1816: Economic Boom or Bust? Dr. Vikram Mansharamani Part One

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You know, Jason, I've been following you for a long time. Ten years ago is when I first saw your course and I've been investing, gone to several Meet the Masters. And man, I'm telling you, the way that things have played out are way better than you projected. For me personally, obviously it's been, you know, a good six years, but now I'm ready to kick it into high gear. As you know, I want to really build a portfolio that's, you know, four or five times what I have already. My wife and I have 12 properties and I really appreciate the opportunity to talk here.

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Welcome to episode 1816. 1816. And thank you for joining us today. So we have talked a lot about the terrible stuff that is going on in Ukraine and we're going to go off that topic today. We're going to discuss something called boombustology. And I had the pleasure of interviewing the author of the book Boombustology Spotting Financial Bubbles Before They Burst back in December. And that episode, that show got preempted and so we are going to run that today. And this is a fantastic interview. You're absolutely going to love it. Dr. Vikram Mancharmani is also the author of Think for Yourself. Good lesson for today, huh? Restoring common sense in an age of experts and artificial intelligence. So that's what we're going to do today. We're going to talk about that. I just got back from a red eye flight from Scottsdale, Arizona, flew back this morning and gosh, those are tough, those overnight flights, I do not like them. But sometimes you just don't want to lose a day. You know, you want, you want to get to work, stuff to do. So here I am with about one third of the normal energy, but fueled by coffee. Yes, fueled by coffee. And wow. I gotta tell you something. Isn't it absolutely shocking what is going on with fuel prices? Speaking of fuel, you know, a friend of mine sent a picture from Los Angeles just last week showing gasoline prices over. Ready for this? Over $9 a gallon. $9 more than $9 a gallon. It's absolutely shocking. And I was with my designer in Scottsdale and she was driving in her car and she needed gas. So we went to one gas station in Scottsdale, Arizona, where it's only five bucks a gallon. What a bargain. Yet they were out of gas. They had no gasoline at any price. Closed. The convenience store was open, they had diesel, but no gasoline. Then we went to a second gas station, same exact problem, no gasoline at all. We went to a third gas station. Luckily gasoline, but $5 a gallon nonetheless. So it's absolutely crazy. And you know, one of my friends posted last week on Facebook or Meta, the company is trying to get rid of its terrible reputation. Oh, these big tech companies just abusing the world, abusing humanity. That's what they do. And he posted, you know, why are all my multi millionaire friends complaining about gas prices? Why are they posting about this stuff? Well, my response was it really matters. First of all, let's not just care about ourselves. I mean, look, gasoline prices, it doesn't matter to me. I got lots of money, I can afford it. And plus I don't even drive, I hardly drive at all. So sometimes I wonder why I even need a car. But it is in the cost of everything. And you've noticed it, you've seen the massive inflation going on. And by the way, we're here to help you out with that. Not just with advice, but with a gift. So I'm going to announce that in a minute because we've got two winners from our raffle for last week and we're going to do that again this week. So we're going to have more winners and we'll announce those next week. But anyway, the cost of energy is in every single thing we buy, whether it be a product or a service. We're always paying for energy. Energy is the fundamental base of the economy and it also, of course, is in the cost of our, our houses, our rental properties that we buy. It's in the cost of construction. It's hugely, hugely significant. So gasoline prices are just an indicator, a proxy for the overall energy complex. And it is vitally important. It's, it's one way we all stay conscious of what is going on behind the scenes. And you know me, I've taught you over the years about packaged commodities investing or assembled commodities investing, two of my trademark terms. And how when we buy a property, we're really not buying a property. Like one thing, we're buying two things. We're buying the land and we're buying the improvement. The house, the apartment complex, the whatever sitting on that land. And that improvement, of course, is made up of commodities. Commodities that have intrinsic value, that are not attached to any one currency and that are traded globally and needed by all humans universally, vitally important things. So I'm really a commodities guy. And, you know, I. I look at the stock market, of course, and stocks are not a hard asset. They are a fiat asset. They are a proxy type of asset. And there's all kinds of finagling and scams in the stock market. We know about that, certainly in the commodities market, too. Hey, let's not forget John Corzine. And this is why you should never solely hang your hat on anybody's resume. Because if you looked at the resume of John Corzine, former governor of New Jersey, and then MF Global scandal, right? Some. A lot of people lost a ton of money. And then, of course, Bernie Madoff, if you looked at his resume, you would think, wow, former president of nasdaq, you know, headed up a whole bunch of ethics committees for the financial sector and FINRA and so forth. I don't know, finra, nasdaq, whatever. Anyway, Bernie Madoff had an awesome resume, turned out to be a complete scam artist. John Corzine, same idea. And lots and lots of examples of this, right? You could look at Dennis Kozlowski. You could look at Enron, WorldCom, you know, Kenneth Lay, Jeff Skilling, Remember all these guys, right? They went to the best schools. They knew all the right people. They were connected. They had great resumes. They were super smart. In fact, there's a great movie about Enron that I saw years ago. You should watch it. It's called the Smartest Guys in the Room. And they were obviously all a bunch of criminals, right? So don't hang your hat on a resume ever, right? It's important. It means something, but it doesn't mean everything. Anyway, where was I going with that? Oh, Commodities versus stocks. And that's why I like commodities so much, because commodities are real. They're needed by everybody, and they are the ingredients of the properties in which we invest. They are traded globally. They are needed universally, and they are not attached to any one Currency. And they are rarely a proxy type of asset. Now, maybe I just made that up. This proxy asset concept, that might be a new one. I don't think I've heard that anywhere before. I just thought of it as I was talking to you right now. But if you think about it, stocks are largely a derivative, right? Because they're a derivative of an idea. I don't mean a derivative in the sense of the derivatives market, but they are a derivative nonetheless. I mean, you know, they're a derivative of an idea of a bunch of financial engineering, of a bunch of promotion and roadshows and investment bankers and a bunch of news. You know, there's this whole Wall street industrial news complex. Cnbc, the Wall Street Journal, Investors Business Daily, Morningstar, Moody's just a giant, giant industry that is basically geared toward promoting these derivatives, these proxies. And that's really what a stock is, in my opinion. It's a proxy. Whereas a commodity, although that's manipulated, too, no question about it. But if it's lumber or steel or any of the ingredients of the properties we buy, right? That is more solid. Yes, I know. It's also manipulated. Futures contracts, speculation, oil. You know, I get it, I get it, I get it. But I just don't think as much. If I have to hang my hat on something, I'm going to lean on hanging it on commodities more than stocks. Okay, just. Just a thought there. Okay. Before we get to our interview, and you're going to love this interview, Vikram Mancharmani, great guy, great interview. Author of Boom, Bustology, and Think for yourself. You're going to learn how to spot financial bubbles. And don't forget to think about NFTs and crypto and Meta and all of this stuff. In fact, one of my friends sent me a message this morning, and this guy is so smart. His name is Brad Mills. He's out there. He's very well known in the crypto world. You know, you can follow him on, you know, podcast, Twitter, etc. Right. Anyway, Brad sent me a message and he was talking about the Great Reset. And of course, you know the famous line for the Great Reset, right? Klaus Schwab said, you'll own nothing and you'll be happy. No, thanks, Klaus. I'm not into it. I don't agree. I don't like that idea whatsoever. And what he means is he and the other global elites will own everything and we'll rent everything. Now, look, on balance, I do want to say, like I've said before, maybe that comment was somewhat Innocent. Maybe it was just referring to the sharing economy. But we all need to own our own assets. I mean, private property rights are the foundation of civilized society. Without private property rights, you have nothing. If the government can take your property, whether it be Russian oligarchs. And look, emotionally, I agree with that. I'm glad they did it. Seize Putin's assets. Seize the oligarchs assets. So hopefully they'll put pressure on Putin. But, you know, that's a dangerous, dangerous precedent. It really is. And we've done shows before on civil forfeiture. Really scary stuff, folks. Really, really scary stuff. So we've got to be ever vigilant about private property rights, because without private property rights, we have chaos, we have tyranny, and we have a disaster. We've seen that throughout history, how collectivism does not work. It is responsible for the deaths of close to, if not more than 200 million people. Absolute disaster. And remember, socialism is just the little brother of communism. And throughout history and throughout any geography on earth or any time in history, these things have never worked. And they will never work because they are anathema to human nature. Human nature does not support any kind of Marxist ideology. Only the elites. The coin ascente the inner circle. They profit from it, but it's greed and profit nonetheless. Okay, now on the flip side of that, there are a lot of things broken about our current state of affairs and crony capitalism, no question about it. So we will have to continue to be at war with these ideas and, and be vigilant about them. But speaking of money, I want to thank all of you who have been commenting on our YouTube channel and writing reviews on Apple podcast. And we need to announce two winners from last week. Now, these are random, okay, totally random winners. So your comment could be great or it could be terrible. And you could still win either way, right? Doesn't matter. So our winner for the YouTube comments for a 50Amazon gift certificate, by the way, reach out to us@jason hartman.com Ask and you have 30 days to claim your prize. If you try to claim it in 31 days, you're not getting it, folks. You got 30 days to claim your prize. Jason hartman.com ask just go there and say, hey, I won the contest. Send me my gift certificate. Send me my gift card and we'll do it. Okay? So multi bond not 007 quadruple 07. Multi bond, quadruple 07 is the winner of the YouTube comment contest or not contest, but raffle. This is chosen at random. And his comment just happened to be, I'm sure it was about Ukraine, Russia, obviously. He said Putin is just trying to protect its border from NATO and now they join force with China. So it's going to get hard for the US and USA inflation coming at 10% per year. Look, I don't disagree with you. Can you imagine the back room discussions that go on between Biden and Putin? Or, you know, who knows? Just who knows? I mean, the timing of that invasion is very odd and very scary. You know, make sure you see the movie. Make sure you watch the old movie Wag the Dog. You must watch the movie Wag the Dog. Okay, that movie's maybe 25 years old now and it couldn't be more true. All right, so multi bond quadruple 07. Claim your prize@jasonhartman.com ask. And before we get to our review or our show today, our guest today, Vikram Manchermani, Boom Bustology. We got one more winner and that is for the Apple podcast or formerly itunes reviews. And that is, and I don't know if I'm saying this right, our link Stevenson. Our link Stevenson, yeah. Anyway, from somewhere in the United States said, great show. Jason is consistently great in his message and approach. Keep it up, sir. Okay. Thank you for the nice review and claim your 50Amazon gift card at Jason hartman.com ask. And now, without further ado, let's hear from Vikram and let's talk about Boom Bustology. It is my pleasure to welcome Vikram Mancharmani. I enjoyed his book on Boom Bustology. That's the name of the book. That's one word, by the way. Boom Bustology. It's really an honor to have him here. I just finished the book a couple of weeks ago and as I was going through it, I just had so many questions. So he's coming to us today from New Hampshire and it's good to have you, Vicar Morcom.

Thanks for having me, Jason. I'm thrilled to be with you.

Well, likewise. So spotting bubbles in markets, regardless of what type of market they are, stocks, real estate, cryptocurrency, precious metals, tulips, whatever you want. Right. There are certain lenses which one can look through to kind of help filter understanding whether or not you're in a bubbly territory. And you say it's not binary. Right. It's not like either you're in a bubble or you're not. It's not that exacting, I guess.

Sure. Well, I guess the key message, I would say, is that it's probabilistic. There's uncertainty around it right. You can't call a bubble with precision at the exact time, or at least I don't have that skill. And I don't think there are many people who do. And so you're right, Jason. What I've hinted at and I talk about in my book is that every lens is biased and incomplete and therefore limited. And so what we want to do is if we think each lens is probabilistically pointing us in the direction you almost want to think about, as put one lens in, what do I see? Oh, it looks bubbly. Another lens bubbly. A third lens bubbly. A fourth lens bubbly. A fifth lens. Well, if you see all of your lenses pointing towards bubble dynamics underway, well then you can have greater confidence that the risk is to the downside, not to the upside. And likewise, if you only see one or two of these lenses saying, hey, caution, you might have more confidence to stay invested and say, you know what, maybe this is actually the more profitable point of a bubble where it's just starting. And so that's how I think about it.

That's good. And are there a total of five different lenses?

Yeah. So. Well, I wrote about five in Boom Bustology. And the reason was because the publisher wanted a nice round number. And so that was it. The reality is I'm a big believer and fan of the more the merrier. So the five I talk about in the book are, number one, price action. You know, normal supply and demand dynamics that all of us Learned in Economics 101 are that when prices rise, you expect supply to show up, not demand. But in fact, if you have higher prices driving more demand, which in fact drives higher prices, which drives more demand, you've got a self fulfilling bubbly dynamic underway. Doesn't mean you have a bubble, just means you have a bubbly dynamic. So that's lens one, which is price action inspired through microeconomics. Lens two is really about macroeconomics or credit conditions. And this has to do with whether the price of money is appropriate. And so if the price of money is too cheap, rarely, I think, has it ever been too expensive. And so if the cost of money is low, well, then people will use it more frequently or in greater volume than they otherwise should. And as a result of that, you get misallocated capital. And so that is a sign of some real concern because if people are free with capital, they're not appropriately weighting risk, then they end up perhaps being a little less disciplined in their capital allocation processes. Lens 3 is psychology, and that has to do really with some of the behavioral aspects. This sort of fear of missing out the new, new thing that's going to change the world. It's different this time. There's lots of ways to describe this dynamic, but that's really a psychology inspired lens lends for is politics and sort of regulatory dynamics. And this is where you have subsidies, tariffs, other sort of floors or ceilings on prices and dynamics like that that shift supply and demand, perhaps artificially change to tax policy where people go sprinting to go buy, let's just say for instance, electric vehicles or let's just say SUVs that are more than £6,000 or et cetera. So you can get a couple of dynamics at work because of tax inspired or regulatory or inspired dynamics that change the supply and demand dynamic.

The government is famous for distorting markets.

You got it. That's right. And the last one, just really quickly to wrap up here, the fifth lens is really about herd behavior. You know, when popular sentiment shifts onto a topic, it's generally getting quote unquote long in the tooth, the phenomenon. So if your bell boys talking about you go to a hotel and you check in and the bellboy is talking about flipping condos, you know what, probably not a great time to get involved with the condo market. Or when your taxicab drivers are talking about the latest cryptocurrency or coin that they bought and they just made a million bucks on it. Well, you know, probably too late. The phenomenon has spread too widely. There's fewer people to quote, unquote infect and there's less fuel to pour on the fire. So those are the five lenses.

Very interesting. So you qualified that when I asked the question saying that you wrote about five in boom bustology. Are there more?

They're sure. I mean, for instance, a cultural dynamic I think comes into play. You know, societies that are more consensus oriented. And by the way, this was really on full display in Japan.

Yeah, I was going to say Japan. That's exactly what I was.

Census oriented society. Right. I mean, it's a harmonious group dynamic, Confucian culture, if you will. Right. And so all of that logic suggests, you know, outlying individual thought is maybe not respected by that society. And so surprise, surprise, consensus rapidly formed that the thing can only, the markets can only go up. And so everyone got. And then you get these weird dynamics where, I don't know, I forget what it was, was, you know, some portion of the emperor's grounds were worth more than California or something like that.

Right. I remember that one really Weird dynamics.

Emerge because of that consensus, herd behavior. So then I would say there's some cultural elements there. Yeah. My guess is there's others that we can come up with and talk about. But the idea is all of us can be commonsensical about it and sort of say, hey, does this make sense if everyone's on one side of a boat, it's going to tip.

Yeah, exactly. Exactly. And, you know, you can see that consensus dynamic go on in committees all the time. And this is why the world cannot be run by committees. The world needs to be run by leaders. And yeah, that's definitely true. I've noticed that many times. So the million dollar question, everybody wants to know the answer from Vikram. Are we in a bubble?

It's a great question.

Maybe by asset class, precious metals, real estate, cryptocurrencies, and maybe even those, you gotta separate them, you know, like Bitcoin. And then everything else, stocks, commodities, everything. I mean, the thing that's tricky now, that is we've got these supply chain problems that are sort of distorting markets as well. When you have this kind of supply demand shock issue, you can't tell if that's real limited supply or it's supply chain or the demand is really that high, or people just want it now because they want it now rather than waiting. Right. So it's hard to interpret that a little bit.

Yeah. So you just asked, I think, 12 questions.

Of course, I am the king of the compound question over here.

So, Jason, I think you asked about inflation, deflation, and insofar as that affects supply demand, you asked about sort of, I think, seven or eight different asset classes. And about generically, are we in a bubble? So let me begin by suggesting that.

A long answer.

I'm going to give you a long answer. So let me begin by suggesting that all of us as investors are 100% certain to be making mistakes. All of us will make mistakes. However, I want to suggest that we can choose what type of mistake we can make and the type of mistakes we can make. We can either make the mistake of commission or a mistake of omission. And the commission is we do something, we make an error of commission, which is we do something we shouldn't have done. And the error of omission is we did. Didn't do something perhaps we should have done. And those are the two primary types of mistakes we can make as investors. And as a result of framing it this way, what I want to suggest is that when the risks are elevated, let's choose to make the error of omission. Let's miss the next 5, 10, 15% upside, but not capture the 20 or 30% downside that might follow it. Whereas at certain points in the cycle, you may feel like things are so depressed they can't go much down, and you might go ahead and get involved in an asset class and the error of commission may be better to make because yes, you may lose 5 or 10%, but you'll capture the next upside of 100% or 150%. And so I would frame it in that way, which is there are times of elevated risk where we're going to choose to make the error of omission. We're going to miss the last bit of gains, and there are times of elevated depression or despair where no one wants to own anything. And yes, they may continue to fall further, but we should make the error of commission at that point in time. With that framing, let's go ahead and talk a little bit about the different asset classes you raised to see whether or not they're sustainably rising, whether they're likely to fall or what have you. And so the way I think about many nominally priced assets is we have to look at effectively real interest rates. And so the way I think about that is you look at inflation and you compare it to interest rates. Well, today, depending upon which measure of inflation you choose to use, you may have a 5, 6, 7% number running and interest rates are below that. So, Jason, it would be absolutely illogical for anyone who believes this to be the sustainable situation not to borrow as much as possible and deploy it into nominally priced assets, whether they're stocks, whether they're real estate, whether it doesn't matter. Deploy as much money and leverage as you can get. Go forth and do it. Now, of course, none of us believe it's going to stay this way. And herein lies the delta of opinion that results in some variability of perception. Right, which is, okay, well, the inflation's only temporary, it's transitory or whatever the word may be. Right, it's temporary, it's going to pass. Maybe, maybe not. We can talk about that. But the interest rates are the other side of that equation. Are they going to rise? Well, regulators have hinted that maybe they do need to rise, that maybe there is in fact upside pressure on the cost of money. And that of course, changes the dynamic on a lot of different assets. So theoretically, that's how I would frame the questions you've had around the different asset classes. Now, I'm happy to let you ramble through each asset class. And I'll give you my quick thoughts on them if that's helpful from here.

Okay. Metals. Precious metals, yeah.

So precious metals I believe specifically are monetary equivalents. So I don't even think of them as assets, I think of them as sort of anti assets. So what's your faith in fiat currency? If you believe central bankers will continue to print and there'll be monetary debasement, continued, structural, politically motivated, well then every dollar you have in your pocket will likely be worth less than purchasing power over time. We've seen this over time. This is what happens to fiat currencies as a result. I want currencies that can't be printed. And if we think of precious metals as a currency, and you can debate how you deploy that, how you purchase precious metals, are you buying a mining company which has operating risk or leverage and idiosyncratic risk per asset? Are you buying the actual metal and you're going to hold it physically? Are you going to hold it in an ETF that has some counterparty risk and some other. There are different ways and we can get into the nuances of those if you want to. But generically speaking, I think if you believe in prudent central banking and that central bankers and political motivations will not infect monetary policy, then precious metals, you might say, have very little role. However, if you think political manipulation, monetary debasement and these trends are likely to continue, I personally do think so. Well then you have to think about precious metals as one divided by your confidence in central banking. And if you think low confidence that they'll continue, low confidence that they'll be thoughtful and sort of think about their long term debasement impact, well then you'd have higher confidence in the long term value of precious metals or non printable currencies. So that's how I think about that.

Good points. And sadly, with every asset and every political issue nowadays, everybody's thinking just for their tenure in their term. So Jerome Powell and Biden, if he's thinking at all.

No, listen, Jeremy Grantham, a dear friend of mine here in the Boston area and someone who's been a mentor and has guided me a lot in some of my thinking around Bubbles and endorsed the books I've written, et cetera. He talks about career risk and the investment professional is driving unbelievably unsound decision making. He talks about in 1999, running around to a bottle, bunch of professional money managers, hundreds of them around the country, around the world and saying how many of you Think we're in a bubble that will burst and virtually every hand goes up in the audience. How many of you have decided to act on it by removing exposure to equity markets? No one raises their hands because the risk of going out of consensus is too high during that little one year window you're getting measured against for your job, that you can't take that risk. And so professionals tend to focus on their careers rather than on the actual long term investment performance.

Yeah, well, that one doesn't surprise me a whole bunch, but sadly it doesn't. It should. Yeah, very interesting. Okay, so the next one is really loaded, but so many of my listeners are real estate investors, as am I. That's my favorite asset class. But an ounce of gold is an ounce of gold. Around the world, a piece of real estate is very different and fragmented into so many different types of markets. And just to maybe help you think about this, what we do is we analyze them and divide them into three major categories. Linear markets that are kind of slow and steady and boring that chug along and appreciate without giving a lot back during recessionary times, but they don't have roller coaster highs during the good times either. Then cyclical markets that are the opposite, that if you're looking at a graph, it looks like a roller coaster, ups and downs. And then hybrid markets which are in between the two, as the name would imply.

Sure.

And so we like to invest in these sort of boring linear markets with really good cash flow. And you know, they, they haven't come up a whole bunch, although they have come up surprisingly high given all this cheap money out there. But, but when I ask the real estate question, if you can speak to that, please do. If not, just I'll ask you. Real estate, what do you think?

Sure. So the way I think about it is real estate is a highly leveraged asset for most investors. Right. You put a little bit of equity down, you borrow a lot of money, you get some cash flow, you sort of service your debt, you get some appreciation, some principal pay down, etc. So there's an element of financial engineering that generates returns. Very sound financial engineering that's based on a handful of potential depending upon the individual investing in IT tax policies. Right. I mean, as small individual investors may say, well, I can deduct this, I can do that, et cetera. You can depreciate asset value of the building or the improvement to the land. So there's different nuances and I don't want to get into those generically speaking. I would suggest that real Estate is inversely directional to interest rates. Interest rates go down, we're going to have real estate prices go up. Generically, very high level base operating assumption. Of course, there's nuances by different subcategories, et cetera. And then it comes into the question, which you hinted at earlier, which was inflation versus deflation and which do I think is more likely? One of the dynamics I can point to with pretty good certainty over long periods of time is that the most powerful force I know of affecting these dynamics in the capitalist society is technology. And technology is, as all of us are feeling today, more and more impactful on the lives of every. By the way, technology is also what I would argue the most powerful deflationary force out there.

I agree.

Which. Right. We're able to do more with less.

Absolutely.

That is by definition productivity. That is by definition more supply, more output. More output. All else equals, you know, lower prices.

Right. If you have the same demand but.

More output, you should just get lower prices.

Viktor. Mike, couldn't agree more. I always likened it to this. There's a war basically, or a boxing match. In one corner there's bad fiscal and monetary policy, that's inflationary. And in the other corner corner, there's technology, which is deflationary. Who will win? We have yet to see. But you know, if we didn't have the tech, inflation would be insane. I mean.

Yeah, well, I'll go further than that. And I would say, depending upon your time horizon, I could convince, my guess is you and others, that the structural underlying forces, because of capitalism, as long as we retain capitalism, you don't get social unrest and revolution, which is a risk. But if you got a capitalist society that incentivizes innovation, that generates technological advancements, and also there's an interesting systematic feedback loop here, produces wealth and education that results in more often than not, lower birth rates. So you then have a demographic tailwind or headwind, depending on what you want to approach. But generally we have a society that's aging, they're having fewer children. And when you have a society that moves towards fixed incomes, they tend to spend less. People on fixed income spend less. And when you're spending less, all else equal, that's less demand. So now we just talked about the two most profound structural forces that would affect an economy, which is, you know, technology and demographics over the long run. And we're not going to talk about 1, 2, 3, 5 years. This is, we're talking 5 plus years and we're talking about less demand and more supply that suggests Prices go down, not up. Forget about our supply chain disruptions today. Forget about the inflationary pressure.

I agree. And there's that book, Empty Planet. Most people think the world's overpopulated, but let me tell you something, just wait 30 years. We need to have some kids.

Well, Jason, I do a lot of public keynote speaking at different conferences around the world. And when I do, I often run around around the world and say, hey, listen, let's look at the demographics. The United States is aging, Europe is aging and actually starting to shrink. Russia, Japan, shrinking.

Yeah.

China is plateauing. People think China, they're plateauing and they will shrink. Why do you think they've said, hey, forget about one child, let's get two children here and people aren't doing it. Japan shrink so suddenly. We're looking at the world's largest economies, all aging, moving towards fixed incomes and therefore less spending. At the same time, technology is producing more. So from a structural demand story perspective, or a structural supply story perspective, we got deflation. And this is a way to bring it all back, which is I got to believe that whatever happens to interest rates in the next 1, 2, 3, 5 years on a 10 year type view, I don't see strong upward prices and in the cost of money as a result. It also means to me that real estate over the long run should continue to be a profitable place to play.

Yeah, it's interesting too, and I'd love to just have three hours with you and go off on lots of tangents, but I'm curious what you think about this because, you know, you can't have a country without people. Japan will literally cease to exist because of their zero birth rate. You know, they're going to have no people in 70 years. Okay. You know, unless. Unless there's some massive increase in longevity. But China, everybody thinks China is taking over the, the world. And I gotta think, you know, you give it 10 years and even 15 years and China has a huge demographic time bomb. You know, it's hard to think that when you got 1.6 billion people, right? But just wait.

That's right. Well, it's interesting. So two things I would point to. So the traditional analysis that suggests Japan is really heading to a brick wall, right? Because they're going to age away and there'll be no one around and it'll just. Two caveats are worth highlighting. Number one, immigration.

Well, they don't do immigration there.

That's my point. They may have to. They may have to, right? I think they don't want to. They they haven't. But will they Enough people aging? Do you need some Filipino nurses to show up to help? Do you need some. Okay, that's one thing. Second angle to think about is the role of technology in this world and how we advance. Is it conceivable that a country like India would really struggle to implement technology that removes jobs, and so they would have a tough time really advancing? Whereas Japan, where everyone. They can implement technological innovations and it's not socially disruptive because people are retiring and you need that job done. I don't want to bring in an immigrant. Let me bring in a robot.

Right.

And so that could be a potential dynamic that enables a sort of greater longevity, perhaps greater innovation, other dynamics that might actually extend the story. But I think you're right. You'll love this, Jason. I was teaching this class on financial bubbles down at Yale University probably a decade ago. I was teaching this class, and one of my students comes in one day, Dr. Manshiramani. I figured it out. I know how to solve the Japan problem. I said, oh, please. This is like, there's trillions of dollars riding on this question. Share it. He said, we got to get a nice big ballroom, lower the lights, get some nice romantic music, and bring the boys and girls into the room. We'll be all set. 18 years later, you'll solve this problem. You got to do it widespread across every school. And I was like, okay, I got it. You're right. It's a demographic problem.

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