In this episode, Jason Hartman explains that US population growth has slowed to the lowest since the Great Depression. He examines how this will impact the country in the future. Then, Jason continues his presentation regarding the power of hedonic indexing, investing in the inflationary market, and growing your wealth during the unprecedented money printing.
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 1000s 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 1679. And thank you for joining us today. So I’ve got good news and bad news. Yes, just like I had last week, good news and bad news. I think I’ll start with the bad news. So here it is. Here it is. As you know, for many years, I have been saying that the one thing Well, there’s actually more than one thing, but one main thing that could derail my plan that could make this whole thing, just not work. The whole philosophy on which I have taught you how to invest for so many years, what is that one thing? What is that one big thing? Yes, there are the things I get it, but this is a biggie, that one big thing that could derail the plans that could make it not work that could really mess us up? Well, here it is, and this is the bad news. But I have a feeling the tree huggers will be very happy about this. And the people haters will be very happy about this. And the people who view people as a cost rather than as a resource. They will like this. But real estate investors. Not so much. Not so much. This could be real the plan. But after the bad news, I’ve got some good news for you. Okay, here it is. I’m looking at an article from today. This morning. I was reading demographers warning is coming to pass us population growth at second slowest year, ever, ever. The second slowest year of population growth ever. US population growth has slowed to the lowest rate since the Great Depression. The Census Bureau said on Monday, as Americans continued to march to the south and to the west. And one time engines of growth. New York and California lost political influence altogether. I really don’t know why they’re bringing this up. That’s sort of not that relevant. But we’ll see. All together, the US population rose to 331 million and change. I won’t redo the whole number. It’s too complicated. 331 million. Nuff said.
Last year, the Census Bureau said a 7.4% increase over the previous decade. That was the second slowest rate ever. Experts say that poultry pace reflects a combination of an aging population, slowing immigration and the scars of the Great Recession more than a decade ago. Notice they did not mention feminism, the biggest population killer of all time. But I digress. I tell you, they didn’t mention all these cultural changes. They didn’t mention the idea that the corporatocracy wants to keep people separated and single and if they’re married, they want to destroy their marriages. And feminism was such a great deal for the corporatocracy. Think about it, folks. Before that whole movement came along and there have been multiple waves of that movement right before that came along. Women were at home. And guess what the big corporations were thinking. They were thinking, gosh, if we could increase the workforce, and get more people to apply for jobs, that would make the labor market much more competitive. And if the labor markets more competitive, and there’s a limited number of jobs, we double the size of the applicant pool. Guess what happens? We big corporations can suppress wages. Yes. It’s not about minimum wage laws, which are absolutely stupid. It’s not about any of this stuff. It’s simply about increasing the size of the labor pool and limiting the number of available jobs through automation, downsizing, right sizing, reengineering the corporation, offshoring the jobs to china and india and the Philippines. Right. That’s how you cut wages, folks. Okay, you have a limited number of jobs, and you double the size of labor pool. Now next, they’ll probably be promoting the idea of child labor. Because, hey, if we can get all those children working, that would suppress wages even more. But we’ve got to make, particularly women half the population, we’ve got to make them think that being a stay at home mom is a worthless ideal that you are simply not enough.
If you’re a domestic engineer, aka housewife, right? That is not enough. That is not good enough. That is really shameful. That’s what the corporatocracy in the media. That is the corporatocracy or an extension of it, at least, will tell you, right, we want to double the size of the labor pool. And if we make everybody dissatisfied, if we keep pointing out all the reasons, people should split up, break up and never marry in the first place, then we can double the size of the consumption pool. I’ve explained that to you on many other prior episodes. Everybody needs two sofas, two beds, two toasters, two coffee makers, to have everything instead of one of everything. If you’re a consumer products company, you just doubled your marketplace. Let me see, yeah, double the size of the market. And you double the size of the labor force, what’s going to happen? more consumer debt, more spending, more people struggling? more tax revenue, more sales tax, and more income tax, because you got twice the number of people working, but overall suppressed wages. And just my personal opinion, in isolated, lonely population. Well, what can you do there? Hey, guess what? All those big pharma companies have a solution for you. They got a bunch of drugs to sell all the depressed people, right? A bunch of drugs you probably shouldn’t be taking have massive side effects that are largely hidden, folks. It’s just a big scam. It’s all a big scam. Everything’s a scam. This is not a conspiracy theory. It’s a conspiracy fact. Okay, let’s read on the Great Depression back in the 30s. And the great recession in the 2000s. Those things tend to make people wary of the economic future. And if people don’t have some degree of faith in the future, they’re unlikely to procreate. They’re unlikely to have kids.
The overall numbers confirm that was me by the way, talking back to the article. The overall numbers confirm what demographers have long warned that the country’s growth is stalling. Many had expected growth to come in even below the 1930s levels, given the long hangover of the Great Recession, and the drying up of immigration, which came to a virtual halt during last year’s pandemic. Note just note the way I said that right. William Frey, a demographer at the Brookings Institution in Washington DC warned that even a recovering economy may not change the trend with the population aging rapidly in immigration contentious unlike the Great Depression. It’s part of a process where we’re likely to keep having slow growth. Unquote. Frey said, Okay, that’s the bad news. Because, hey, as real estate investors, we’re kind of thinking like those big corporatocracy companies that want to increase their market share. We like more people to rent our properties. And then someday, we’d like more people to buy those properties, increasing the size of the buyer market. And of course, we know supply is massively constricted. Thanks to the morons that run the various levels of government and supply will probably be continued to be pretty restricted. Because sleepy Joe isn’t talking about any solution for supply. All That moron is talking about. And don’t you love it that you live in a country where you can say that, I don’t know, I might get a knock at the door. Maybe you can’t say that. You certainly can’t say it with a big corporatocracy that will censor you, right. But anyway, for now, sleepy Joe has no solution, he only wants to throw gasoline on the fire and make the problem worse, with his absolutely idiotic ideas of this $15,000 tax credit, and the 20 to $25,000 grants that are in the works. And we’ve talked about those. And by the way, if you’re not listening to the YouTube channel, and not catching the live streams, please add that to your list, not just the podcast here.
Because really important stuff that sometimes there’s some overlap, but a lot of that content is very different. And also, we’re not just on YouTube, we’re on all the other censorship free platforms like bit shoot, and Rumble, and Odyssey, etc, etc. So you can find us all over the place. So he wants to simply increase demand, and there’s no shortage of demand for housing, there is only a shortage of supply. How they cannot figure that out with all the brainiacs in Washington is beyond me. It’s just totally beyond me. I don’t get it. It doesn’t make any sense. It just doesn’t make any sense. So I told you the bad news. Now, the good news, are you ready? Harry dent talks a lot about this. But it’s something that all dem demographers talk about the time lag, he talks about S curve. And the way that looks on a chart, right? There’s a time lag on this demographic time bomb. So the good news is, here’s the good news. You don’t have to worry about this. Now, do not worry about this now, worry about this in 2030 or 40 years, because that’s when we will see this decline really hit the housing market. It’s a long ways away, folks. So for today, massive shortage, no demographic problem, lots of demand short supply, you’re good. But you’ll start to see an inkling of this in about 20 years, you’ll start to see more of it hit in 30 years, and even more in 40 years. Now, the one wildcard in that where it may never become a substantial problem is if the life extension really kicks in to where we see people living a lot longer. And we are on the verge of some pretty big breakthroughs on that. Of course, Bill Gates would love to prevent all that because he hates people. He doesn’t want to see a lot of people. If people are bad people are the problem. That’s the mantra.
And by the way, read that great book that I recommended before. It’s called the bet, the bet. And it’s about the two opposing views of population and the environment. Very, very interesting book. It’s entitled the bet, check it out, you’ll like it. All right, let’s go to the continuation of our live segment from Monday’s episode. And if you need us reach out one 800 Hartman in the USA or worldwide, Jason hartman.com. And here is part two of the live presentation. Now I got to tee this video up. This video is about 1415 years old, and it is Peter Schiff, how many you know Peter Schiff. Okay, Peter Schiff. I had him on my show many years ago. He’s a super interesting, highly intelligent person. I call him the master of the zinger soundbite he just zenthon you know, the sound bites are great with Peter Schiff. But I wouldn’t recommend investing with him because he’s like, just so wrong so often. But he’s not wrong about this. Okay. There are subtleties to things you got to think about, right? He’s not wrong in this video. And he’s having this debate with a guy named Harvey Hirshhorn from Bank of America and economists for Bank of America and shift just swatters him, okay, like he usually does. He’s a very good debater. But I want you to notice how the mainstream media on CNBC or anywhere marginalizes Peter Schiff, even though he’s right about this issue. He’s right about it. Okay. And I want you to also notice in this video, one of the manipulation methods that I talked about earlier, remember, I said The way they hide and suppress the real inflation numbers are waiting, substitution and hedonic indexing. You’re going to hear an example in this video that Harvey Hirshhorn makes about hedonic indexing when he talks about the power of a processor, so let’s listen to him. This is this is a really good video.
‘Audio Clip’ 15:22
So the economy slows, but stocks Hold up. What’s going on here? We’re speaking with Harvey Hirshhorn portfolio strategy is Bank of America and my personal favorite Peter Schiff, president of Euro Pacific capital, and author of crash proof how to margin economic collapse margin while you’re feeling a little blue Peters here to push you over the edge. All right, gentlemen. Peter, I’ll start with you. Yeah, I’m kidding. But I’ll start with you, Peter. What what’s the latest doom and gloom?
‘Audio Clip’ 15:54
Well, you know, everybody is celebrating the record high in the Dow 13,000. Yeah, you know, the problem is, the price of everything else is rising a lot faster. You know, these records are the result of inflation, not legitimate growth. If you take a look at the Dow priced in euros, for example, it’s down 30%. Since 2000, if you price it in wheat or corn is down 40%. Price and gold is down 50%. Price in oil is down 70%. Price in copper is down 80%, better price and uranium is down 90%. I better?
‘Audio Clip’ 16:23
Yeah, here’s the thing. It’s priced in dollars, and always has been and always will be
‘Audio Clip’ 16:27
no, but who cares if the if you have more dollars, if the dollar buys less, I mean, think about what the Dow was worth in 2000. And think about the big increases in the cost of health care and the cost of education and the cost of insurance. And compare that with a puny increase in the value of the Dow,
‘Audio Clip’ 16:43
that’s always been true.
‘Audio Clip’ 16:44
Well guess what stocks have been a bad investment, just you know, adjusted for inflation, you go back in time, back in 1929, the Dow was worth 19 ounces of gold, it’s still only worth 19 ounces of gold, the returns have been dividends, that’s it, the appreciation is an illusion created by inflation.
‘Audio Clip’ 17:01
Harvey, I’ll be out here.
‘Audio Clip’ 17:06
While the markets, when you measure from any kind of a historical peak, you’re always going to get some aberrations in the comparative analysis. So I take all that basically. So you know, the stock market in terms of the power of processors is up quite a bit, given the increase in commodity processors. So play that game every way you can
‘Audio Clip’ 17:29
let me ask you something RB and Peter didn’t met, while he kind of it kind of came at it from a tension. But he didn’t directly mentioned this. You know, we’ve been watching these earnings reports come in. And it’s clear that some of the strength is due to the weak the some of the companies are benefiting from the translation of the currencies. Now, in the old days, that would have been backed out, but I don’t hear anybody doing that anymore. Are we getting sloppy about this are what?
‘Audio Clip’ 18:02
You know, some of it, some of it is coming through and in the past is, especially in the pharmaceutical area was it was a question mark. But we are seeing greater globalization of US companies, it’s a 50% or more the profitability and revenues of a lot of the companies but shouldn’t like foreign stocks for their, for the weakness in the dollar there, you can still get the same benefit.
‘Audio Clip’ 18:26
There’s something we agree on the place to be as abroad the place to invest as far as stocks, but you know, because US companies are having their earnings, you know, buoyed by a weak dollar, I mean, there’s nothing good about that all they’re doing is earning more dollars that translated to fewer euros or fewer, you know, Swiss francs or Australian dollars, we’re just putting our goods on sale. So we’re selling more of them, but we’re getting less in return. But you know, the dollar is in danger of major collapse. Here we are. Whereas we’re blind as long as we’re a major long term, 30 years support. And I think if we crack through these next several weeks now what we saw a couple of months ago in February with a 500 point drop in the doubt, that’s just the warm up, the main event could be coming we could have a much, much bigger down day if the dollar breaks down. And I think he can certainly take the bond market with it and walk through that
‘Audio Clip’ 19:12
I would say now the dollar is is weak on one level, but on the other level, it’s really not weak. It’s actually the strength in the foreign currencies. The foreign economies are doing better talk about the last handful
‘Audio Clip’ 19:25
gentlemen, I’m sorry we are out of time and Time waits for no man, Harvey Hirshhorn thank you very much for having me mark. Chef president Europe Pacific capital and Liz say something to cheer me on Peter always just bums me out. Mark I was being spoken to just as he said what you just said and I was saying that after Peters somewhat gloomy outlook we could use the red Sunshine here. Well, yeah, you know, what do I got to tell you we get a lot of email from people say I want to hear more from that guy. No or you know he’s got a following the interestingly enough over the course Some time, the predictors of disaster have always sold more books than the people who hope that are good news. Even though the disaster predictors have been wrong,
Jason Hartman 20:10
somebody is making money out there. Anyway, isn’t that interesting how they just totally marginalize him? And yeah, and are 2007, I think, yeah, you know, of course, Peter was wrong about his prediction that he’s been wrong about forever about the dollar collapsing and all this stuff. And the problem with a lot of these doom and gloom ORS is they just do the math. And the math isn’t enough. They got to also consider that the US has the biggest military the world has ever known. And the ability to maintain the reserve currency status with that military, you know, love it or hate it. At the end of the day, everything comes down to force, that’s vile. I know, it’s barbaric, but it’s the way in the world. It’s just history. And, sadly, future. You know, the US also, one thing that’s not considered very much in terms of the US asset is the US has the biggest brand in the world, the earlier speaker that talked about how Apple’s the biggest brand, no, America is the biggest brand. America is the brand that almost not everybody, but almost everybody in the world wants to live under. It’s a great brand, there’s no question about it. And it has the reserve currency of the world, and the military to keep that reserve currency status for a long, long time. That’s why they can kind of defy gravity with all of this spending, they can kick the can down the road forever. And that’s why Peter Schiff is just like always wrong about the end of the world, or the end of the dollar at least. And there are many others like him, he’s not the only one. Okay, so this is a chart about something that really happened to millions of people. This is not an abstract theory, it’s not some esoteric thing. We’re out there in the ether. This is reality. And what this chart shows us is someone buying the median price home in 1972. And living in it. Now, if this were a rental property, it would be dramatically better, don’t worry about all the numbers, I’m not going to bore you with them. We’re just going to fast forward through them, it’ll be totally relatable. Up at the top in the green, the median house price in 1972 was $18,000. And change the mortgage amount if you got an 80% loan was about 14,600. The interest rate back in 1972 on a 30 year fixed rate mortgage was 7.37%. are you grateful rates are so low now? You know who did that? Your rich uncle Jerome Powell, Chairman of the Federal Reserve, take advantage of it. Okay. I don’t agree with what he’s doing necessarily. I’m just saying take advantage of it. That’s it. So in 1972, how much was $1? worth? $1? Exactly right. Thank you. Yes, $1 was worth $1 in 1972. But let’s fast forward 12 years. 12 years, a friend of mine was born in 1984. And George Orwell wrote a book about 1984. So in 1984, when you go down here, the 19 $72 here was worth $1. Here, it’s worth 40 cents. So the dollar depreciated in value, because of inflation, it became less valuable. So this person that bought this house, these millions of people that bought this house, this example house, they were paying $101 per month, that was their mortgage payment. But 12 years later, the real mortgage payment, even though the check was still $101, the value of that check was only $41. This is inflation into step destruction happening right here. Now, let’s fast forward to the end. We won’t go through all the numbers. By 2001. They lived in that house for three decades. Three decades, they live there. And they did not rent it out. If they rented it out, it would have been dramatically better than this. But this is good enough because it’s impressive. Remember, they got a mortgage for 14,600. They paid interest in terms of nominal dollars, the name of the dollars in name only, not the real dollars, not the real value just in name only have 36,003 18. But the real dollars after inflation, the base value of them was only 16,003 93. Well, they only they borrowed 14,000. So they’re about $2,000 more than they paid now. But remember that interest is tax deductible. So by the time they had inflation pay part of their debt, and they had a tax benefit. Their inflation adjusted and tax adjusted dollars means that they borrowed 14,006 14 but they only repaid 12,006 55. That’s magic. That’s magic. So they thought they borrowed at 7.37% but After inflation, their rate was 1.06%. And after inflation and tax benefits, their rate was negative 1.16%. They got paid to borrow that money. They lived in that house for three decades for free. No, it wasn’t free. They got paid to live there for three decades. That is a miracle. Isn’t that awesome? Now imagine, yeah, clap. Okay, it’s good.
‘Audio Clip’ 25:31
I am better than
Jason Hartman 25:34
that was john Maynard Keynes, probably who did that, actually. But this is incredible. Now imagine, if they didn’t make any of those mortgage payments, if they put a renter in there, and a renter made those mortgage payments. If we did the math on that you wouldn’t even believe it. It’s so good. It’s just incredible. This is why income property is the most historically proven asset class in the entire world. And now, when we have negative interest rates, after inflation and taxes, people are getting paid to borrow today, if you bought a bunch of houses, put 30 year fixed rate mortgages on them, and kept them vacant, you would probably make a lot of money, but you’re going to rent them out. And you’re gonna make a lot more with that. That is inflation induced destruction, you get paid to borrow the money. In the interest of time, let me wrap this up, I just want to share with you a quick, very inspiring poem that has inspired me for many years. And this is an amazing, amazing thing. So this is something that we can get you a copy of. And here’s what I want you to understand. First of all, you should put it on your bathroom mirror and read it every day. Because it is just incredible. It was written in 1977 1977 is the perspective of the author who wrote this great poem called The Reluctant investors lament. His name is Donald Weil, he has passed on, but a client of ours gave me a book with a whole bunch of his poems and sayings and they’re just great. But this is I think, the best one, again, written in 1977. He was a real estate broker in New York and an investor. And here’s what he he was thinking and what he wrote. He said, I hesitate to make a list of all the countless deals I’ve missed, Bonanzas that were in my grip. I watched them through my fingers slip. The windfalls, which I should have bought were lost because I over thought I thought of this. I thought of that. I could have sworn I smelled a rat. And while I thought things over twice another grab the math the price, it seems I always hesitate, and then make up my mind when it’s much too late. A very cautious man in mind and that is why I never buy when Tucson was cheap desert land. I could have had a heap of sand when Phoenix was the place to buy I thought the climate was much too dry. Invest in Dallas that’s the spot but my six cents warned me I should not the golden chances I had been are lost and will not come again. today. I cannot be enticed for a 1977 everything is so awful price. One One second. He’s not done yet. But that’s pretty good. Right there. I added the 1977 minutes. Little little little poetic license here I added that to his poem. The deals are of yesteryear are dead the markets soft and so is my head and at times teardrop drowns my eye for the deals I had but did not buy and now live satis words I pen. If only If only I’d invested back then. Don’t be the proactive investor. Thank you very much.
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