1679: Real Home Prices in an Inflationary World, US Population Growth Slowing, What Demographics Are Telling Us

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 to episode 1679 and thank you for joining us today. So I've got good news and bad news. Yes, just like I, I had last week. Good news and bad news. I think I'll start with the bad news. So here it is. Here it is. As you know, for many years I have been saying that the one thing, well, there's actually more than one thing, but one main thing that could derail my plan, that could make this whole thing just not work. The whole philosophy on which I have taught you how to invest for so many years, what is that one thing? What is that one big thing? Yes, there are other things, I get it. But this is a biggie. That one big thing that could dis. Derail the plans, that could make it not work, that could really mess us up. Well, here it is. And this is the bad news. But I have a feeling the tree huggers will be very happy about this. And the people haters will be very happy about this. And the people who view people as a cost rather than as a resource, they will like this. But real estate investors, not so much. Not so much. This could derail the plan. But after the bad news, I've got some good news for you. Okay, here it is. I'm looking at an article from today. This morning I was reading demographers warning is coming to pass. US Population growth at second slowest year ever.

Ever.

The second slowest year of population growth ever. US Population growth has slowed to the lowest rate since the Great Depression. The Census Bureau said on Monday as Americans continued to march to the south and to the west and one time engines of growth, New York and California lost political influence altogether. I really don't know why they're bringing this up. That's sort of not that relevant. But we'll see. Altogether, the US population rose to 331 million and change. I won't read you the whole number. It's too complicated. 331 million. Nuff said. Last year, the census Bureau said a 7.4% increase over the previous decade. That was the second slowest rate ever. Experts say that paltry pace reflects a combination of an aging population, slowing immigration and the scars of the Great Recession more than a decade ago. Notice they did not mention feminism, the biggest population killer of all time. But I digress.

I tell you, they didn't mention all these cultural changes. They didn't mention the idea that the corporatocracy wants to keep people separated and single and if they're married, they want to destroy their marriages. And feminism was such a great deal for the corporatocracy. Think about it, folks. Before that whole movement came along, and there have been multiple waves of that movement, right before that came along, women were at home. And guess what the big corporations were thinking? They were thinking, gosh, if we could increase the workforce and get more people to apply for jobs, that would make the labor market much more competitive. And if the labor market's more competitive and there's a limited number of jobs, but we double the size of the applicant pool, guess what happens? We, big corporations can suppress wages. Yes. It's not about minimum wage laws, which are absolutely stupid. It's not about any of this stuff. It's simply about increasing the size of the labor pool and limiting the number of available jobs through automation. Downsizing.

Right?

Sizing re engineering the corporation, offshoring the jobs to China and India and the Philippines.

Right?

That's how you cut wages, folks. Okay? You have a limited number of jobs and you double the size of the labor pool. Now, next they'll probably be promoting the idea of child labor because hey, if we can get all those children working.

That would suppress wages even more. But we've got to make, particularly women, half the population. We've got to make them think that being a stay at home mom is a worthless ideal, that you are simply not enough if you're a domestic engineer, AKA housewife.

Right?

That is not enough. That is not good enough. That is really shameful. That's what the corporatocracy and the media, that is the corporatocracy, or an extension of it at least will tell you. Right? We want to double the size of the labor pool. And if we make everybody dissatisfied, if we keep pointing out all the reasons people should split up, break up, and never marry in the first place, then we can double the size of the consumption pool. I've explained that to you on many other prior episodes. Everybody needs two sofas, two beds, two toasters, two coffee makers. Two of everything instead of one of everything. If you're a consumer products company, you just doubled your marketplace. Let me see, you double the size of the market and you double the size of the labor force. What's going to happen? More consumer debt, more spending, more people struggling, more tax revenue, more sales tax and more income tax because you got twice the number of people working. But overall, suppressed wages. And just my personal opinion. An isolated, lonely population. Well, what can you do there? Hey, guess what? All those big pharma companies have a solution for you. They got a bunch of drugs to sell. All the depressed people, right? A bunch of drugs you probably shouldn't be taking, have massive side effects that are largely hidden. Folks, it's just a big scam. It's all a big scam. Everything's a scam. This is not a conspiracy theory. It's a conspiracy fact. Okay, let's read on. The Great Depression back in the 30s and the Great Recession in the 2000s. Those things tend to make people wary of the economic future. And if people don't have some degree of faith in the future, they're unlikely to procreate, they're unlikely to have kids. The overall numbers confirm. That was me, by the way, talking back to the article. The overall numbers confirm what? Demographers have long warned that the country's growth is stalling. Many had expected growth to come in even below the 1930s levels, given the long hangover of the Great Recession and the drying up of immigration, which came to a virtual halt during last year's.

Note.

Just note the way I said that. Right. William Frey, a demographer at the Brookings institution in Washington, D.C. warned that even a recovering economy may not change the trend. With the population aging rapidly and immigration contentious unlike the Great Depression, it's part of a process where we're likely to keep having slow growth. Frey said. Okay, that's the bad news because, hey, as real estate investors, we're kind of thinking like those big corporatocracy companies that want to increase their market share. We like more people to rent our properties, and then someday we like more people to buy those properties, increasing the size of the buyer market. And of course, we know supply is massively constricted, thanks to the the morons that run the various levels of government. And supply will probably be continued to be pretty restricted because Sleepy Joe isn't talking about any solution. For supply. All that moron is talking about. And don't you love it that you live in a country where you can say that, I don't know, I might get a knock at the door maybe. You can't say that. You certainly can't say it with a big corporatocracy that will censor you.

Right?

But anyway, for now, Sleepy Joe has no solution. He only wants to throw gasoline on the fire and make the problem worse with his absolutely idiotic ideas of this $15,000 tax credit and the 20 to $25,000 grants that are in the works. And we've talked about those. And by the way, if you're not listening to the YouTube channel and not catching the live streams, please, please add that to your list. Not just the podcast here, because really important stuff that sometimes there's some overlap, but a lot of that content is very different. And also, we're not just on YouTube, we're on all the other censorship free platforms like Bitchute and rumble and Odyssey, etc. Etc. So you can find us all over the place. So he wants to simply increase demand. There's no shortage of demand for housing. There is only a shortage of supply. How they cannot figure that out with all the brainiacs in Washington is beyond me. It's just totally beyond me. I don't get it. It doesn't make any sense. It just doesn't make any sense. So I told you the bad news. Now the good news.

Are you ready?

Harry Dent talks a lot about this, but it's something that all demographers talk about. The time lag. He talks about S curve and the way that looks on a chart, right? There's a time lag on this demographic time bomb. So the good news is, here's the good news. You don't have to worry about this now. Do not worry about this now. Worry about this in 20, 30 or 40 years, because that's when we will see this decline really hit. The housing market. It's a long ways away, folks. So for today, massive shortage, no demographic problem, lots of demand, short supply, you're good. But you'll start to see an inkling of this in about 20 years. You'll start to see more of it hit in 30 years and even more in 40 years. Now, the one wild card in that, where it may never become a substantial problem is if the life extension really kicks into where we see people living a lot longer. And we are on the verge of some pretty big breakthroughs on that. Of course, Bill Gates would love to Prevent all that because he hates people. He doesn't want to see a lot of people. People are bad. People are the problem. That's the mantra. And by the way, read that great book that I recommended before. It's called the Bet. The Bet. And it's about the two opposing views of population and the environment. Very, very interesting book. It's entitled the Bet. Check it out. You'll like it. All right. All right, let's go to the continuation of our live segment from Monday's episode. And if you need us, reach out 1-800-hartman in the USA or worldwide. Jason hartman.com and here is part two of the live presentation.

Now, I gotta tee this video up. This video is about 14, 15 years old, and it is Peter Schiff. How many of you know Peter Schiff? Okay, Peter Schiff. I had him on my show many years ago. He's a super interesting, highly intelligent person. I call him the master of the zinger. Soundbite. He just zings them. You know, the sound bites are great with Peter Schiff, but I wouldn't recommend investing with him because he's, like, just so wrong so often. But he's not wrong about this, okay? There are subtleties to things you got to think about, right? He's not wrong in this video. And he's having this debate with a guy named Harvey Hirshhorn from Bank of America, an economist for bank of America. And Schiff just slaughters him, okay? Like he usually does. He's a very good debater. But I want you to notice how the mainstream media, on CNBC or anywhere marginalizes Peter Schiff. Even though he's right about this issue, he's right about it, okay? And I want you to also notice in this video one of the manipulation methods that I talked about earlier. Remember I said the way they hide and suppress the real inflation numbers are weighting, substitution and hedonic indexing. You're going to hear an example in this video that Harvey Hirshhorn makes about hedonic indexing when he talks about the power of a processor. So let's listen in. This is a really good video.

So the economy slows, but stocks hold up. What's going on here? We're speaking with Harvey Hirshhorn, portfolio strategist, bank of America. And my personal favorite, Peter Schiff, president of Bureau Pacific Capital and author of Crash Proof out of March of Police.

Coming Economic Collapse Margins.

If you're feeling a little blue, Peter's here to push you over the edge. All right, gentlemen. Peter, I'll start with you. You know I'm kidding, but I'll start with you. Peter. What? What's the latest doom and gloom?

Well, you know, everybody is celebrating the record high in the Dow, 13,000.

Yeah.

You know, the problem is the price of everything else is rising a lot faster. You know, these records are the result of inflation, not legitimate growth. If you take a look at the Dow price gift in euros, for example, it's down 30% since 2000. If you price it in wheat or corn, it's down 40%. Price it in gold, it's down 50%. Price it in oil, it's down 70%. Price in copper, it's down 80%.

Peter.

Price in uranium, it's down 90%.

Hey, Peter.

Yeah.

Here's the thing. It's priced in dollars and always has been and always will be.

No, but who cares if you have more dollars if the dollar buys less? I mean, think about what the Dow is Worth in 2000. And think about the big increases in the cost of health care and the cost of education and the cost of insurance. And compare that with a puny increase in the value of the Dow.

That's always been true.

Well, yes, well, stocks have been a bad investment just, you know, just for inflation. You know, back in 19 time, back in 1929, the Dow was worth 19 ounces of gold. It's still only worth 19 ounces of gold. The returns have been dividends.

That's it.

The appreciation is an illusion created by inflation.

Harvey, help me out here.

Well, the markets, when you measure them from any kind of a historical peak, you're always going to get some aberrations in the comparative analysis. So I take all that with a grain of salt. You know, the stock market in terms of the power of a processor is up quite a bit given the increase in quality of processors. So play that game every way you can.

Let me ask you something, Harvey, and Peter didn't meant. Well, he kind of. He kind of came at it from a tangent, but he didn't directly mention this. You know, we've been watching these earnings reports come in and it's clear that some of the strength is due to the weakness of the dollar. The companies are benefiting from the translation of the currencies. Now, in the old days that would have been backed up, but I don't hear anybody doing that anymore. Are we getting sloppy about this or what?

You know, some of it, some of it is coming through. And in the past, especially in the pharmaceutical area was, it was a question mark. But we are Seeing greater globalization of US companies. It's a 50% or more of the profitability and revenues of a lot of the companies.

But shouldn't we would like foreign stocks.

For their, for the weakness in the dollar there you can still get the same benefit.

There's something we agree on. The place to be is abroad, the place to invest is foreign stocks. But you know, because US Companies are having their earnings, you know, buoyed by a weak dollar. I mean there's nothing good about that. All they're doing is earning more dollars that translate into fewer euros or fewer, you know, Swiss francs or Australian dollars. We're just putting, putting our goods on sale so we're selling more of them, but we're getting less in return. But you know, the dollar is in danger of major collapse. Here we are, we're as, we're right above major long term 30 year support. And I think if we crack through these levels several weeks now, what we saw a couple of months ago in February with a 500 point drop in the Dow, that's just a warm up. The main event could be coming. We could have a much, much bigger down day if the dollar breaks down. And I think you can certainly take the bond market with it and watch for that.

Okay, now the dollar is, is weak on one level, but on the other level it's really not weak. It's actually the strength in the foreign currencies. The foreign economies are doing better.

We'll talk about the glasses half full, gentlemen.

I'm sorry. We are out of time and time waits for no man. Harvey Hirschhorn, thank you very much.

Court Hear the whole thing at the end.

How they march. Peter Schiff, President, Euro Pacific Capital and Liz, say something to cheer me up. Peter always just bums me out.

Mark, I was being spoken to just as you said what you just said.

I was saying that after Peter's somewhat gloomy outlook, we could use the ray of sunshine here.

Well, yeah, even false hope would do. I got to tell you, we get a lot of email from people to say, I want to hear more from that guy. I know.

You know he's got a following the Interestingly enough, over the course of time the predictors of disaster have always sold more books than the people who predict good news, even though the disaster predictors have been wrong.

Hey, somebody's making money out there anyway. Isn't that interesting how they just totally marginalize him and. Yeah, or 2007, I think.

Yeah.

Of course Peter was wrong about his prediction that he's been wrong about forever about the dollar collapsing and all this stuff. And the problem with a lot of these doom and gloomers is they just do the math and the math isn't enough. They gotta also consider that the US has the biggest military the world has ever known and the ability to maintain the reserve currency status with that military. You know, love it or hate it, at the end of the day, everything comes down to force. That's vile. I know, it's barbaric, but it's the way of the world. It's just history and sadly, future. You know, the U.S. also, one thing that's not considered very much in terms of a US asset is, is the US has the biggest brand in the world. The earlier speaker that talked about how Apple's the biggest brand. No, America's the biggest brand. America is the brand that almost not everybody, but almost everybody in the world wants to live under. It's a great brand, there's no question about it. And it has the reserve currency of the world and the military to keep that reserve currency status for a long, long time. That's why they can kind of defy gravity with all of this spending. They can kick the can down the road forever. And that's why Peter Schiff is just like always wrong about the end of the world or the end of the dollar at least. And there are many others like him. He's not the only one.

Okay, so this is a chart about.

Something that really happened to millions of people. This is not an abstract theory. It's not some esoteric thing way out.

There in the ether.

This is reality. And what this chart shows us is someone buying the median price home in 1972 and living in it. Now, if this were a rental property, it would be dramatically better. Don't worry about all the numbers. I'm not going to bore you with them. We're just going to fast forward through them. It'll be totally relatable.

Up at the top in the green.

The median house price in 1972 was $18,000. And change the mortgage amount if you got an 80% loan was was about 14,600. The interest rate back in 1972 on a 30 year fixed rate mortgage was 7.37%.

Are you grateful?

Rates are so low now. You know who did that? Your rich uncle, Jerome Powell, chairman of the Federal Reserve. Take advantage of it, okay?

I don't agree with what he's doing necessarily.

I'm just saying take advantage of it.

That's it.

So in 1972, how much was a dollar worth?

A Dollar.

Exactly right. Thank you. Yes, a dollar was worth a dollar in 1972. But let's fast forward 12 years.

12 years.

A friend of mine was born in 1984 and George Orwell wrote a book about 1984. So in 1984, when you go down here, the 1972 dollar here was worth a dollar. Here it's worth 40 cents. So the dollar depreciated in value because of inflation. It became less valuable. So this person that bought this house, these millions of people that bought this house, this example house, they were paying $101 per month. That was their mortgage payment. But 12 years later, the real mortgage payment, even though the check was still $101, the value of that check was only $41. This is inflation induced debt destruction happening right here. Now let's fast forward to the end. We won't go through all the numbers. By 2001, they lived in that house for three decades. Three decades they lived there. And they did not rent it out. If they rented it out, it would have been dramatically better than this. But this is good enough because it's impressive. Remember, they got a mortgage for 14,600. They paid interest in terms of nominal dollars. The name of the dollars in name only, not the real dollars, not the real value, just in name only of 36,318, but the real dollars. After inflation debased, the value of them was only 16,393. Well, they borrowed 14,000, so they're about $2,000 more that they paid now. But remember that interest is tax deductible. So by the time they had inflation pay part of their debt and they had a tax benefit, their inflation adjusted and tax adjusted dollars means that they borrowed 14,614, but they only repaid 12,655. That's magic. That's magic. So they thought they borrowed at 7.37%, but after inflation their rate was 1.06%. And after inflation and tax benefits, their rate was negative 1.16%. They got paid to borrow that money. They lived in that house for three decades for free. No, it wasn't free. They got paid to live there for three decades. That is a miracle. Isn't that awesome?

Now imagine. Yeah. Clap.

Okay.

It's good.

I invented inflation.

That was John Maynard Keynes probably, who did that, actually. But this is incredible. Now imagine if they didn't make any of those mortgage payments. If they put a renter in there and a renter made those mortgage payments. If we did the math on that. You wouldn't even believe it. It's so good. It's just incredible. This is why income property is the most historically proven asset class in the entire world. And now when we have negative interest rates after income, inflation and taxes, people are getting paid to borrow. Today, if you bought a bunch of houses, put 30 year fixed rate mortgage notes on them and kept them vacant, you would probably make a lot of money. But you're going to rent them out and you're going to make a lot more with that. That is inflation induced debt destruction. You get paid to borrow the money in the interest of time. Let me wrap this up. I just want to share with you a quick, very inspiring poem that has inspired me for many years. And this is an amazing, amazing thing. So this is something that we can get you a copy of. And here's what I want you to understand. First of all, you should put it on your bathroom mirror and read it every day because it is just incredible. It was written in 1977. 1977 is the perspective of the author who wrote this great poem called the Reluctant Investor's Lament. His name is Donald Weil. He has passed on. But a client of ours gave me a book with a whole bunch of his poems and sayings and they're just great. But this is, I think, the best one. Again written in 1977. He was a real estate broker in New York and an investor. And here's what he he was thinking and what he wrote. He said, I hesitate to make a list of all the countless deals I've missed Bonanzas that were in my grip I watched them through my fingers slip the windfalls which I should have bought were lost Because I overthought I thought of this, I thought of that I could have sworn I smelled a rat and while I thought things over twice Another grabbed them at the price it seems I always hesitate and then make up my mind when it's much too late A very cautious man am I and that is why I never buy When Tucson was cheap desert land I.

Could have had a heap of sand.

When Phoenix was the place to buy I thought the climate was much too dry Invest in Dallas, that's the spot. But my sixth sense warned me I should not the golden chances I have been are lost and will not come again Today I cannot be enticed for in 1977 everything is so overpriced.

One second. He's not done yet, but that's pretty good right there. I added the 1977. That's, you know, little, little, little poetic license here. I added that to his poem. The deals of yesteryear are deep dead the market's soft and so's my head and at times a teardrop drowns my eye for the deals I had but did not buy. And now life's saddest words I pen. If only, if only I'd invested back then. Don't be the reluctant investor. Thank you very much.

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