burst as much the bubbles are on the coast. San Francisco, la Seattle, Vancouver, Boston, New York, San Diego, Seattle, you know, name them all. Yeah,
Jason Hartman 24:57
Harry Dent 24:58
And like you said, last Dallas are in between you know, they’re there. I agree with it. We have three layers as well. Non ball shum eyeball and major model and then you go around the world by China. Shanghai. Oh my god, it’s insane.
Jason Hartman 25:17
It’s insanity. Right? It’s total
Harry Dent 25:20
800 800%. Yeah.
Harry Dent 25:24
I mean, is that gonna crash or what? Yeah,
Jason Hartman 25:27
it has to it can’t do anything else what? what goes up must come down, right. And those have gone up. Just extraordinarily they’re just crazy, crazy markets. The other distinction that people need to make instead of saying real estate generically and you’ve done it so well, when you talk about the demographic cliff and in really your predictions back to the I believe the late 90s. I remember you talking about this, how come 2010 to 2013. There are going to be baby boomers. Getting rid of their large homes, and there will be a McMansion bubble. I don’t know if you said McMansion bubble I think you may have and and and and so it’s not just a matter of segmenting the market geographically, and looking at certain cities that are bubble oriented cyclical cities, but also looking at the product type, right? The small necessity bread and butter housing versus mcmansions. Can you tell us about that a little bit?
Harry Dent 26:29
Yeah. And vacation and retirement home. So, I mean, the the demographic trends are favoring the everyday starter home. Although this new generation is gun shy about real estate because they’ve been the first to see it go down in their lifetime baby boomers never saw real estate go down so they thought it can’t go down while they’re wrong. And then you have the mcmansions, which is a peak of the high end by which come later in the real estate cycle and early 40s, and nobody’s going to need a seven square foot or 4000 square foot house in the future as their kids leave the past. And then there’s vacation and retirement homes that don’t peak until age 63 or 65. And when and they’re the ones that are most discretionary, they will crash the most in a downturn, but they will be the fastest to come back. There’s one more way But baby will buy. But here’s the thing, Jason the most important insight, which I had to work on for many, many years to get. I usually take a nice sector like real estate, okay, peak spending in real estate is age 41. So I’ll just move the birth index forward to see when that’s going to be. I didn’t realize that real estate is different. It lasts forever. And when I saw Japan’s real estate crash go down and still not bounced. 26 years later, I realized Oh my god, real estate lasts forever. And when old people start dying even faster than younger people are rising the buy has the baby boom was so large a generation and out no ways that even the generation to follow my bet that you’re never gonna have rising net demand for housing again and housing. Real Estate will never be the same. And then that’s in Japan. And you so correctly pointed out that Japan’s problem is largely in famous Harry dent speak a demographic problem is people are sellers in real estate. And there are 8 million now this is out of 100. I know maybe 100 million Max, 90 million households and about 8 million houses are bacon. Then you go to China where they have a problem where they overbill everything because they’re just planning on the future forever with a government driven pop down economy which is saying they got 27% of condos and houses empty in major cities and real estate’s going up because the Chinese buy real estate don’t even rent it out leave it
Jason Hartman 29:16
empty and they are they are the biggest speculators aren’t a
Harry Dent 29:19
lazy Yeah, yeah, they really are.
Jason Hartman 29:21
They really are. Well, what about in the US though? I mean, the population is expanding. Granted, our economy is built on a house of cards, which pretty much every economy around the world is so I don’t know for more that much worse off as crazy as we are over here. You know, what, what are your thoughts about some of these, you know, more linear markets? I mean, are you are you okay with those? Do you think there will just be a waiver if this bubble burst as you say it’s going to or what do you think no,
Harry Dent 29:50
bubbles only burst. When real estate bubbles burst is typically 50 to 60%. Bound stocks burst shut The 80 90% down to my knees at 90%. And commodity bubbles burst every 30 years, just as we saw after 1920 and 1980. And now 2008 2011 recently, and stock bubbles come now every generation, especially every other one like the 1930s about, and these things don’t just correct the money or wait and they don’t feel the way they build exponentially and they crash. Stocks crashed twice as fast as they know. Real Estate takes about the same time for about a bill to crash and so the commodities and commodities crash the most. So, again, in my new book, the sale of a lifetime, I really develop a model the best one is around the stock. Stocks will crash twice as fast as the model fails and you don’t measure the bottle from when the last one Otherwise, in the last bear market, you measure when the trends go exponential versus the linear trends you talked about. That’s when you say, this is when the bubbles beginning in bottles tend to go back to where they started. So, so when when bubbles burst all these economists and political experts, I Oh, that was a black swan. I’m like, they’re idiots. This is not a black swan. Bubbles build systematically, exponentially, and then they burst even more exponentially, especially with stocks. And so we can predict that and we’re saying look, this stock bubble is going to burst and it’s going to probably take into late 2019, early 2020. And it’s going to go back down to at least a dow of 5500. And probably back down to 3800 to 4000 where the ball started. This is not getting This is what Bumbles do, if you look at them, which nobody does, because the reason Jason people don’t understand bottles or see them is they don’t want them to stop. You’re getting things for nothing,
Jason Hartman 32:13
right? It’s It’s like being drunk, you don’t want it to stop. It’s fun, you know? Interesting.
Harry Dent 32:19
Well, so last time
Jason Hartman 32:20
you were on the show, I mean, and you’ve made some pretty risky predictions over the years, I gotta give you a credit for sticking your neck out like that. Last time you were on the show you were talking about how gold was going to go down to 750 and maybe even down to 250 per ounce. And it’s, it’s at 1338. Now, of course, it was at this crazy peak of almost, you know, it’s like 1900 and something dollars, I think at the peak a few years ago. What do you think is happening with gold? I mean, that prediction hasn’t hasn’t come true yet. Or were you too early with it? Or did you change your mind or and just curious, no, no, no. Jason
Harry Dent 32:56
in late April of 2011 when silver Kit $48 that was quite the top all the way back to 1980. We said sell this solder. You were right about that and said silver and gold and gold actually ended up going about 5% higher in the September and then crashed $50 from 1800 to 1050. And when it went 2050 in late last year in late 2015 we said gold is due to bounce again, bear market Valley, not a new rally. And it has I said Gold’s going to go to around 1400 Well, it got the 1373 it may yet get the 1400 5000 and I think the next move is down to 700 750. And the next year to wow and here’s the thing, Jason people didn’t get gold saw been following up since 2001, after, after being john for 18 years or something, since its peak in 1980. It rally the most after 2008 when it saw this unprecedented money printing and of course a natural assumption is in place from a third party money, we’re going to get inflation. Inflation because we’ve been saying that de leveraging bubbles the leveraging creates deflation. It kills money. And that’s in gold goddess and early late 2012, early 2013. The Japanese went triple down on quantitative easing. And shortly after that Europe came back and said we’re going back for more than a bazooka from Mario Gianni and guess what inflation Yeah, going. Yeah,
Jason Hartman 34:59
yeah. All right, right
Harry Dent 35:01
here. Holy crap. We’ve been making the wrong assumption. We thought this would create hyperinflation, it’s not in gold die. And it will never come back for a number of years. And you know what we’ll make it come back the next 30 year commodity cycle in emerging countries who are much more commodity intensive. We may see the biggest gold and commodity rally in history, but it only come from the early 2000 20s to late 2013 when most robots are
Jason Hartman 35:33
dead. They’re there. They’ve been wiped out, right? Yes. And I’m definitely not a gold bug. So don’t worry about that. But yeah, um, it sounds like you’re pretty bearish on on everything is there? You know, what is your recommendation right now just keep your powder dry, don’t do anything? Or is it you know, linear, boring real estate or what is it?
Harry Dent 35:52
cashflow, positive real estate and not so overvalued barriers can be good It only sector running out to these rising millennials and maybe some retiring baby boomers. But otherwise, yes, it’s Get out of the way and about the cash and or maybe want to take some risks, short gold stocks, short real estate oriented indexes, but I tell you, most people, I’d say just sleep well at night, you’ve had the greatest ball in history. And I’m giving you unbelievable gains beyond any time. Just take it, take your chips off the table and wait for this fall the crash and it’ll crash faster in some areas like stocks and commodities which have already crashed, load mostly and slower in real estate and stop and just buy that in in the next two, three or four. Six years and you’ll be like Joseph Kennedy, in the early 30s. He sold right went on and bought everything in the market 20 you know, a 90% off. That’s the way to make money in deflation, there is no way to make money as nothing goes out in deflation except maybe the highest quality bond and
Jason Hartman 37:26
as you pointed out on the last last time I had you on the show though. It’s in a deflationary or stagnation airy environment, the only thing you can hope for is yield. There’s nothing else there’s no capital appreciation. Obviously. It’s a yield game
Harry Dent 37:41
entirely healthy bonds when you’re going to get crucified. Yeah, yeah.
Jason Hartman 37:48
But that linear cash flowing real estate gives you a pretty good yield even if the price of it goes down, you know, with with all the multi dimensional aspects if you can make 20 25% annually While everybody else is just getting creamed, relatively speaking, you’re doing you’re doing okay. Right.
Harry Dent 38:04
Yeah. And I agree with that because the millennials who are by are forced to rent more now and so the rents will hold up, even though the real estate values go down and then in here in this market, of buying multifamily apartments and stopping complexes and renting them out, only if you can do it with positive cash flow, then when they go down in price, you can buy more of them at a lower price and do the same thing. So that is the one one strategy I see. But only in the right areas. You can’t do that at South Beach, Miami. Oh god, no. Let’s go and Vancouver could you possibly buy something and rent it out a positive cash flow and so overvalued?
Jason Hartman 38:51
No, I mean, let me let me tell you about this ridiculous property. I was just, you know, surveying the Vancouver real estate market a few weeks ago. It’s so insane. It’s absolutely psychotic. This house was it was about 1000 square feet. It was $2,495,000 I believe, basically $2.5 million. And, I mean, it was old. I don’t know how old it was, but I just couldn’t believe it. I mean, you know, where I spent most of my adult life in Irvine, Newport Beach, Southern California. You know, I thought the prices were nuts there, Vancouver is insane. And most of that is attributable to that Chinese money. I mean, it’s strange how like Chinese and Middle Eastern buyers are so willing to be so speculative. They just don’t seem to care about fundamentals of yield, cash flow cap rate. It’s all just buy, buy these properties in these trophy areas. And
Harry Dent 39:54
it’s just nuts. I don’t get it’s real simple. They’re the dumb money right now. They they have so much. Same thing with the Japanese lady. Yeah, yeah, absolutely goes out in a bubble. You have unprecedented wealth for no good reason. And then you tend to just blow it you think, Oh, I’m a genius, right? And you buy more and more real estate at overvalued prices and you’re setting yourself to lose. Absolutely, unbelievably. And so the Chinese are the dumbest buyer. They’re the ones paying 100 million dollars for an 8000 square foot box on Central Park. In New York. This is crazy. It’s
Jason Hartman 40:39
psychotic. You know everybody’s a genius in a bull market. When you look back to the late 80s and the 90s. And you know, the Japanese buyers, they bought Rockefeller Center and you know, paid the taxes on it for several years nicely and then sold it back and lower price. It’s it’s a pretty great deal for the US has In one half
Harry Dent 41:03
artists ready smart money and dumb money at the top.
Jason Hartman 41:07
Yeah, and it’s just crazy.
Harry Dent 41:08
Anyways, I’m telling you that Chinese real estate bubble is so a stream compared to the fundamentals there, that it’s gonna burst and when that bubble burst is even more than the Japanese and more than any us investor they have so much. People can realize that Chinese saved like 3040 5060 70% of their income unheard of here and then they put it 75% into real estate. And the other part in cash, they don’t they don’t even invest in stock. You don’t there’s no way to understand how the collapse of the Chinese real estate bubble and again is up 678 900% in the last 20 Yours is going to impact especially the most of fluent families and investors in China and they’re gonna pull back on everything they’re not going to be buying in San Francisco anymore or in Boston or New York or Miami or London, or Vancouver, which is the worst. That’s why Vancouver is dropped the most as far the Chinese buying there is the most intense of any major city I’ve measured in the world. They love Canada, they love Vancouver have their money. You have to realize the Chinese are not just they’re not buying real estate. They’re getting their money out of China in a way that they’re now allowed to 50,000 a year. Did they buy a $20 million condo they got $20 million out of their country and still legal.
Jason Hartman 42:58
Yes, they’ve got they’ve got tuition. Number one, they’ve got a potential currency arbitrage. They’ve got a potential to make money in the real estate which of course they won’t we just discussed that. But they also get the Brinks truck factor. You know, they’re basically fleeing their own government in essence, and doing it legally by buying us real estate, right?
Harry Dent 43:18
Yeah, that’s exactly you got to Jason that’s exactly what they got hired laundering money out of China. Can they know the smart people the richest people in China? No, it’s a top down communist government is over building over investing over in debt faster than any emerging country in all of history and the bubbles gonna go down. So they want to get out ahead of it. They’re the smart money and but they’re buying dumb real estate in the US and the UK and Canada. And so far, they want to buy in English speaking countries where they invest Their children to get a good education and learn things. So that’s countries that are most modeling. And these are the cities San Francisco, London, Vancouver to Singapore. First a month when the Chinese realize they’re screwed. And they don’t have any money. Wow.
Jason Hartman 44:22
Yeah, it sure is. It’s amazing. Harry, give out your website and tell people they can find out more about you and then maybe give us one closing thought.
Harry Dent 44:31
Yeah, just, I mean, Harry dent.com. You can get on our free daily newsletter economy and markets. They all all tend to offer my latest book, The Democratic clip and then assuming the sale of a lifetime if you just pay for shipping for 95 and that’s real call. And then for more about us debt, research comm you can see All of our services, but we just tell people look, get on our free newsletter. Get to know us because we’re really different. But we have very good insights, as we’ve tried to show here. And then thanks, and you love us trade up and you can listen for free on our free newsletter. Good stuff.
Jason Hartman 45:20
Well, Harry dent, just closing thought anything you want to just wrap it up any maybe a question? I didn’t ask you or anything?
Harry Dent 45:26
Yeah, I mean real simple. I studied long term cycles, not just short term, but mostly long term. And this is the greatest reset is going to happen in the fall and the financial assets fall in our lifetimes, the greatest since the early 1930s. Imagine if you had gotten out of the market in late 1929 like Joseph Kennedy, and then waited until the late 1930s to to reinvest you could have bought Crap. In 1932 we’re learning three are any real estate or any surviving calm and made money? decades and decades? Yeah, fantastic.
Jason Hartman 46:13
Fail alive. Absolutely. Harry dent, thank you so much for joining us. Okay.
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