Charlie Munger predicted interest rates will rise for 40 years. The discussion covers what that means for mortgages, real estate, and investment strategies, with analysis of how large firms are positioning themselves.
Do you guys know the name Charlie Munger?
Yes, sure do.
He said that we saw 40 years of declining interest rates. They anticipate to see 40 years of increasing interest rates. I had a clip of that on YouTube. I go to that clip now and it's taken down. You can't access that clip anymore. I have spent about six hours of going through every edited version of that interview, and it's no longer in there.
Even your mortgage professionals, for the most part, with the exception of you, Aaron, are talking about refinancing. And correct me if I'm wrong, but they're getting paid to refinance you as well. Yes, 100.
That's why they're talking about it. That is their career path. So, yes, very, very recently, there's a lot of people in the mortgage industry. They're saying, well, why don't you just take an ARM loan because you get a lower interest rate and then refinance when the rates go down? Well, what I'm explaining to everybody, because I had a big run for about a year there after, well, probably about six months. Everybody's saying, can you guys do an arm? Everybody says I should do an arm. So why do you think they're saying that? They said, because I can refinance in five years. Well, one, you're just setting yourself up to be their future business. And that's exactly what all the leaders in the industry are saying, sell the arms. So you have future business. Right. Keep track of those clients and market to them in a few years. So that's their future business model and business plan. Secondly, who says the rates are going down?
That's right, yeah.
Do you guys know the name Charlie Munger?
Yes, sure do.
So he was on a. I think a CNBC or msnbc, I can't remember which one, I think is Christie Quick. That she was. He was being interviewed by. And in that interview, it was earlier this year, he said that we saw 40 years of declining interest rates. They anticipate to see 40 years of increasing interest rates. I had a clip of that on YouTube. I go to that clip now and it's taken down. You can't access that clip anymore. I have spent about six hours of going through every edited version of that interview, and it's no longer in there. What's also interesting, I downloaded the interview, what I believe is the interview, and it's been redacted from the transcripts. I can't find it. Why do you think they can't find it? Because they don't want people to know that we could be on a 40 year increase of interest rates. So you don't lock it in now, you wait till the next thing. Now there's so many people sitting here waiting. Well, I'm just gonna wait till the rates go down because say the rates go down. Well, okay, let's say they do. What do you think house prices are going to do?
They're going to still go up.
Yep.
Can they keep going up?
Right? Yep. We went. It's amazing how many realtors I talked to or I've heard from like you banks in the damn rates and they're bitching us like it's us. Right. So what about you damned realtors that would tell your, your, your client when they want to buy a house that you better come to the table 30 to 50,000 over list just to get in the game? Nobody about raising prices 30 to 50,000 because interest rates were two and a half percent. You gave away the benefit of the interest rate in the of the house. Yeah. So now we're at an equilibrium where the price of housing kind of semi stagnated. They really have an 8.9 increase. But there's some areas that actually have come down a little bit. I'm telling people you better lock in the price now because if you're right, let's say Aaron Chapman's wrong and the interest rates do go down, you better have locked it in now because you're going to get screwed hard. And what's really interesting is even though the rates are going up, the cost of housing is not going down. Why is it not going down? What are the hedge funds doing? They're buying the hell out of it. You got BlackRock, you've got Vanguard and State street are anticipated. This is anticipation. I don't have all the statistics on this. This is anticipation for them to control 60 plus percent of the available single family housing by 2030-2035. If they do that, they will have accomplished turning us into a subscription based economy for the next few generations. Our generation will make it through. But what about our grandkids? I've got a grandkid here at my house today. I've been watching her most of the morning. She's not going to have a shot at this if we don't do something. Now you want to talk about freedom family investments. The freedom for the family should be buying investment real estate now because it's not going to be available later. I just closed on two houses in Missouri because I have two kids moving out there, both five bedroom homes. For a couple hundred thousand. We the our family trust paid cash. I put liens on it. I'm a refinance. Pull the cash back out of it, put it back in my. In my accounts to keep expanding our holdings. But that's the only way they got a shot at this is to rent from the trust. And then the trust is going to keep growing it and keep growing it for the future generations because if we don't do that, they're going to be taken advantage of. And it's my opinion, again, my opinion, because I know the future. If we're not doing this now, we're going to end up being the ones paying the subscriptions, not offering the subscriptions.
That's right. That's right.
Wow.
That's so powerful.
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