1386 FBF: Dodd Frank Repeal, Criminal Tenants, Blockchain, Florida, Landlord Friendly Markets

Hey, Jason, this is Patrick Anderson. Just wanted to say congrats on a thousand episodes and wanted to let you know how much I appreciate all the education you've given me personally. It's helped a lot. I just wanted to reach out and say thank you for everything you've done and appreciate all your help in real estate investing. Have a great day.

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. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome listeners from 165 countries worldwide. This is your host, Jason Hartman. Thank you for joining me today as I am coming to you from Palm Beach County, Florida. Yes, beautiful Florida. And you know, I have often wondered, maybe you can enlighten me but by going to Jason hartman.com ask Jason hartman.com ask and enlighten me as to why Florida is the butt of some jokes, not all jokes, but when we look at different states around the country, I'm sort of confused as to why Florida gets occasionally, not always, certainly a bad rap. Why is that? Is it because of the hanging chads? Is it because of the election debacle from many years ago between George Bush and Al Gore? I don't know know what it is, but yeah, Florida does get kind of a funny bad rap, you know, today I knew I was in Florida by the way. Last night I arrived back from New York from the Venture alliance weekend in New York City and I got back, flew into Fort Lauderdale last night and today I saw something I have never seen before that made me realize I was in the state of Florida. You ready? You ready for this one, folks? I was driving down a very beautiful green tree lined highway and on the other, other side of the road the traffic was all stopped. Well, I got a little closer and I noticed that a woman had stopped her beautiful 7 Series BMW in the middle of the road. And I thought, oh, this must be an accident, a flat tire or something. No, that was not it she was in front of her car, bending over, picking up what appeared to be. Well, it didn't appear to me because on closer inspection, I realized exactly what it was. An object that was about maybe 8 or 10 inches wide and maybe 10 or 12 inches long. Kind of an oval shaped object. You know what that object was? It was a turtle. Yes, it was a turtle. In the middle of the road. I realized I was in Florida. Traffic was stopped so she could lift up the turtle and escort it across the street. See, folks, humans do nice things for animals. We're not all destructive. You know, we don't always make species go extinct. In fact, many human species are going extinct. Does anybody care about that? No, no. But that, of course would be a conversation you can't even have in politically correct world nowadays in the western world. It's just kind of crazy, isn't it? But whatever the case, yes, I am in Florida and I am in the FSN studios. My guest today is Carrie Lutz. And we are here in real time, face to face. Yes, that is rare anymore that we have a face to face interview in the world of high technology, Skype and Zoom and all these different platforms to have meetings really is an amazing time to be alive. And you know, if you think about it, just remember what I always say. Watch old TV shows, watch old movies to realize how much the world has changed and how much more convenient your life has become in so many ways. And again, technology. The battle rages on between the deflationary effects of technology and the inflationary effects of bad monetary policy. So we see asset prices are high, aren't they? They are very high. We see the cost of housing, healthcare, college tuition. It is enormous. I did something interesting this afternoon and maybe my guest will have a comment on this. Kerry, how are you?

All right. Jason, hey, it's great to be here on the show with you from the Southern Command.

The Southern Command, yeah, I think another radio host uses that line. But that's pretty good. We'll see if our listeners can figure out who that is. Kerry suggested. Well, he didn't suggest. He just said he was going. And I said, hey, I want to go to this. So today I did something I've never done. You know, I went to a stretching session, a stretching gym. Yes, they have those things here in Florida. But this really needs to be all over the world because it is great. It was a half hour stretching session where you lay on the table and this pretty young girl stretches you out. She moves your body around and that felt really good. Carrie.

Hey. I've been doing it, Jason, since I moved down to southern Palm beach county in August. And since that time, no back problems. I wake up in the morning, no pain whatsoever. It's an amazing discipline to get into.

I'd recommend the stretching. I think that's really good. Now, listen, I've done like, you know, a couple thousand yoga classes in my life, and that's good. Certainly. I believe in fitness and health and eating right, by the way, if you want to eat right. Let me tell you. We will talk about the economy and real estate here in a moment, folks, but just a little few things to get out of the way. I got a public service announcement. Two of them, actually. The first one is I became an affiliate for my favorite food that has changed my life. It changed my life about four years ago. And you can find that@JasonHartman.com Food Check that out. Public service announcement, JasonHartman.com Food I'm one of only seven affiliates in the country. They don't really do affiliate programs, but I just insisted because I like this product so much and I've mentioned it before on the show a few years ago and a couple of you wrote me and told me how much you liked it, by the way. So check it out. Jasonartman.com Food Save the Capitalism here for a moment. Another public service announcement. The FBI. Yes, the FBI. The Federal Bureau of Investigation is recommending that all of you, as soon as you're finished listening to this podcast, of course, reboot your router in your house, because apparently there are some malware floating around that can infect your router, that can infect your computers and your devices, and you don't want that. So just reboot your router, go and turn it off for about 30 seconds, let the capacitors drain out of the electricity the same way a Tesla car drains far faster than Tesla will tell you, then turn it on again, reboot your router. That's what the FBI is telling us to do. So talking about real estate here, Carrie, you know, I'm looking at this Yahoo. Article, Yahoo. Finance, that says the U.S. housing market has an inventory problem. The U.S. housing market has an inventory problem. Well, thank you for the blinding flash of the obvious, Yahoo. But, you know, it just really reaffirms the point. It says in April, existing home sales fell 2.5% to an annualized rate of 5.46 million. On its own, this is not a remarkable story. The more notable part, though, is the trend has come to define the US housing market since it bottomed in 2012. And you know, right there is kind of interesting. It just shows that you really have to slice and dice this stuff, obviously, because I don't consider that the bottom of the housing market. I think it was a couple of years before that. But it depends where in a country as large and diverse as the United States with 400 housing markets, you know, it's changes, right? Is that the linear market, the cyclical market, the hybrid markets, or any various geographies. But this is the problem. This is what is slowing sales. The counterintuitive concept is that when you're dealing with something of such scarcity like housing, when you have this inventory shortage, that on the one hand is of course making prices go up, it's making rents go up. We all know that. It's making sales fall because there's nothing else to buy. It would be if Apple released, you know, the next iPhone and they didn't have enough of them, right? They, they had a constraint on the inventory if they couldn't get enough of the parts to build them all. That's pretty much what's happening to the housing market. I have really no doubt that we could increase our business by 50 or maybe 100%. We could maybe double our business if we had more inventory. Because there is a huge inventory short. Which, by the way, I want to point out that we are redesigning the properties page on our website@jasonhartman.com properties because, and I know a lot of you go to this page, it is one of the most highly trafficked pages on our website. A lot of you go there and you simply look at the markets that are profiled. But wait, there's more. Because if you look at the map that's on the page and you hover over the various states on the map and you click on a certain state, you will see that there are many other, other, what I'll call for lack of a better name, pocket markets, where we have other properties for sale that you can purchase and they're great. We just don't have a lot of inventory in those markets. Well, we don't have a lot of inventory anywhere, frankly, because inventory is scarce. Well, Yahoo agrees with us, right? Yahoo Finance. Inventory is scarce. And so you go there and you click on the map and you can look at some of the other markets that have even less inventory, but a lot of you don't see that. So I just want to make sure that I point that out to you, that there is more inventory. If you look at the map@jason hartman.com properties the map of the United States. Okay, Carrie, you host a very successful podcast. I've been on your podcast many times. Financial Survival Network and on your shows you've interviewed I don't know how many thousands of people now.

Oh God, we're over 5,000 episodes in the past seven years.

That's a lot. Okay, so have you, you've talked a lot about cryptocurrencies and blockchain and all that stuff, right? So have you talked about or looked at the non monetary applications of blockchain?

Oh, very much so. We went to the North American Blockchain Conference which was held in Miami, I guess it's city of Miami, not Miami beach, earlier in the year. And there was all sorts of security tokens that they were proposing. Securitizing exotic cars, potentially securitizing real estate. I talked with the guys who were working hand in hand with overstock.com to revolutionize stock trading. Because look, if you can trade tokens instead of stocks, the transaction costs go down so dramatically. You don't need Goldman Sachs in the equation. You don't need.

Morgan Stanley, any of the other ones. JP Morgan, tokenization of the markets and asset backed tokens are going to be where it's at. We need a few more regulatory developments.

Just one thing I want to throw in there on that, that almost smacks of another financial innovation that will become a derivative. And as you, I know that many of you love my dopey kindergarten definitions of things I call a derivative. The thing about the thing.

A very academic definition by the way, folks. The thing about the thing. And could the token be the thing about the thing? You know, people talk about fiat money all the time, but stock is really a fiat instrument. It's, you know, the stock certificate that nobody even has a certificate anymore. Well, the token is now the certificate of the stock certificate. You know, it's just. I don't know.

Well, in theory at least. Now let's forget about how they're screwing around with naked short selling and creating more shares in float than the company actually has. Let's just assume all markets are honest in that case, good luck with that assumption. We'll just assume for the purposes of our discussion then you can use a security token and yes, it will be a derivative instrument effectively, but you can trade it on the blockchain. Other things I'm hearing about now, Sprott Global and several billion dollar Canadian entities along with the Royal Canadian Mint are going to, right now they're selling gold on the blockchain stored in the Royal Canadian Mint, audited quarterly, maybe even monthly. What they plan to do is in the future issue a security token so that you'll be able to own the gold just by having a token and transaction costs will go way down. As Rick Rule, head of Sprott Global likes to say, when your gold is on deposit with the Royal Canadian Mint, NATO is actually defending your gold for you. So when I was at the blockchain conference, I'm mentioning somebody, you know, we're getting these asset backed tokens and this guy goes, oh, we already have one. Our token is backed by cell phone minutes.

Unbelievable. There is no end the, and I'm doing air quotes here. Creativity that humans can come up with, it is mind boggling the creativity. There's a token about a token about a token and it's just, you know, it's a new derivatives market really. That's what I, I fear that it is. I mean, in a way, I don't know, you could argue that the blockchain makes things more direct, but it also makes them less direct at the same time. It's weird, you know.

Well, here's the thing, like for certain things like Ethereum and Bitcoin tokens, the blockchain has proven immutable and there's millions of nodes, maybe billions of nodes around the, around the world that are, that are replicating the ledger, the shared public ledger, so it's impossible to corrupt it. Now the thing is like when you can issue more tokens without hooking them into an asset, then you run the risk of what we've had in the United States before central banking, where banks would issue more notes than they had specie or gold in the vault and then you'd have inflation. But presumably on the blockchain here, when a new ounce gets added to the sprott, whatever they're calling it, an major corporations, it will be hooked into a thing on the blockchain and you'll be able to buy. It'll be one token per ounce and it'll be immutable. But until we've proven it, we don't know that for sure. But this is the biggest commitment in precious metals to the blockchain.

Well, you know what I've seen? I haven't talked about metals much lately because there hasn't been much to talk about. But I used to talk about gold a lot and I feared that my dear listeners were getting sick of that discussion. So I kind of, I'll get on a thing for a while. And then I'll kick the habit eventually. So if you come in in the middle of one of these things where I'm all, you know, like there's 26 episodes on one sort of theme I keep talking about. But then I eventually grow weary of it and I talk about something else. So stick with me. Yeah, gold, you know, interesting measuring stick. I always say about the precious metals. If you're going to, you know, listen, I'm not a gold bug. I'm not that much of a believer in precious metals. But if you're going to put your money there, take physical possession. If you don't take physical possession, all you've got is a fiat. It's the same thing Kerry was talking about a minute ago about the certificates for the gold. You know, gold became too onerous to carry it around, right? So then they took it, put it in a vault, gave a certificate, and all you have there is fiat money. That's all that is, you know, that you got to have the thing, not the thing about the thing. Because whenever there's a thing about a thing, there's some level of corruption in there. It always turns out that way. And speaking of corruption, maybe that's a good segue into Dodd Frank. Okay, Carrie, I didn't bring this up and say we should talk about Dodd Frank a little bit, but this is worthy. I mean we got a real estate investor audience here, right? And as you all know, I predicted that Dodd Frank would be under some major pressure under the Trump administration. Trump has talked about that fairly significantly. And it looks like Congress just approved a bill to dismantle parts of Dodd Frank. Significant parts. And Dodd Frank, of course, is this over correcting very long like 2200 page bill that nobody reads. And you know, ask Nancy Pelosi. You got to pass the bill to see what's in it. Stupidity. Right. And by the way, you know Nancy Pelosi, that idiot that she is, she was on talking about Ms. 13. Oh, she's a.

Be nice.

She's a frickin moron.

Age challenged. So shall we say?

I think she was intellectually challenged all her life.

She still thinks Bush is president. So give the lady, cut her some slack here. Maybe after Pence is elected she'll understand that Trump is now president.

God, folks, you can't make this stuff up. You can't write fiction this good. I mean it was just ridiculous. After Trump made that comment about the MS.13, the vile, violent, disgusting MS.13 gang being animals. The media just completely lied. The leftist media just completely lied. And misrepresented his remarks. I mean, it is shocking. You know, I think it was George Orwell that said, in an era of universal deception, telling the truth is a revolutionary act. Okay? And I. This is not a partisan statement. I'm not like sticking up for Trump. I'm just sticking up for the truth because the truth actually matters, okay? It is absurd, folks. You just can't consume the mainstream media anymore. It's pathetic. It's truly pathetic.

Hey, look, it's. This has been going on a long time. I think that just large segments of the population, Jason, have figured this out. And, you know, it's like that song they played at Trump rallies by Twisted Sister. We're not going to take it. And we just stopped taking it. Whether you call it red pilling, whether you call it awoke, whatever you want to call it, it's happening. And no wonder their audiences are dissolving into nothing.

But while you're talking about the left, Right, that's true now, but it. Oh, the media, the mainstream media. Yeah. Well, that's left also. I repeat myself, the left wing mainstream media. Yeah. The TASS News Agency. Right. Basically is what we've got. That's from Russia with Love, but that. Remember the Task News Agency, folks, You gotta watch some old movies and old TV shows, okay? And Pravda, the newspaper. And by the way, at our Venture alliance mastermind last weekend in New York City, I mentioned before that one of our speakers was David Mondras, who was a guest on the show. He gave a presentation about using the blockchain to prevent fake news. And that was just a fascinating presentation. I mean, I just love the discussions we have at the Venture Alliance. In fact, at this one, it was kind of an offbeat one because we really had a kind of a heated debate about property management and all that kind of stuff. It was quite interesting. You know, the Venture alliance is where things are kind of raw. And it just feels good that we can get in a room with really bright people and just hash this stuff out. And, you know, a lot of times we're not agreeing about stuff. You know, it's kind of an argument. And I think that's just super stimulating. I love it. I love it, love it, love it, I love it, I love it. Okay, so Dodd Frank. Carrie, what are your thoughts on Dodd Frank? Have you been following it?

I heard that Dodd got franked a lot when, when they were both in Congress.

Well, listen, I'll tell you something. This, this bill, the, the scariest thing about it is that, you know, the people running the Banking Committee had very little experience in banking. Now, in a way, I would almost say that's good, but no, yeah, that's.

Really bad because you got to understand the criminal nature of banking in order to understand how to fix it. And printing money out of thin air, fractional reserve banking, giving these people the franchise, look, whether it's one bank on a street corner or whether it's bank of America, they all do the same thing. They print money, they extend credit, and by virtue of extended credit, they actually create money from scratch out of nothing.

And then this is. Yeah, yeah. This subject is something that, you know, if you're new to the show, we've talked about this extensively over the last 1,006 episodes. But the concept of fractional reserve banking, or fractional reserve lending, it could be called either one, is how money is created out of thin air. By lending, money is lent into existence, which is a very odd, difficult thing to get your head around. I mean, and even experts, when I had Bill Bonner on the show, and Bill Bonner I think of as just super bright, my favorite financial writer. Now maybe he's just being, you know, false, false modesty, I don't know. But he was very gentlemanly on the show and he said, you know, after all these years, I can't even really get my head around it. It's such an obscure scam that it really is hard to get your head around it, isn't it?

Yeah. And that's the problem when you have idiots on these committees who are owned by the banks. The one thing that we all can agree on is that basically the whole system's corrupt. That's why it collapsed in 08 and that's why it's probably going to collapse again at some point. And nothing's been done to address that. But the Dodd Frank, what it did was consolidated the banks and gave them even more power, gave the too big to fail banks even more market share and made it impossible for the smaller banks to compete because they're so over regulated they can't afford it.

The regulatory burden is too big for small players. And as I've said many times before, this is why you have almost zero startup culture in the world of banking and Wall Street. Because I mean, think about how you have so much innovation in the markets in virtually everything in our life. Guess where you don't have innovation, you don't have it in the university system, in colleges. Right? Because there's tons of regulation in the accreditation scam. Okay? You don't have it in banking, you don't have it in Wall street, you don't have it in government because these are monopolies. They're monopolies that are protected.

Yeah, absolutely. And that's a big part of the problem. And the more regulated it is, it becomes like a public utility, Jason, and you have no innovation. And then it becomes a stranglehold for the industry. And the only way they can make money is by gobbling up smaller banks. So look, any improvement, any rollback of the regulation on community banks and smaller banks, credit unions is a plus. But it needs to go so much further and we need to totally revamp the system. Unfortunately, I think it's going to take another collapse.

Yeah, you know, a lot of this stuff, it just takes kind of a revolution. And that revolution might be just an economic collapse or whatever, but. So one of the things that's interesting here is you look at regulation and the discussion about regulation. So we talk often about how we want our clients to be investing in landlord friendly markets. And interestingly, the linear markets and the hybrid markets that we recommend for investors are generally pretty landlord friendly. Okay. Whereas the high risk markets, the cyclical markets, those are landlord unfriendly, they're tenant friendly. And listen, if we're going to be investing, we want to be investing in a place that is friendly to our cause as landlords. You know, there's an old saying, and this is, you know, if you teach your kids nothing about economics, teach them this supply and demand, they'll figure that out naturally, because that's so obvious, right? But here's something you can teach them. Money always goes where it's treated best. Money always goes where it's treated best. And you should put your money where it's treated best. It's not treated best on Wall street. It's, you know, that's an insider's game, obviously. And it's not treated best in the landlord unfriendly markets. Let me give you an example. The communists that run Seattle, the self loathing, suicide committing communist that, that, that run a place like Seattle. And listen, Seattle is only a poster child. This concept is certainly true in most of California, et cetera, right? They basically told mom and pop landlords, and by the way, one of our listeners, Christina, sent me this article that criminals have to be accepted in your properties. You can't discriminate. Now this is what they want to be the new protected class, right? So you, you know, look at protected class should be based on immutable characteristics. Okay? So race is an immutable characteristic. Gender is an immutable characteristic. Conceivably, gender choice is an immutable characteristic. Okay, now religion is not an immutable characteristic. That's a belief system. Right? But anyway, that's a protected class, right? Family composition is an immutable characteristic. At least at any given moment it is. Now, you know, look at like I'm single, right? Someone and I don't have kids and someone could say they want to discriminate against me because they only want to rent to married people, for example, right? Remember that scene in the, the movie the Firm where, where, where they said the firm likes married employees. Right? I guess because they have more obligations, they're not likely to quit their job as easily. Right. But family status is an immutable characteristic at a time. Now, certainly I could change that and become married. In fact, I'm looking if you know any possible candidates. I would like to get married. I'll just say that. Now, Carrie, you've been married three times, right? You're not recommending this idea.

I say if you escape to by this point in your life, why putting.

Them on the spot?

You know, why. Why ruin a good thing?

Okay, there you go. Well, you already had your kids and did your thing, so you know.

Exactly.

I want to, I want to, I want to try my hand at that.

All right, well, more power. I wish you the best. And just get a prenup.

Okay, There you go. All right, so Seattle. Now being a criminal, is that an immutable characteristic? I mean, think about it. If you're going to have a protected class, it should be on an immutable characteristic. Something you can't change.

Ms. 13. I think they're pretty immutable.

Yeah, right, right, right. So. So you got to rent your house in Seattle to Ms. 13, folks. This is the kind of stuff you face in landlord unfriendly environments. So it's not just about the rent to value ratio, the cash flow. It's about the regulatory climate. Is it friendly to our cause as landlords? So there you go. Hey. For more on this and a zillion other great subjects that all of you have enjoyed and I know all of you have asked for this and guess what? It's here. It's here. You can go to hartmaneducation.com that's hartmaneducation.com and it is now available the professionally edited Meet the Masters of Income Property audio files. Okay, we intentionally did not offer the video because we know as podcast listeners, you like yours truly here. You like audio files. Because they're portable. And guess what? That's what you've got. And they are available at a special price. @hartmaneducation.com you can get the Meet the Masters audio files. It includes everything with one exception. It does not include Ron Paul. Okay. Because of course, we hired Ron Paul to come and speak. He was great. But we do not have the publishing, the reproduction rights for Ron Paul. So it's got everything else. It was awesome. You'll hear John Burns, you'll hear just all of the other great speakers. You'll. You'll hear me, you'll hear everybody. And it's. It's super good, so. Super good. How's that for a convincing thing to say? It's super good. So. Hartmanneducation.com check those out. And also, do not take a tropical vacation because you're going on vacation with us. We're about to come out with an announcement of a totally new two day conference that we're offering first week of November in a tropical paradise. So stay tuned on that and we're going to wrap it up. Hartmaneducation.com for the meet the Masters audio that is available now. We will look forward to talking with you on the next episode. Until then, happy investing and thanks for listening. And Cary, thanks for joining me.

Anytime, Jason, my pleasure.

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