1356 FBF: Future of Interest Rates & What Taylor Swift, Uber, and Robots Tell Us About Money with John Tamny, Part 2

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Welcome, listeners from around the world to episode 1004 1004. This is your host, Jason Hartman. And today we have the fascinating part two of our Monday interview with John Tamney. So I hope you enjoy this, but before we get to this, I am talking to you from New York City, the Big Apple today. Yes, I have done a lot of walking this evening, walking the dog all around Central park. And boy, you know, you can just walk, walk, walk in these places. And I tell you something, of all the exercises that are just easy to do, just get out and walk, folks. Take a walk. You know, it's easy and it's enjoyable. It does get a little tiring after a while. It's not intense, but it's better than nothing. So get out and take a walk, see the world, get some fresh. Well, in New York, the air is not very fresh because you're usually breathing exhaust and you pay an awful lot of money to live here and breathe that exhaust. I've never really understood living in big cities. They're expensive and I don't know, I don't think the quality of life is that great. But hey, that's just Me, I can see there are some benefits. They're great to visit, but I don't want to pay for the real estate prices in places like this. I like to live where the cost of living is reasonable. And speaking of which, now that I have just left Las Vegas, Sin City, thankfully I'm glad to have left. I never liked the place that much before. I wasn't super crazy about living there, honestly. But I was quoted in a realtor.com article last week as I was talking about Las Vegas. They asked me for a quote and I talked about the tax refugees. The tax refugees. Refugees. I believe that is my phrase. I don't know. I'm gonna claim credit for it. Might be wrong. Maybe I heard it somewhere and I didn't remember. But the tax refugees from California go to places nearby first. They go to places like Nevada because it's close and you're not too far away, but you don't have the massive tax burden of the Socialist Republic of California. My former home and now Las Vegas is my former home too. I soon announce my new home, so stay tuned for that. But yeah, it was interesting when you look at these places in different places in which you can live right all around the world, you know, so many people are so mobile and portable nowadays, which is a great thing. Little side note here, little tangent. I always talk about how it's an amazing time to be alive. However, I want to qualify that statement. Yes, I do believe it is an amazing time to be alive. And when I say that, I am mostly referring to technology and the massive, incredible innovations that technology has brought us. The small networked world that ultimately will probably lead to more world peace. Or more world peas. Yeah, that's a bumper sticker joke. Maybe you've seen it. World peas or world peace? Technology has a way of bringing people together. It also has a way of separating people. It's complicated. And I do believe it really is an amazing time to be alive. It allows us to do so much in the investment world with our personal finances. We can be long distance real estate investors, 400 markets around the U.S. you know, as the old saying goes, the world is our oyster. That is a wonderful, wonderful thing. We've got all these great tools that we talk about on all the episodes of this show, the last 1003 episodes. But, but, but, but wait, wait. It's not that good. It is an amazing time to be alive. Except for the culture war. When we look back on this time in history, 100 years from now, 300 years from now, 500 years from now, maybe, just maybe, we will consider this the cultural or a cultural. I mean, we've had others. Dark age. A dark age, yeah. I'm not kidding. I mean, did you ever see the movie Idiocracy? It is so amazingly scary and sad how really messed up the culture is in so many ways. So, yeah, it's an amazing time to be alive, but we might, we might, we just might be living in the cultural dark ages. Think about it. It's a possibility. I know there are some great things going on in the world, but, wow, there are whole swaths of people that are. I was going to say they are left behind, but I don't think they're really left behind. I think they've chosen to be left behind. You know, when you say left behind, that implies that, like, the world left them behind and abandoned them. And that's true to some extent, but a lot of it is just simply by choice. It really is. I mean, ever since, you know, I talked about my friend Rick who said that the peak of society was 1990. Yep, that's Ricksterism. Rick is a bright guy. He has a lot of interesting things to point that out. And, you know, if you look at what happened right about 1990, and this is not Rick talking, it's me talking, but that's when there was a major shift in the music. Then when you change the music, you change the culture. I've said it before. You know, there's that Rothschild quote that I will bastardize again here and totally mess it up. But essentially it said, let me control the money and I care not who makes. Makes the laws. Right. That's the. The Rothschild quote. The famous, you know, banking family, obviously, that runs the world of banking and the world in essence. Right. But I say let me control the music, and I care not who controls the money or who makes the laws, because the music is so impactful on society. And so, yeah, cultural dark ages. It's a possibility. Let me know what you think about it. I'd love to hear your feedback@jasonhartman.com ask jasonhartman.com ask. I know it says ask, but sometimes it's tell. You know, it would be too complicated to have a tell and an ask. So just go to jasonartman.com ask and tell me what you're thinking about. Whatever. Ask your questions. I'll give you my answers to your real estate questions, the economy, whatever you want to know. Or tell me something. Tell me what you think. Tell me you think I'm crazy. Tell me you think I'm right? I don't know. Whatever it is, I'd love to hear more because we have such a brilliant audience. And speaking of our brilliant audience, you know, at our Creating wealth seminar, our one day event that we had in Philadelphia a few days ago, we have such incredibly bright clients. I tell you, I'm not schmoozing you listeners. I'm not schmoozing you folks, you clients and listeners, because you are really high level people. And I know you're high level people because hey, on the show we've got high level content. And if you weren't high level people, the high level content would bore you, right? You know, really dumb people. Speaking of the culture war, right? Those who want to be left behind and want to be ignorant. Right? Because you don't have to be nowadays, right? It's purely a choice. You don't have to go to school, you don't have to spend a lot of money. You can simply go online and take free courses from Macahn Academy or many other places. There's lots of free learning out there. Doesn't cost money. That excuse has been removed. That excuse is cancelled. It's done. Money not required. Just curiosity and some discipline. That's all that's required nowadays. We had an attendee at this event who was, get this, a grape designer. Yes, I love it. Designs grapes. Yeah, grapes, you know, engineers them so that they will withstand tough climates and can still grow. So hey, maybe we will have a new wine country at the ice hotel in Sweden where we just did our Venture alliance trip last month. So you never know if the grapes can grow at the Ice Hotel in Sweden. It's a possibility. It's an amazing time to be alive. It really is an amazing time to be alive. But it seems that it's that way for only about half of the population. The other half, you know, they almost don't want to be part of it. It's like they're rebellious teenagers or something. It's weird. I'd love to know what you think. Tell me more. Jasonartman.com Ask so tomorrow, you know, it hasn't happened yet, but I want to tell you tomorrow I'm going to show up real early and I am scheduled to be on the Today show doing the weather with Al Roker. Yes, me on doing the weather with Al Roker. That'll be interesting. I plan to give a little real estate weather report. So we'll see how. How much of a sound bite I get to get in there on the. On the famous morning show tomorrow morning here in New York City. So we'll, we'll see what happens with that and more to come. Maybe we'll play the clip on a future episode if you don't see it on TV live. So Martin Armstrong, he's been on the show before. He's the Economist. Really interesting guy for sure. We did a very interesting interview with him a few years back. We need to get him back on the show. I know some of you have asked for him to come back and he has some interesting stuff to say while he is out with a new video with Greg Hunter who has also been on the show. And we probably need to get him back on the show. Hey, I gotta talk to our guest booker and invite these guys back because it's been a while. Anyway, Martin Armstrong is talking about how interest rates are going to jump to. You ready? Sitting down. Can you handle this? Okay? If you're on a treadmill, jogging, listening to this, slow it down a little bit because I don't want you to trip and have an accident here. This is, it's a bit shocking. And Martin Armstrong has some pretty, pretty solid thoughts on some things when it comes to the economy. He claims that interest rates are going to jump to 10%. 101 0%, which historically. Well, hey, they've been much higher than that before. But that would be a pretty big jump from where we are now. It would be very significant. What happens if it happens? Well, there's a lot of fallout from something like that. Obviously one thing is we will see suppressed real estate prices possibly, very possibly. However, we will see upward pressure on rents because the buying will slow but the population continuing to expand. And by the way, that's not exactly what's happening on the long term trend. I want to talk to you about that demographic bubble, demographic time bomb that some are worried about except the leftist tree huggers who hate people and want them all to die because they're ruining the earth. Okay, another subject again, isn't it? But yeah, there's a real decline in birth rate pretty significant except in with women over 40. There is a spike in that demographic cohort segment. Having kids, but probably waiting way too long, obviously. But hey, career, you gotta have a career, right? You gotta be the slave to a corporation. Gotta be a slave to a corporation rather than being a slave as a housewife. Right. Because that was way more evil than being a slave to a big corporatocracy. I don't know. Sometimes you really gotta look at the end result of all these Things, folks, and ask, ask the question. Sit back, look at the, you know, back up from the canvas, back up from the painting on the wall. Quit looking at the little brush strokes, back up, get some perspective and look at the big picture and ask are we really better off? Hmm, not sure. Not sure. In so many ways in society, not just talking about being a slave to a corporation. Right. But anyway, there is a bit of a demographic time bomb some people are talking about and worried about. But don't worry about it as far as your real estate goes because that time bomb is 25 to 30 years off. So nothing to worry about today, folks, but it's something to think about for the future. Right now we have this explosion of people that need home homes and not nearly enough supply. They either have to buy or rent or be homeless. So if rates go up to 10%, we're not going to see them buying as much, but we're going to see them renting a lot more. So we're going to see a lot more upward pressure on rents. And hey, we are interested in upward pressure on rents. That is good for investors. Investors who are already in the game pray for they worship at the altar of high interest rates because they already got their low rates. It's like the environmentalist. You know, what do you call a developer? Someone who wants to build a house in the woods or at the beach. Right. What do you call an environmentalist? Someone who already owns a house in the woods or at the beach. Right. And that's the same with US investors. If we've got all our nice 30 year fixed rate, low interest rate loans and the price of those loans increases later, well that's good for us because that means it will be more expensive for those that come after us. There's a much higher bar for them. So they either won't enter the market number one. In other words, other investors won't enter the market. So there will be less supply of rental housing available to renters, meaning the housing you have available as supply to them will increase in price dramatically. So three dimensions of real estate stuff. We've talked about it before. I won't go into it too deeply today. But hey, time is of the essence here. Let's get to our guest. Go to Jason hartman.com, check out properties, Ask me questions, give me feedback@jasonartman.com ask. We are here to help you with all of your investing needs in the most historically proven asset class in human history, income property. Let's get to part two of Interview with John Tamman.

Let's switch it up and let's talk about robots and automation. Let me just kind of open this up if I can. I can't wait to hear what you say about this. So a few things. Number one, the U.S. census has, you know, done all these studies over the years. And, and one of them is that the only job that disappeared in the last, like, I don't know, 100 years due to automation was one. There was only one job that disappeared and that was elevator operator. We operate our own elevators nowadays. That career path has gone and everything else is still with us. Right. I just wonder though, and the famous last words of any investor, John, if this time it's different.

And why I say that is because the technology is startling now. It is. And I guess they probably thought that when the steam engine was invented too, maybe. But the transportation industry, arguably the biggest industry on earth, right, is transportation, whether it be trucking, taxis, Ubers, Lyfts, ups, mail, whatever it is, right? I mean, this is getting automated faster than fast. And all of these drivers, they're not. It is beautiful. I love it. And by the way, I have a theory about that. You know, a lot of our listeners are real estate investors. The biggest value driver for real estate since the beginning of time, since we were living on cave in caves, is location, location, location. Three biggest value drivers. I think that's going to be under pressure because I think location is going to be less meaningful than it's ever been in history. Still meaningful, just less meaningful. Interesting little side note, but, you know, these Lyft and Uber and taxi drivers and truck drivers are not going to become robotics engineers, are they? I mean, what are they going to do?

Well, they're not. But if we knew exactly what they were going to do, you and I would both be billionaires. But I would just make the point that you want to talk about the biggest industry in the history of mankind. It was food. If you were born 150 years ago, odds were substantial, even in the United States that you knew exactly what you were going to do when you were able. You were going to work on a farm until you died. And then the first robot came along, or arguably the first, it was the backhoe followed by the tractor. Easily the biggest job destroyers in the history of mankind. But far from putting us into breadlines, now they just freed us up to focus our energies on other things. We invented the car, plane, computer. If it were about jobs, it would be simple. If we want to create jobs, let's just abolish the computer, the ATM machine.

And WI fi and join a union that wants to live in the dark ages and use clipboard. Right.

And so everyone will be working and everyone will be incredibly poor. But if, you know, in Bangladesh everyone's working.

Yeah, right.

It's just that they're miserable. But everyone's got a job in Bangladesh. And so technology is by definition about job destruction. And implicit there is that we're going to run out of things to fix. But as I look at the world, I there's still so much to fix. We haven't fixed heart disease, we haven't fixed cancer. Furthermore, we're not nearly as entertained as we want to be. The reality is that all this automation is going to lead to a surge in new kinds of jobs simply because it's going to free us up. Used to be that we work six days a week. In the days before automation, automation meant a five day work week. We're obviously headed toward a four day work week. If you believe my book. That means there's going to be a surge in the demand for entertainment. And so you see it in the NBA right now, they had a draft a little over a month ago for NBA 2K, not for basketball players, for video game players. Video game players now profession so lucrative is it is that video game coach is now a profession.

Well, there you go. That's a good point. That's a great point.

People love to dine out. You look back to the 1970s, Chef wasn't even a professional qualification back then. If you told people you're going to get into cooking, back then they thought, oh, what happened? Kids were embarrassed back then if their parents worked in restaurants. Now they brag about it. Now becoming a chef is an alternative to becoming a doctor or lawyer. And it's so specialized, it's so advanced that there are now pastry chefs. Just the other night, James Beard Award, they awarded the pastry chef of the year. And so there will always be jobs. Robots will certainly destroy jobs. And what they'll do is the result will be jobs that we go to work each day and that we're experts in.

Okay, so more specialization of labor, obviously, which is.

And you hit on something crucial because what does specialization mean? When you can specialize, that means you can be an expert. And when you're an expert and specialized, you're much more productive. That's all free trade is. It's just the acknowledgement that we're not good at everything. And so it frees us up to specialize in what we do best. Robots will take all the drudgery off of our plates and allow us to go to work each day and express our unique talents, our unique intelligence. I don't buy that anyone's stupid or lacks work ethic, but imagine if you and I had to work on a farm every day. I can say in my case, I would be very lazy and I'd be an object of pity. Thanks to automation, I don't have to do those things. Thanks to automation, in the future, more and more people will get to do what they love for a job.

Okay, yeah, Very, very interesting. So it'll become more specialized. So thinking of it in terms of everything is going to be some kind of high tech job. As we become automated, the jobs left will be all these high tech jobs is just not accurate. Because the truck drivers don't have to become robotics engineers. You're not going to need that many people. There will just be whole other areas created. And certainly we've seen that. I mean, the human imagination and amount of specialized labor, it's startling. We don't even know what we don't know, do we?

You say it so well. Exactly. Implicit in this notion that we're going to run out of work is that we've basically exhausted the ability of people to innovate and achieve and desire more stuff.

Not just innovate and achieve, just want more. The human want is just unlimited, right?

Yeah. Were you and I demanding uber 10 years ago? I wasn't. Gosh, I would have liked it. Were we demanding the Internet in 1990? No. And so what's important about this is that in Silicon Valley, it's not just that there are tech workers. You hit it on the head. It's not just that. Those are the jobs being created. Thanks to all that innovation out there, there are countless yoga structures being employed, countless doctors, lawyers, countless baristas, countless sommeliers, countless chefs. Right now in Silic Valley, there is a war on among companies to lure the best chefs to these different companies, these different booming companies. And so the jobs that will be created as a result of this are going to be endless. Right now there are countless people who earn a living just based on posting their shopping habits online. That is now a business influencer, is now a job. People who love football, you're in for an amazing future. When Bill Belichick got into coaching, the average NFL assistant was paid $25 a week. Nowadays, my goodness, assistants earn the millions of dollars a year. Boise State has a 2 million dollar annual budget for assistant coaches alone. In the state of Georgia alone, there are 23 high school football coaches who earn over $100,000 a year. This is high school. Wow. This is the world we're evolving into. If you have a hobby, if you love something, there is a career for it. Video games, football, shopping, you name it. 30 years ago if you said you're going to get into be a small sommelier, people would have laughed at you. Well, now it's a growing business. And so with the automation, the demand for entertainment, the demand for dining at all levels, the demand for all sorts of services is going to explode.

Yeah, no question. Yeah. And it's truly amazing. I mean, you know, you, entertainment demand is, is stunning. You know, it's interesting though, there were predictions in the early 70s that we would only work three days a week in the future by the year 2000. And that the computers and the robots and all the technology coming was just going to make our lives easy and we weren't going to have to do anything. People will just sit there and be the masters of the machines, if you will. That certainly didn't happen. You did say just now we're going to have a four day work week. So what do you say?

This time is different.

Yeah, yeah, yeah. The famous last words of any investor, right?

No, fair enough. What I would say is that the 1970s predictions were simply early. But it strikes me we're getting closer and closer to it. And if the robots fulfill their promise, it's inevitable that people will be able to get done in three and four days what it used to take five. I mean, there was a time when the average person works six days a week. Now what's interesting to me about this is I think I describe you and saying and how I describe me. I love what I do uncontrollably. It's nothing for me to work on weekends. And so where I see this happening is I think people will have more and more have the option to work less and there will be more and more four day a week office jobs. But I also think as a result of all this prosperity, what I describe in the book Tammy's Law, that as prosperity grows, more and more people escape laziness because they find work they love. I think we're going to see a scenario whereby people are working really long hours just because their work is how they express their unique intelligence. Yeah, very good work is their joy. And that wasn't true in past generations. My dad would have loved to have been a basketball coach. That's really what he wanted. But he had a wife and two kids. It wasn't the responsible thing. Nowadays it's fully normal to do that and it's remunerative. If that's your passion. You can be in basketball all of your life and you can have a very nice life for being in basketball. So different. And it's going to get better and better. Work will be about going. People will race to work because that's where they're experts.

No, Right. That's where they get the recognition. That's where they get the fulfillment. That's a great thought. I certainly hope that that happens. And it does. It does seem. I mean, certainly the technology has made the boundary between work and play. It's made it very non existent. But you know, people are. They have a lot more choice now. Now that the work isn't drudgery. It shouldn't be drudgery. It should be good. One last thing I want to ask you about and I'd be interesting. You know, it's interesting. A lot of my libertarian friends, oddly are in favor of UBI Universal basic income, which to me, at least at first Blanche, seems like another welfare program. Right. I'd be really curious to see what you think of it. I don't know, you might be kind of counterintuitive. I would assume you're against it, but.

I. Yeah, I'm very much against it. No doubt you're familiar with public choice theory. Can you imagine handing politicians the right to run on who is going to raise our ubi? The immorality on its face of people able to vote themselves raises on the backs of others. I think it's a work disincentive, but I would argue that that's probably overrated. My guess, as in talking to you is you love what you do. I love what I do. No basic income could stop me from working. And so I don't think that it means everyone would just sit on their hands and wait for a meager income. But I just think it's dangerous. I don't like the idea of people being able to vote themselves income. That is very, very problematic to me. And so no, I would be very much against the institution of something like that.

Okay, good, good stuff. Interesting discussion for sure. John, give out your website and tell people where you can find the books and so forth.

The website is www.realclearmarkets.com and then the new book is the End of Work. You can find it on Amazon, Barnes and Noble. You can find all my books on there. They're all very optimistic assessments of the future.

Fantastic. John Tamney, thank you so much for joining today. Very interesting discussion. Appreciate having you on.

Thank you for having me on, Jason.

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