In the first part of this episode, Jason Hartman shares his thoughts on End of The World Syndrome, migration, Hewlett Packard leaving Silicon Valley, and The Final Frontier. Afterward, he hosts Adam to talk about JP Morgan relaxing their mortgage standards and the start of a housing bubble that may lead to a great recession. They also decipher Jerome Powell’s dialogue and its meaning to the investors.

Announcer 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 multimillionaire 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 0:53
Welcome to Episode 1607 1607, thank you for joining us today, we will have a recording that Adam and I did about maybe maybe two weeks ago. And I think you’ll enjoy it talked about a variety of topics. And that will be coming up in a moment. But first, I was looking at some real estate related comments online. And, you know, we have to be careful, obviously, what we put into our bodies, right? We’re conscious of the food we eat, because that determines our health. We are what we eat As the old saying goes, but we also have to be very careful what we allow to enter our minds. And I was I was reading the comments in this forum of all these people who are like, you know, waiting for the world to end. And you know, after hosting my holistic survival show for so many years, I realized that there’s a funny, I don’t know it’s a funny sickness humans have. It’s a fairly common and I don’t know what this malady is called, maybe we should call it. Let’s make up a name together, folks. Let’s call it e, o Ws. There you go. The E o Ws syndrome, and of the world syndrome. It’s funny how the human mind a lot of times really looks forward. They look forward to disaster, they want the world to end, maybe it’s so they get to be tested, maybe they feel they don’t get the opportunity be right. Or maybe they’ll get the opportunity to be a Giro. And I tell you, that’s an expensive syndrome. It’s an expensive syndrome to have. So here’s what I want to say, to those who are waiting for the real estate crash, it will eventually come. I don’t deny that. But if you are a buy and hold investor, who cares? Who cares? So you know my theory about and it’s not a theory, it’s gonna be a fact soon. But right now, it can only be a theory because it hasn’t happened yet. Right? It’s a theory, it’s a prediction. But my theory is, we will enter a time, maybe it’ll be four years from now, maybe it’ll be five or seven years from now. But it will come when the the 10s of millions of bull who have purchased homes, refinance their homes, and have these incredibly low, literally negative interest rate mortgages. Remember, I’ve told you for years, for 15 years, I’ve been talking about the idea that the house is normally considered the asset, and the debt against the house is normally considered the liability. That’s the way any productional balance sheet would look. They would say, here’s a house, it’s an asset. Well, how much debt do you have against the house, that’s the liability, subtract the amount of debt from the value of the asset, and then you have the net worth or the equity of that investment, right. But the mortgage at these prices at negative interest rates are a huge asset. They are the asset. So my prediction 357 years from now is that millions and millions and millions while ends of millions of people will be sitting on these three decade long incredibly low interest rate mortgages, where they have 2725 or 23 years left on those mortgages, and they will not let them go. Some of those properties will be eligible to turn into rental properties, and they might turn them into rental properties. And home remodeling will see an uptick in business because people don’t want to let go of those incredibly low cost mortgages. So instead of letting the mortgage go, they will stay in that property, they will remodel it, they will improve it, they will add on to it. And that’s the type of environment we’ll be in. But what does that mean for an increasing population? What does it mean for millennial Gen Y, and Gen Z homebuyers who want to buy? Well, it means there will be a constraint in supply. That’s a big deal. And it’s a good deal for you. Now, I’ve been doing this for a very long time. And I will tell you, that income property has been a fantastic investment. And nobody will argue with me about this one. It’s been a fantastic investment for the last decade. Now we’ll get into the part where maybe someone will argue with me. It’s also been awesome for 20 years, as well. Actually. It’s been awesome for 30 years. No, wait. It’s been awesome for 40 years. Now, actually, income property has been a phenomenal investment for 50 years, for half a century. Oh, but wait a second. Bill Nickerson, William Nickerson, one of the sort of original investment gurus who wrote a bunch of books about it. He wrote those books in the fifth started to write books, I believe it was in the 50s. So that would mean that income property has been a great investment for 60 years. No way. That would be 70 years, moving into 80 years. And before that, you know, I don’t know, that’s just way, way, way before my time. There were other people out there, our local market specialist at our pandemic investing event that we had recently, recently, Jim, he talked about it. And he talked about a book written in 19. I think it was 1933, about market cycles. And he did a presentation on that. And all of the people who attended, I’m sure enjoyed that. And, and he did talk about that a little bit on the podcast, quite a while back as well. But, folks, there are people that are just missing out, because they’re so convinced that they’re right about, you know, the crashes coming, and they’re going to buy up all these deals. And I think they’re just angry. They’re just angry that they have missed cycle after cycle after cycle. But you know what, I don’t even care about the cycles. I don’t depend on the cycles. I don’t even try to predict the cycles to any real extent. I just care about good properties that make sense today, you buy them that give you good cash flow, good tax benefits, that are solid properties that everybody needs. And I say, that’s what you should care about. That’s what you should care about too. And they need to be in the areas where the path of progress is going, where the migration is going. Another example of this, and we’ve reported on the moves out of places like New York and California so many times it’s just ad nauseum by now. But But wait, there’s more. Yes, there is because Hewlett Packard CNBC just reported that Hewlett Packard is the latest big tech company to leave Silicon Valley. Hewlett Packard Enterprise is relocating its headquarters. The company is currently constructing a new campus. The coronavirus pandemic has given a number of tech companies and prominent Silicon Valley figures an excuse to exit the Socialist Republic of California. And I didn’t tell you where Hewlett Packard is moving to, but this company has let me see revenue of 7.2 1 billion versus 6.8 8 billion expected according to a consensus estimate. And this just a little stock market stuff. So that’s not about the real estate side of it, but folks They are leaving California, without many needing to go into the article says without many people needing to go into an office every day. Many are questioning the high cost of living in the states hefty taxes amid a broader shift to remote work. But Hewlett Packard’s move is particularly notable because Hewlett Packard was one of the original Silicon Valley success stories founded in a garage in Palo Alto in Knight gien 39. Okay, in 2015, companies split into a EA and hardware maker HP Inc. So, folks, this is a big deal. By the way, also, you you know, I’m a big fan of Peter teal. He’s the founder of palantir Technologies. palantir is not a company you hear about in the consumer side, because they do big data. And you know, they have big customers like the government, and so forth. And, and, you know, we don’t hear about palantir too much, but they recently did an IPO. And I think their IPO already happened, right? Or at least it’s coming, I think it happened. Forgive me, I’m not a stock market expert. And I don’t care to be one. But they moved to Denver, Colorado, and they left Palo Alto earlier this year. Right. Amazing what’s going on now? Where is Hewlett Packard going you ask? They are going to they’re going to a place where we have helped hundreds of investors buy properties. They’re a place where I made good money on my properties. They are going to Houston, Texas. Yep. Houston. You know, we’re not really promoting a bunch of Houston stuff right now, for various reasons. But, you know, this is just a sign of the migration to these lower cost markets. I talked to you before about another theory of mine, I call the flattening of America, where as these companies and these very bright people disperse out into all of these different places after they’re leaving the expensive places. Of course, that pushes up real estate values, and it pushes up rents in the markets, we recommend the markets you can find at Jason slash properties, whether they be in Charlotte or Alabama, or, you know, Tennessee or Florida, I mean, this is where the action is, or little rock or, you know, many other markets that that we recommend, and where we we can help you find properties. This is what’s changing, America is flattening out. It used to have these big centers, you know, the financial centers, the tech centers, and now those are just dispersing to all sorts of places, all sorts of places, good, solid, linear markets that, by the way, are all becoming hybrid markets now. So hurry up, because the cash flow makes sense. But it’s not going to make sense forever. As these prices increase. Also, I just have a bit of weird trivia I want to share with you before we get to our segment today without them. And that bit of weird trivia is this. It has very little, if anything to do with real estate, but I just heard it and I thought it was so interesting. You know, if you’ve listened to my show for any length of time that I’m a space cadet. When I was a kid, I used to love following the space program. And just you know, the whole idea of space exploration is so fascinating to me. And by the way, we have properties that you can buy through our network that are impacted by the mega, the mega size, commercialization of space, the final frontier. Well, someone wrote the preamble for the theme for soccer, final frontier. These are the voyages of scholarship in its five year mission to explore strange new worlds, to seek out new life, and new civilization. And so here’s the bit of trivia that I just thought was so interesting that I just have to share for no particular reason. So I was learning a little bit more about Venus the other day, the planet Venus, our neighbor. And of course, Venus is this inhospitable, super hot planet. They’ve sent a couple of probes there. I think the Soviet sent them and the probes lasted like minutes before they just, you know, melted in the atmosphere. It’s so incredibly hot and gashes and has all these acidic gases and so forth. But here’s interesting. So in Florida, we have these fantastic lightning storms. I just absolutely love them, and insanely loud thunder. Right. I’m a huge fan of storms, I love storms. It’s like God putting on a show for us. Show us what you can do God, okay, here’s a storm. And it’s always amazing. It really is. But on Venus, there are lightning storms going on all the time. But here’s the amazing thing, the atmosphere is so dense that the lightning can’t touch the ground, it stays in the upper atmosphere, where the atmosphere is thinner. Because the the pressure is so high in the atmosphere, the lightning, get get through it to actually touch the ground. Right? You know, you hear of lightning hitting the ground or hitting a tree or hitting a house. We hear about that out here on Earth, because our atmosphere is not so thick. But on Venus, it is so thick, that lightning can’t touch the ground. That’s a fascinating bit of trivia. And you can wow your friends with that fascinating bit of trivia. I know it has nothing to do with anything, but I just kept forgetting to share it with you meant to share it with you before. All right, let’s move on. And let’s get to some important real estate investing content. with Adam. Many of you have checked out our asset protection, estate planning and tax reduction webinar already. But I was looking at the book this morning, the free book that you get our attorney who’s presenting in that webinar. And it’s all about real estate tax benefits really fascinating. So I’m going to share some of that content with you on a future episode. But if you want to attend that, and you haven’t done so already, and you’re putting it off, you know, your end is a great time to do this stuff. I’m doing some new things. I’ve set up some new entities and in doing some new things here toward the end of the year. So go to Jason, slash protect. And check that out, you will learn a lot. If nothing else, you will learn a lot. And people just rave about that webinar. So check it out. Jason Hartman comm slash protect and yours, Adam.

Good morning to people in North America and South America. And good afternoon to people in Europe. and good evening to people in the east. Thank you for joining us. It’s Jason and Adam, with a live stream and we are talking about the next great recession today. So are you ready? Are you ready for the next great recession? Are you ready for impending doom? record for debt and destruction? And the end of the currency and the end of us hegemony in the world? Hey, some of you might be welcome. Especially George Soros. But I Adam, What say you? Are you ready?

Adam 18:09
No, I think people always know that I’m a horrible pessimist never have any optimism in my life.

Jason Hartman 18:16
Seriously, you don’t seem very pessimistic to

Adam 18:18
me. Oh, no. I mean, I look at the light side of life. And so the main reason I threw this together? Well, not through I put this together was because I had a couple of clients who when I talked to them, they were very concerned about some issues that are going on in the world and saying, you know, I don’t want to invest into a big bubble, especially if things are going bad. And primarily one of them sent me

Jason Hartman 18:40
the article, buy gold or Bitcoin, because they be afraid they’re investing in a big bubble.

Adam 18:47
One of my clients sent me this article here from Yahoo Finance about JP Morgan relaxing some of the mortgage requirements with the housing prices on the rise. And he said, You know, this is one of the reasons I’m concerned is because we saw, as you know, during the Great Recession, the big part of the bubble came whenever they relaxed their mortgaging standards, and just said, you know, kind of you get a loan, you get a loan, everybody gets a loan, like we were all at Oprah’s getting properties. And so it was kind of like a, hey, this is starting, how bad’s gonna get, should I wait? Should I not? And so I thought, well, let’s dissect it, and see whether we should or not.

Jason Hartman 19:25
Alright, so before we get into biology class, and we start doing dissection, which I remember that well, it was really gross and in school having to dissect things. I was not a fan of that, but it is what it is. I guess that’s the one job I couldn’t do is Yeah, I don’t think I’d be very good doctor. Anyway, before we do that, make a comment below. Let us know where you’re located, where you’re watching from and who you think is going to win the US election. Is it going to be Joe Biden or Donald Trump? Clearly we still have an election underway. As much as Adam might not want to admit it. Adam, do you agree or disagree with that same?

Adam 20:05
I believe the results are in. And what do they say? I believe the results show we have a new president elect.

Jason Hartman 20:12

Adam 20:15
We really think the liberals are that smart. They know how to rig an election. Come on now. Oh,

Jason Hartman 20:20
well, you know, there are some pretty smart liberals. They’re smart except for politics. It took Al Gore, probably one of your heroes 37 days to concede.

Adam 20:30
I’m not saying he has to concede and come out and say that, but it’d be nice if we could at least. I mean, Joe Biden already has some clearances, just from being a former Vice President, may as well keep them up to date, and it’s not gonna hurt anything.

Jason Hartman 20:44
Oh, you’re you’re complaining about that? You know, not starting with the transition is what Yeah, yeah. Might as well let him start transitioning. In other words, even though he hasn’t been elected yet. Yeah. I

Adam 20:56
mean, even if it turns out that things get flipped, well, no harm, no foul, then

Jason Hartman 21:00
you’re still Biden, by shouldn’t should we give Biden the codes to the nukes? The nuclear football, as they call it, that well, he probably forget them anyway. I mean, politics, I’ll shut up. Now. I got to heckle you a little bit. All right. So let’s go into this. JPMorgan Chase, the crooked bankster organization, JP Morgan Chase, and jamie diamond, who, who has, I think committed a lot of bad, unethical deeds. But hey, aren’t they all this is the banks that are

Adam 21:37
in right. So JPMorgan Chase and company said that they’re going on the offensive and mortgages as home prices rise, according to the bank’s Chief Executive Officer for consumer lending. So this was the beginning of are we going to start having a bubble. So they came out and said, We have loosened some of our criteria. And because they’re walking back some of their constraints, because they realized, you know, prices are soaring. And if they don’t loosen the regulations, then fewer people are going to be able to buy and it’s going to create won’t be as fluid, and there’ll be fewer buyers out there. And so they feel that because of low rates, and the economy being generally solid, which as we know, it’s good for some bad for others, and the refinancing surge and how it’s up. homeownership rates are up 4% from last year, and 5%. Among those between 35 and 44. They feel comfortable loosening their lending guidelines. Okay,

Jason Hartman 22:34
so JP Morgan is loosening up, that’s gonna take me right.

Adam 22:38
Yeah, they’re loosening up. And so the question becomes, is this the start of another potential housing bubble that leads to a great recession?

Jason Hartman 22:47
Well, the question is, how loose are they going to be? I mean, are they going to be totally promiscuous? I, you know, I don’t think so. I mean, you know, loosening up. They’ve overcorrected. I mean, these banks have just been, it’s just too hard to get a mortgage, you know, most of the time and so if you don’t have perfect

Adam 23:07
credit can be pretty rough. Yeah, I’m getting there.

Jason Hartman 23:10
So so let’s, let’s ask our viewers what they think about this. Okay. So just make a comment below. If you’re watching on YouTube, Facebook or whatever, you know, big tech censorship platform? Comment below. Do you think the mortgage the banks are being too restrictive on giving mortgages and other loans? You know, for example, or do you think the banks are being too lenient and liberal? Like Which side do you think they’re on? You know, is in other words, is there a big default risk in the marketplace? viewers? We want to hear what you think so, so comment below and let us know what you think. And hello to Shannon Reese from Wilmington, North Carolina. Moving to North Carolina, what a great place Shannon, do you know well, Shannon knows, of course, but Adam, do you know into the others now, that Wilmington, North Carolina is where they filmed Dawson’s Creek, the TV show, I was wondering that that idyllic little town, you know, but it was Wilmington, North Carolina. That’s such I,

Adam 24:11
I did not know that. I my wife just recently started watching Dawson’s Creek and I watched half an episode and said, I’m good, thanks.

Jason Hartman 24:18
Yeah, you were done with that.

Adam 24:22
So but I will say, Sharon, Shannon, if you want to start investing in your backyard, we’ve got some North Carolina properties you can talk to us about.

Jason Hartman 24:30
Oh, that’s right, Adam, good reminder. Okay, we got to make an announcement, folks and announcement. You ready? So, listeners, we have a webinar tomorrow with some fantastic brand new new traction, Charlotte, North Carolina investment properties. These properties work, they’re good. So go to Jason slash Charlotte. Jason Hartman comm slash Charlotte and register for That webinar right now, as we speak at Jason slash Charlotte, join us tomorrow. That’s gonna be a really good webinar, you’re gonna like what you see folks, these, these are good, good properties. Alright. So

Adam 25:13
if we’re talking about the generally solid economy, and we talk about low rates, I figured

Jason Hartman 25:20
it is a relative term by the way, of course, it’s the whole economy is built on a house of cards, as is every economy on earth pretty much. So we’re speaking comparatively and relatively when we say that,

Adam 25:33
so let’s talk to our rich uncle. Originally. I went and I listened to Jerome Powell statement that he made back on you’ll see on November 5, so this is what I did with my afternoon as I listened to the exciting poetry that is drone pal, hey, listen,

Jason Hartman 25:52
a lot more exciting than Alan Greenspan. Alan Greenspan was like watching paint dry,

Adam 25:58
he. So Jerome Powell is actually interesting to listen to when he just does like a QA. This is a recorded like a written speech. And it’s kind of brutal, so y’all should be happy that I cut

Jason Hartman 26:10
this up for you. Okay, so he cut it up for us. Now, there’s always a risk, the sound won’t work. But I think you get this right, based on what we talked about before. So let’s give it a shot.

Adam 26:21
Many of our programs rely on emergency powers that require the support of the Treasury Department, and are available only in very unusual circumstances, such as those we find ourselves in today. These programs serve as a backstop to key credit markets, and have helped to restore the flow of credit from private lenders through normal channels, we have deployed these lending powers to an unprecedented extent, enabled in large part by financial backing and support from Congress and the Treasury. When the time comes, after the crisis has passed, we will put these emergency tools back in the toolbox. All right,

Jason Hartman 26:55
are you Well,

Adam 26:58
the reason I put in summary, we’re not doing anything for a while is he clearly says when the crisis has passed, right, we will put it back in the toolbox. So it’s, it’s not something that we’re they’re not just gonna kind of Peter off and be like, well, the vaccines here, goodbye, everybody have a great night. And then the next summer recession comes around, they’re going to or something like this comes around, they’re gonna go, Oh, no, what can we do? They’re clearly putting it back in the toolbox. And they are, this is something that they’re willing to do in the future during a crisis. So a rich uncle is not leaving us anywhere in the near future.

Jason Hartman 27:36
Yeah, so very, very interesting. I think, you know, he is so different than prior fed chairs, I mean, diametrically opposite sense that he does not talk in code, he just comes right out and says, you know, what we’re gonna do and just does it,

Adam 27:52
which I like, that’s very nice, ultimate bargains over here. So even with perfect credit, getting a refinance loan is time consuming nightmare of qualifying paperwork, we are refinancing primary residence to 2.5% interest, 30 year fixed, no balloon, the savings of the monthly payments work out to about 100% cash on cash return relative to the closing costs. Yeah, it’s refinancing is a great option right now. But it can take forever, I was looking at potentially doing a refi on some of our investment properties, and they were telling me, you know, straight up, it’s probably it might be 60 days to get this done. It’s no fun out there. In terms of timelines, it takes a long time you get better service in a fast food restaurant than you do from a mortgage lender. But,

Jason Hartman 28:36
look, folks, that’s the reason you have such a good rental market some extent, because it’s hard for your tenants also that you know, might want to be buyers, and the glory in life goes to whoever’s willing to put up with the most headaches and frustrations, and be really persistent. I mean, think of it just like athletics, right? You watch the Olympics, or whatever these athletes have suffered through pain and racking their bodies. And, you know, just in lots of endurance is required to be a winner in anything. And this is just one of those examples. If it were easy, everybody would do it, right? You got to take the extra step and do the harder thing than everybody else. And you’ve got to also do it with the faith that you’re not sure of the outcome in advance. And that’s the glory belongs to folks it whether you be an investor or an athlete or anybody else.

Adam 29:31
Now the question becomes he talks about putting it away, after the pandemics over and put it back in the toolbox. The question you have to ask yourselves is When are they going to put it away? Right, when is the Punchbowl get taken away? So Jerome Powell

Jason Hartman 29:46
talks about that, by the way, I just put the link to the Charlotte webinar in the comments and I think that only delivers to the Facebook pages. Possibly it may not deliver to YouTube, I can’t remember. But it’s Jason Charlotte.

Adam 30:00
Go ahead, Adam, with regard to interest rates we continue will be appropriate to maintain the current zero to one quarter percent target range for the federal funds rate until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment, and inflation has risen to 2%. And is on track to moderately exceed 2% for some time.

Adam 30:21
So there you go. Those are the three things that have to be met before rates are raised maximum employment, which usually they consider in the three to 4% range, which we are 100% away from me and their inflation reaching the 2% average over 12 months, which since right now we’re at probably like maybe 1% inflation for the past year, they’ve averaged, then we’ve got a while before that goes away. And then they’re not only saying now now they have to look in the future and expect inflation to reach that 2% and we are nowhere near that. So we’ve got time left at the Punchbowl before, before they think about taking it away.

Jason Hartman 31:01
Okay, so this party is just getting started is the point you’re making? Yeah. Let’s get I you know, I like that song by pink. Let’s get this party started. That’s a fun. I haven’t heard that song in years. But that’s a fun song. And yes, sir. I’m looking at the comments. I did mention Dawson’s Creek. Do you like that show?

Adam 31:19
Alright, so now we’ve got but the dead. Everybody wants to know about the debt. So here we go.

Adam 31:24
In addition, over coming months, we’ll continue to increase our holdings of Treasury securities and agency mortgage backed securities, at least at the current pace. These asset purchases are intended to sustain smooth market functioning, and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses. At this meeting, my colleagues and I discussed our asset purchases and the role they are playing in supporting the recovery. At the current pace, our holdings of securities are rising at a substantial rate of 100 and $20 billion per month $80 billion per month of treasuries and $40 billion per month of agency MBs. We believe these purchases, along with very large purchases made to preserve financial stability in the depths of the crisis, have materially ease financial conditions, and are providing substantial support to the economy. Looking ahead, we will continue to monitor developments and assess how our ongoing asset purchases can best support our maximum employment and price stability objectives, as well as market functioning and financial stability.

Adam 32:28
So here’s why I put the does buying treasuries really increase the debt? You know, Adam, before you jump into that, I

Jason Hartman 32:35
think we’ve got to give Jerome Powell the proper title, and make sure everybody understands the company. And it is a company it is a corporation that he runs not a government agency, as many think, okay, the company Jerome Powell runs known as the Federal Reserve is really the world’s biggest hedge fund. It’s the biggest hedge fund the world has ever known. It is the world’s biggest investor. I mean, Bobby Axelrod on billions, or Warren Buffett in real life are nothing compared to Jerome Powell and the Federal Reserve. It’s a huge investment fund is what it is. And he is an investment manager with massive amounts of au m, otherwise known as assets under management. Hmm. That’s what the Federal Reserve is. That’s what Jerome Powell is. And Adam, you’re kind of looking at me a little snarkily. Like, Oh, stop saying the feds a corporation.

Adam 33:40
I mean, it kind of is, but it’s the only Corporation where the all the directors have to be approved by Congress. And all of the, at the end of the year, all of the profits have to be given back to the government.

Jason Hartman 33:54
Yeah. Well, you could even make the argument that that’s true of other big corporations, to an extent not, but 100% of their profits have to go back to the government? Well, I was talking about both items. You mentioned the approval of the government, because, you know, the big companies, they hire all their lobbyists, and you know, people are in or out depending on the favor they’re getting from the government, right? So the government pays off the favors if they don’t like the CEO, or the board or whomever. And they dole out the favoritism, if they do like them, right. So that is, to an extent, also the dynamic, they’re admitted, to a lesser extent, much less government taxes them and makes them give back some of their profits. So it’s, it’s not as true but it is somewhat true.

Adam 34:41
So the reason I asked just buying Treasury really increased the debt so they’re buying treasuries to keep the value up for there’s still be people in their buying so it doesn’t just tank. But in reality, if the federal government owns treasuries, all that means is they owe money to themselves. It’s like having Money in Your left pocket in your right pocket saying we’re broke, or we need more money, and you have to pay me and you have to take it out of one pocket and put it in the other. So they’re not growing the debt by nearly as much as they’re making it sound in the situation. Because, you know, can you pay yourself back? If you owe yourself money? Yes, you can if you’re the creator of the money, so it’s not really adding to the debt in that regard. So the whole big word exploding our debt problem or belief that he’s talking about here isn’t really, as dangerous and bad as he makes it sound.

Jason Hartman 35:36
Right. But you know, of course, there are many people who would totally argue with that. Right?

Adam 35:41
Right. But it’s pretty hard to tell me that the government adding treasuries that it bought to itself is harmful in the long run, right, but

Jason Hartman 35:49
someone has to pay. I mean, money is not successfully, I’ll say successfully created out of thin air, you either pay through taxes, or you pay through inflation. Now, I believe and feel free to expand on this if you like, you know, because we really haven’t done a show about one of your favorite topics of late which is mmt, or modern monetary theory. But it seems though just a short little comment on it, is that it seems that mmt is a fantasy, because it seems like you can circumvent that whole idea that you you don’t have to pay it back through either taxes or inflation. Right. You’ll disagree, I’m sure. But why is that untrue?

Adam 36:31
While you don’t have to pay it back with taxes?

Jason Hartman 36:33
Well, yeah, I mean, look, anything created in the world has to be created out of something, right? It has to you know, there has to be some exchange of value, some sacrifice, you close one door to open another, you give up something to get something else, you create all this money to fund stimulus that creates debt, the debt creates inflation, or the debt creates a need for higher tax rate, or a blend of both, which is the path we’ve gone down for decades. Why both?

Adam 37:05
Why does the debt and make a bigger need for tax revenue?

Jason Hartman 37:08
Because it has to be repaid?

Adam 37:10
Who pays it?

Jason Hartman 37:11
What do you mean?

Adam 37:12
Who pays the debt?

Jason Hartman 37:14
Well, if it’s government debt, the government has to pay the debt. Okay. So when it souls it when it sells a T bill, right, yeah, so Bob Iger,

Adam 37:21
I agree the government pays it back. But we’re not You and I are not personally in debt. And like, if you look at the big us debt clock, the whole you know, hundred thousand dollars per person, or whatever it is, right.

Jason Hartman 37:33
And hopefully, you’ve all seen that amazing clock, go and search that on DuckDuckGo. Don’t do it on Google because they’re evil. But go to DuckDuckGo and search us debt clock. And if you haven’t seen that, that clock, folks, it’s truly amazing. It’s got all these numbers in it, you know, we should pull it up and you feel free to share it on your screen if you want to add them. And go ahead and do that if you’d like. I’m trying to see but the thing is, I don’t owe it. This will be continued on the next episode.

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