Jason Hartman starts the show by discussing supply and demand shock. He explains current economic trends that have led to this shock. Later he hosts Dan Amerman to discuss crisis investing. Dan authored the book Cycles of Crisis and the Containment of Crisis and gives us his views on the on-going pandemic. He gives some tips for taking action and emphasizes a need to understand inflation.
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Jason Hartman 0:59
We’ve got Dan Ammerman coming back on the show today. I wanted to reach out to him and get him back, given all of the absolute craziness that’s going on in the world. As you know, he’s been on several times, and many of you have taken his turning inflation into wealth course that I took about 12 years ago or so. But hey, I wanted to play a quick little clip from our private podcast. That’s part of the jhfcu membership. Because this totally applies to a search I did yesterday, proving the actual non theoretical practice of supply, demand shock, something we’ve been talking about this is very significant. So this clip will tee up the supply demand shock issue that I want to talk to you about before we get to today’s guest. And that’s when they coined the term the misery index, Jimmy Carter probably hated that. I’m sure, but do you have any thoughts about that I see economic
Dan Amerman 2:02
growth and a lot of different ways. So right now supply is low, we have low inventories, it’s all been sucked dry out of the system. And so that’s what I think the inflation is going to come in is rebuilding those stockpiles, and the demand demands gonna come online faster than supply. That’s where the inflation comes in. stagflation, you know, it’s interesting, you talk about that, because for a couple years now, I had been on the sidelines, cheerleading an infrastructure bill, you know, to me,
Jason Hartman 2:29
coming in with something that is, you know, Allah, post World War Two in the 50s. Under Eisenhower, we really come in and you’re really pumping money into things that matter to me that launched a couple generations of economic life in the US. And so I’ve been sitting here on the sidelines saying, Yeah, we’ve got a president who knows development, right. Why don’t we have there was even some preliminary chat approximately two years ago where Pelosi came in and, and they talked infrastructure bill, and as usual, you know, yeah, it sounds good in theory, but when you’ve got two different sides of the equation, trying to figure it out. It doesn’t come together. Well, now we’ve got a crisis. And in the words of Rahm Emanuel, don’t let a crisis go to waste. So yesterday, I had to go find some supply demand shock of my own. And why is this so significant? Well, as I’ve been telling you since the beginning of this crisis, this is a rare economic malady. And it’s one that we really saw very significantly in the 70s. It’s one of the reasons we started talking about the misery index, the Jimmy Carter misery index. And the misery index, of course, has high inflation and high unemployment at the same time, it’s miserable. It’s terrible. It’s like when you’re out and about, and you’ve got nice warm weather, but it’s really humid and sticky, and it makes it miserable, right? If he had just had one without the other, it’d be okay. You can live with inflation as long as the economy He is booming. And you can live with high unemployment, as long as everything’s cheap and prices are low. But when you get both together, you have the misery index. It’s miserable. It’s miserable. So check this out supply demand shock. Remember, this all happens like everything in the economy. There’s a lag time, right? There’s a lag time. So what happened? Well, at the beginning of the crisis, travel demand, absolutely collapsed. airline demand just collapsed. Nobody would fly. Everybody was either scared to fly or events were being canceled. So there was no reason to fly meetings, were being canceled, conferences were being canceled, etc, etc. We even canceled our meet the Masters conference, and then we cancelled our venture lions mastermind retreat. We had both of those events scheduled. We canceled them both. So happening to everybody. Right well First, after the crisis began, airline tickets were super cheap. Why? Because there was lots of supply and demand had totally collapsed. Well, what happens after the suppliers adjust the supply side economics if you will to use a well worn phrase from the Reagan era supply side economics. When you collapse the demand, eventually it takes a little time the suppliers react. So what are the airlines do? They started grounding planes they canceled routes. They parked their planes in storage. Okay, there are pictures online you can see of jet after jet after jet 737 740 sevens Airbus planes, you can see them sitting in giant basically aircraft parking lots, right? And and they’re just sitting They’re they’re idle, they’re doing nothing. These planes are just just shut down. Same with rental cars. By the way, Sarah, our investment counselor, I think it was her posted a picture on her Facebook page just a week ago or so, of Dodger Stadium. In Los Angeles, full of cars, the parking lot is full. Well, it’s not because anybody’s going to a baseball game. There are no baseball games. It’s because the rental car companies parked their cars at Dodger Stadium. They’ve been using that as a big parking lot. And I’m sure many other parking lots are all around the world because the cars aren’t on the road. So the suppliers start reducing supply. Now this is what’s going to be the big supply demand shock in the oil market. And I interviewed James altucher yesterday. We’ll play that episode next week, James, all teacher and we talked about oil supply demand shock. So that’s coming up, but hugely significant, right. The demand collapses, then the supply collapses, oil companies go out of business because oil is so cheap, right? There’s no demand. So first oil gets cheap. Then oil companies figure, well, we can’t stay in business at these prices. So they stopped producing. And then you get into a recovery mode, and there’s no supply. So you have supply shock. First you have demand shock, then you have supply shock. Well, here’s a real world example with airlines. Okay, I went to Google flights, and I searched a flight. That’s sort of a simple route of flight from Miami to LA x, Miami to Los Angeles. Now, the interesting thing is on Google flights, you can look at the price history for the last 60 days, and the chart does not lie. This ticket is very expensive now. And I just remember although I didn’t take a screenshot unfortunately, I should have anecdotally I searched this route a few weeks ago. It was very cheap. And the chart shows me that. So 60 days ago, this flight would cost you about 260 bucks. That’s pretty reasonable. But guess what, 30 days ago, you could buy this flight for around $50 50 bucks. It costs nothing to fly, round trip, Miami, LX and coming back. But now, that same flight is $437 for 37. So this is so inflationary because the normal if you will, although there’s no such thing as normal in the airline business, the normal cost of that flight, about 260 bucks 275 bucks, okay, goes down super cheap when the demand collapses to $50. Now, the supply has also collapsed in a For $137 great example of supply demand shock. I know it’s not totally perfect. This is not some scientific survey. It’s just me going to Google flights, you do not need to send me a bunch of emails, poking holes in the theory, the concept holds true. Okay, so don’t bother me about it. Cuz I know there’s like, there’s like 10 people listening, that are anxious to poke holes in my theory, okay. Anyway, that’s the concept of supply, demand shock, it is a critical thing to understand, because we’re gonna see it. And I think we come out of this into a smaller economy for a long time. We come out of this into stagflation. And we come out of this into a mass migration to cheap suburban areas where people can rent a home and not have an elevator, and they can socially distance and all of that stuff. So we’re here to help you with that Jason hartman.com slash properties. For our properties that are available now, or contact an investment counselor, and you can always call us one 800 Hartman. Without further ado, let’s get to our guests Dan Ammerman. And guess what, next week, you know what I can’t wait to tell you. I can’t wait to tell you to ask for a discount the next time you order food from one of these restaurants or buy a product from one of these retailers because I’m going to tell you who’s not paying their rent. That’ll come up next week. Okay, here is returning guest Dan Ammerman.
Jason Hartman 10:33
It’s my pleasure to welcome back Daniel Ammerman. He is a returning guest who I’ve been following for many, many years. He’s been on the show many, many times as you regular listeners know. And I originally found his material, turning inflation into wealth, and he has evolved a lot over the years with different materials. lately. He’s working on crisis investing. Let’s welcome him back. Dan, how are you? Good, Jason. Thanks for having me back. Pleasure is ours and you are coming to us from your hometown, Minneapolis and you’ve basically got a ranch out there don’t ya are the equivalent where you’ve got a easy place to socially distance, right? Yeah, I’m a little bit north of Minneapolis. So yeah, I’ve got a few thousand acres of wilderness kind of out the back door here. It’s social distancing is not difficult. It’s, it’s nice and easy. And as my listeners know, and I just mentioned to you before we started, I think there will be a literally a tsunami of migration to lower density living environments. And that’s not your area, but your area definitely is monetary and fiscal policy and tying it in with taxation as well. Dan, give us the macro picture. There’s more than enough to talk about take it where you want it. What’s going on?
Dan Amerman 11:45
Well, I feel in some ways this comes back around to when you and I first met you attended one of my workshops, and I think was maybe june of 2008. And we were on the verge of the financial crisis in Newport Beach, California, by the way do for Beach, California. And among the topics besides real estate asset liability management was the dangers of a derivatives based financial meltdown. How the federal government would probably try to contain that was spending. And if the amounts got too great with it couldn’t do that the Federal Reserve would probably create the money to deal with it. And sure enough, four months later, where were we? Yeah, first quantitative easing, right. QE one, Indeed, indeed. And that was the creation of a little over $400 billion in the course of a week, which was absolutely unprecedented. And that changed in that very moment that happened, that really did change the nature of money. And it also changed the nature of investments. And this is something I have been developing and working on ways of explaining to people and explaining to people for many years now what I’m currently Calling it is cycles of crisis and the containment of crisis. That is in the aftermath of the financial crisis of 2008. The world was never the same. A lot of the investment universe interest rates, the housing market, they were all based upon this massive amount of monetary creation, the Federal Reserve had done for the first time that was being used to artificially lower interest rates, which of course over time did really strong things for real estate. If you look back to the first what I call the first crisis, when things really changed, which the collapse of the tech stock bubble in 2001, right. So the.com bubble, then you have the first containment of crisis, when the Federal Reserve slammed interest rates down to 50 year lows, and that greatly facilitated the growth of that real estate bubble. So if you look at real estate and what real estate prices have done over the last 20 years, I would argue that it is the two cycles of containment of crisis that have dominated the markets because each time extremely low mortgage rates have been created each of those times that’s made housing far more affordable, whether we’re talking about living in a house, or whether we’re talking about purchasing an investment property. And that has fundamentally changed the trajectory of things. It’s also fundamentally changed bond prices, and it has fundamentally changed stock prices. Okay. So 20 years on average, we’ve had the lowest p e ratios we’ve ever seen.
Jason Hartman 14:30
One of the things you said that I just want to ask you to elaborate on. You said it made housing and investment properties more affordable right? reps right now. That’s one of the things that just have many things in the mainstream media. Bam, that just drive me crazy. You see these charts that tell only one component of the story, I’m sure they drive you crazy to where a chart of real estate prices. For example, number one, it’s not divided up by market type or anything. geographical thing, which also is important, but but just assume that real estate prices were one monolithic idea, right? Which they’re not, but assume they are, just give them that for a second. They just go by the price. They don’t go by the price of the the monthly payment, almost nobody considers the price of the property or the house just based on the price. They, they look at it on the payment, that’s how they buy and mortgage payments are actually not high at all. You know, even though prices are higher, and they all say oh well, the markets in for a crash because the prices are back to their pre bubble peak, you know, depending on how they slice and dice or whatever. You’ll hear stuff like that. And it’s just a non sequitur. You know, it’s just not enough information.
Dan Amerman 15:49
I’m pulling up the information right now you may recall Jason that I’m besides enjoying talking. I’m also a numbers guy, only a lot of visual illustrations. Yes. And you know, I have many hundreds of graphs, all the times that explain the different things that I feel are important and they’re being missed. And if you take a look at average mortgage payments on an inflation adjusted basis for equivalent homes, we are still close to historic lows other than just a few years ago. But if you look at any time in history, basically, yeah, before 2000 almost off the bottom of the scale.
Jason Hartman 16:35
In other words, average house payment is except for one point A few years ago,
Dan Amerman 16:42
right average house got much lower right after the financial crisis of 2008. got much lower than it is right now. Right. And that has some lessons for us in terms of Federal Reserve policies to try to contain this larger crisis this time around.
Jason Hartman 16:58
Okay, so when was the that local point that you mentioned was like 2012 13.
Dan Amerman 17:02
The very bottom was 2012.
Jason Hartman 17:04
That’s when houses were the cheapest of all. And I believe I said on my podcast that the housing affordability index was the lowest since they’ve been publishing the index, which I believe was 1972.
Dan Amerman 17:16
We absolutely I’ve got the same data here. Yeah, it’s it’s just unmistakable. But right now, if I’d looked at a particular model I was using has an average inflation adjusted payment, mortgage payment between 1975 and 2000 $2,019. of 1400. And $46. Yeah, we’re down probably 1100 right now, something like that. Mm hmm. It’s well below
Jason Hartman 17:42
that average. And the other thing, Dan, and this is harder to quantify, but that house has probably gotten better to hasn’t because more modern houses better than older house almost every time so we look at these stats of the size of the house has increased now great But the density has also increased. And that’s what I think is faulty about saying, you know, the post World War Two baby boomer house was 1000 square feet or whatever. And now it’s 2200. Right? So Oh, yeah,
Dan Amerman 18:11
I use, I use the Freddie Mac housing price index, which is pairs based. Mm hmm. And what that does is that compensates for that. Okay, good. So this takes a look at the equivalent of in this case, a 2017. Home. Mm hmm. Which would have been a mansion, right in 1975. Standards Sure. Got to average, it also takes into account you know, changing amenities changing square footage. And the other factor that really changes over time is that a greater percentage of the population now lives in higher cost areas, right? It used to and that skews that as well. So you have to take that into account but these numbers do take that
Jason Hartman 18:48
into how do you account for that? That’s really interesting. How do you account for, you know, the the neighborhood, that’s a really tough one to account for the square footage is easier. Now the thing they always like We found that that was the land. I take Lakewood, California is the sort of, you know, outside of long beach where I used to live is this like perfect? post World War Two suburban baby boom area. And granted the house was small but you did have a big yard. Now you’ve got no yard or a tiny yard and but you’ve got a bigger square footage house itself. So you know, you can do that. How do you quantify for neighborhood that’s a toughy? Well,
Dan Amerman 19:25
I’ve got a pretty good idea of how they do it. Freddie Mac does not fully disclose what goes on there. But the basis of pairs based comparisons are that you’re looking at the prices for the same home, when ideally it sells at different points in time. Sometimes they use refinancings as well. Mm hmm. Get an independent appraisal of it according to their standards. What appears that they’re doing in terms of adjusting for the movements from say small towns in Iowa and Nebraska to Florida, Arizona, California. as the case may be, is as far as I can tell what they’re doing is they are periodically re weighting based on population shifts. So they change the index if there’s a NetFlow population and asked there has been less say from less expensive rustbelt and Midwestern locations to sunbelt locations. quite a difference. Okay, good. I didn’t mean to go too far off on that tangent. That was that was definitely one. What else did you want to sorry, though? Yeah.
Jason Hartman 20:31
I know. It’s super good to meet you. What else do you want listeners to know maybe a whole nother aspect of what’s going on? What the Fed is doing is absolutely mind boggling. But
Dan Amerman 20:42
and it’s not just mind boggling. It is a one way street. That’s the issue. And we’ve known that this process was going on the second containment of crisis, where the Fed was using QE was much stronger than the first round of containment of crisis. It was much more pervasive. But the Federal Reserve was never able to exit. They never could unwind their balance sheet, they had to keep the trillions there. They never could totally escape from the very low interest rates. If you recall, they tried in 2017. They couldn’t do it. They nearly crashed the market, December of 2018. And then they totally backed off. So the deeper that go down this path, it’s like going into a lobster trap. So you can go in, but you can’t come out.
Jason Hartman 21:27
Yeah, I know. Like, what’s the endgame? Is there a reset a debt Jubilee? I mean, it’s not just the end game for the Fed. It’s the end game for almost every government on Earth. It’s the end game for the consumers, the people, the companies, I mean, we just live in a world of debt and derivatives. I mean, it will just be that way forever, or does it have to reset at some point,
Dan Amerman 21:52
there are different directions that can go one of them if we start with the assumption and it’s not the only assumption of ongoing free markets and freedom, individual liberties than a blows apart ism. The alternative is that we go to ever more political control and ever more of a command economy. And you can create the simulation of ongoing stability. Even though on a reality basis, you probably have lower and lower standards of living and higher and higher rates of inflation based on what we see.
Jason Hartman 22:21
And you just move into this kind of Japan style lost economy this like a meme economy, when debt levels and such get just too far out of hand to where you just can’t kind of really grow your way out of it just sort of plods along forever.
Dan Amerman 22:38
Yeah, that’s a possibility. But the issue with that is, and I think we’re going to be coming on on this as well and this pandemic, and not just the pandemic, but the responses to and help bring this forward as well. It’s not just the economic side, it’s the political side, and Japan if occation is a very real scenario for a period of time But if there is substantial political change that is less likely to persist if the US goes full on socialist, for instance, and you know, there is no need for Japan if occation it just seems like no matter what anybody says we’re moving toward an era of just much, much, much, much, much greater government involvement in the economy. I think this is going to be a good push toward universal basic income toward a nationalized Housing Assistance Program. This is a monumental shift we’re going through right now. This is not a push towards Jason, this is what’s happening right now, as we look at this rollout of this $2.3 trillion. Sounds like it is in new fed financing programs all across the board. We are seeing a fundamental redefinition of our economy happening right now in real time. That is, in my opinion, strongly biased against entrepreneurs and small businesses and strongly skewed Towards large corporate and governmental organizations, okay. That’s where that money is going to
Jason Hartman 24:05
be, it seems like the entrepreneurs wouldn’t and small businesses well, depends on the type of small business. But it doesn’t seem like they would be as hard hit, I was just thinking you were going to say, more concentration of wealth, more inequality, definitely more wealth at the top, less at the bottom. But I sort of didn’t necessarily think that the entrepreneurs would be as affected by that, you know, they have the ability to change their circumstances to an extent, right, but the typical worker be, especially in the lower socio economic strata, they’re just going to get poor, it’s sad. It’s already terrible as it is. I mean, you know, we just in 2017, we saw the first real dollar wage increases in four decades, right. And that’s real dollars based on official inflation stats which are different from reality as we both know But what do you think about that?
Dan Amerman 25:01
Well, I guess I’m defining entrepreneur somewhat different way than you are. Yeah. I’m not looking at someone, a capitalist is out there investing money in the way that you mean. I’m looking at who owns virtually every local restaurant around the Stata chain.
Jason Hartman 25:15
Yeah, right, right. In that sense, you’re up and down
Dan Amerman 25:17
the street. You go by any strip shopping mall, you go by anything like that. You have small business after small business after small business. And you do have the increase in unemployment insurance, this at least temporarily going to the workers, you have a very efficient flow of money. And this is just again, Jason, this is the last two weeks. This is unveiling to by day, our day by day. You have a massive flow of money to major corporations, and you have a massive flow of money to large cities and states but not small cities at this stage, and there’s just what I’ve been reading is they’re searching for and they don’t really have Have a good method to push that money out to the small businesses.
Jason Hartman 26:04
Okay, so how does that tie in with UBI? universal basic income?
Dan Amerman 26:07
Well, what what that does is that basically wipes out employment for a good part of the population, because quite a few people work for this small business. Right. Sure. And you know, it’s hard for them to come back from that basis. Instead the economy consolidate some more. And I would argue it’s been deeply unfair for some time now, in that the major corporations have access to far lower costs liabilities than individuals or small entrepreneurs.
Jason Hartman 26:35
In translating that you mean, they can just get fantastic, cheaper, free debt?
Dan Amerman 26:41
Yes, they can borrow at one to 3%, which in real terms is getting paid to borrow it’s it’s negative interest
Jason Hartman 26:48
rates because yes, by the time they take the tax deduction on the interest, and by the time inflation happens, even when it’s super moderate, they’re getting paid to borrow the money,
Dan Amerman 26:57
whereas the average consumers 17 eight 10% on a credit card, you know, there’s a huge discrepancy there. And this is I think, as we amplify here, that’s just gonna get greater.
Jason Hartman 27:07
I think, sadly, you’re right. What action should people be taking now?
Dan Amerman 27:12
The, this is something I’ve been writing about regularly. I already did have a full length free book out, you can sign up for my website, Daniel Ammerman. com, called cycles of crisis and the containment of crisis. And I think what we’re looking for probably first and foremost is just understanding that right now, April of 2020, we’re in a very different place than we’ve been before. And it’s going to be difficult to go back. And the when we look at any investment decision of any kind, be it investment property be as some other form of real estate, be it stocks or bonds, the role of the federal government, the national debt, Federal Reserve policy, Federal Reserve Balance Sheet, their liability structure is all crucially important for determining investment results. And probably a lot of people hearing that said, that’s crazy talk. That’s absolutely crazy talk, right? That’s not how we look at investments. Yeah, we look back and we look at prices over time and inflation adjusted terms, and we look at p e ratios, and we look at what asset class performed well, and this decade or that decade, and so forth and so on. But the problem is that historical information all becomes, for lack of a better term garbage. To the extent you’re looking at what’s happening with prices, when we have a Federal Reserve dominated market, with an extraordinary national debt, each of which produce these just distorting waves that go out and change everything.
Jason Hartman 28:50
I almost don’t have a comment, really, for once in my life. It’s so absolutely amazing. Being one of the things I think your students and myself students struggle with is the way to distinguish inflation in terms of asset price inflation, and consumer price inflation, you know, the age old question, do we have inflation? Or how much is inflation? What is the real inflation rate? Can you dive into that a bit and just unpack that for us a bit? Of course,
Dan Amerman 29:24
I think about it mathematically. And it is, I think, difficult for most people to follow that, particularly if you’re verbally describing mathematics. But what happens is that inflation itself is inherently deceptive in terms of you have something that is worth less and less, and that is expressed by there being more and more of, and that’s just confusing. If you have $200 or you can sell something for $200. That looks like you have more of it. But the reason it sells for $200 is because $1 is only worth 50 cents compared to what it used to be. Now let’s take that and let’s go a little bit further. Let’s say that something becomes worth $200 instead of $100. Well, most people say you’ve made $100. Right? Hmm. And the IRS definitely says you made $100.
Jason Hartman 30:23
Right? Because one of the things you taught me early on was that the IRS doesn’t know how to calculate inflation for its own benefit. It ignores it. But sometimes investors benefit from that, too. They can.
Dan Amerman 30:36
Yeah, they can. But But yeah, something to keep in mind about inflation. And none of this is an accident. The Federal Reserve creates inflation as a matter of governmental policy. And the Internal Revenue Service does not see inflation as a matter of governmental policy. And that means actual tax rates are quite a bit higher than what is disclosed. That very consistently applies. That was kind of an aside. There, to get back to the example. If we go if we had an asset that was worth $100, and it became worth $200, as a result of price inflation, then to most people looks like you’ve doubled your money, right? If $1 had become worth 50 cents here, you would still have $100 of purchasing power, right?
Jason Hartman 31:20
So you didn’t double your money.
Dan Amerman 31:22
But let’s say their dollar became worth a quarter, then your purchasing power has gone down to $50. Right. So that is an example of price inflation, a change in the value of money and asset, deflation, a decrease in the value of the asset. And the most recent analysis I just put out a couple days ago, I took a look at what we had seen last time we had a simultaneous inflation shock, just a good chance to turn out this way in terms of the hit to the supply chain and so forth, and a drastic increase In unemployment, and that was the 1970s. And that was actually a perfect example of high rates of price inflation, you call it monetary inflation. Some people say that’s the supply of money. We don’t need to get that esoteric, and asset D flesh, because over the 14 years between 1968 in 1982, it looks like the Dow Jones just barely lost money. But it was in fact off by 70%. Most people don’t realize that last time around, we have this combination of circumstances. The market in a secular bear market, meaning long term in more than 10 years, lost 70% of its value. And that was almost entirely hidden by money losing 65% of its value.
Jason Hartman 32:50
Isn’t that just amazing? And
Dan Amerman 32:53
it was it was dominating? Yeah, you know, it’s not a middle little numerical trick.
Jason Hartman 32:58
This is reality. duration of stock investors, particularly if they’re close to retirement age, and it is something that people really just don’t notice properly. It is the best method of wealth redistribution, taxation is a very obvious method of wealth redistribution. But inflation is tricky. It’s sneaky, right?
Dan Amerman 33:19
Oh, absolutely, absolutely. And, and that’s one of the really interesting things about real estate asset liability management strategies, that is a lot more understood. And where I used to work on more of the institutional investment banking research side than it is on the individual side. But for people who understand that, you can take advantage of combinations of liabilities and inflation to just make massive sums of money. And with individuals we have far fewer options, but at least at this point, mortgages are very good way of doing
Jason Hartman 33:51
because mortgages are, they’re not only cheap, they’re actually better than free. You’re getting paid to borrow the money, you know, damn, you’ll appreciate shape this more than most people I know, we had a client on the show a few weeks ago. And he just purchased a property through our network. His interest rate was three and a half percent or I think it would know as 3.75% for three decades fixed. We had another client, by the way that just got 2.99 on a personal residence. You can’t quite do that on our investment property. But we looked at your taxation, you’re almost 100% interest in the beginning of that amortized loan. So your taxes are about 1.75%. And if the inflation rate is 2%, you’re literally getting paid to borrow the money. Even if you never rent the property out. Isn’t that just a miracle?
Dan Amerman 34:45
It is, and it’s an unfair? Yeah, we can tap into that. That’s one of the few ways an individual can do it.
Jason Hartman 34:53
Absolutely. And it’s one of the reasons the rich get richer on free. Unfortunately, you know, it’s not fair. But it is the It is. So
Dan Amerman 35:01
what’s happening, if you look in the last few weeks, is that we’re seeing a lifetime change happening where there’s a realignment towards that. Mm hmm. Because we’re gonna have a much larger national debt. The Federal Reserve is gonna have a much larger balance sheet. They’re going to attempt to manage the situation and economic recovery with extremely low interest rates. And there’s virtually no way out of that scenario. Plus, there’s very strong benefits from the perspective of a heavily indebted nation to engage in what’s called financial repression, which is where you have a very deliberate matter of national policy. Many nations have done this many decades. You have interest rates that are below the rate of inflation. That becomes a dominant influence for a generation at a time and it sure seems like we’re moving really faster.
Jason Hartman 35:55
Oh, I couldn’t agree with you more. Dan. It’s always so interesting. Talk to you folks. Again, you can get that free book at his website and wrap it up for us with just anything else you want everybody to know. I think that takes care of it. So talk to us, Jason. All right. Thanks, Dan. Happy investing.
Dan Amerman 36:13
Thank you, you too.
Jason Hartman 36:18
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