1823: Mental Hedonics & Commodities Supercycle

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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, empowered investors. This is episode number 1823. 1823. And we're glad you joined us today. So we had a great question from one of our empowered investors, or all of our investors are empowered, but one of our members of the empowered investor inner circle posted on the social network. We have a private forum in there where people are posting great things, questions, answers, ideas, brainstorms, comments, whatever, right? Opportunities. And they posted a question about, you know, look, prices are going up, housing is getting more and more expensive, rents have gone up and now interest rates are going up. So what gives? What gives? What are we going to do? What gives? That's what I want to talk to you about today. I want to talk to you about what gives and how the market adjusts to this and how, how the whole economy adjusts to it, how people adjust to it through hedonic adjustments. Now, you've heard this as I talk about inflation and the three major ways that inflation is manipulated, one of those being hedonic indexing or hedonic adjustments. Same, same idea there. But we also do that as humans. We have sort of a hedonic expectation. Now remember, hedonic, that word is, the root of that word is the word hedonism. Right? Hedonism is pleasure seeking. Obviously, we all know that. And so as we think of our expectations about our environment, our life, the people in our life, the things in our life, the things we have access to, the people we have access to, all of this stuff is really, this expectation could be called a hedonic adjustment. So for example, and I've shared with you before, that story that Earl Nightingale, the late, great Earl Nightingale told many years ago. I'm so happy that I Discovered my four great mentors in life, Earl Nightingale, Jim Rohn, Dennis Wheatley, when I discovered these guys, and of course, Zig Ziglar. Don't forget to mention Zig. He was great as well. But Earl Nightingale used to talk about this example that I've shared with you on the show previously, about how this business executive would leave his home in the morning and he would back his car down the driveway and go down the street toward town, right? Now this is obviously an old fashioned story because the first of you, the feminists are saying, well, the business executive's a man, why couldn't it be a woman? Oh my God. Yes, I know, I've heard it all before. But also the idea that you're driving toward town, right, because town is where downtown is, where work is, where the office is, right? Anyway, the whole point is, Earl Nightingale says in his poetic fashion, he says on both sides of him, beautiful homes can be seen. Their lawns well cared for, their paint bright, the windows sparkling clean in the early morning light. And then the business executive gets to the office, gets to work and associates with a certain type of people. And they have this expectation and his wife has this expectation of how life is, right? And the point Earl Nightingale makes in here is that the chances of them and falling further backwards on the socio economic ladder are so small as to be negligible. He said almost exactly that. I'm, you know, I don't have it in front of me. I'm not listening to it or reading a transcript. I'm just retelling the story that, by the way, I originally heard when I was the ripe old age of 17. So it's been a while. Not a bad memory there, Hartman. Oh, yes, good job. Okay. Anyway, that, that was my memorization of the story, basically. But the reason the chances of them sliding backward on the economic scale are so low is because of a hedonic adjustment. They expect that life, the business executive and his wife, right? That's the life they've come to expect. Now, how they got there, you know, it varies, right? Some of them were born into it, some of them inherited it, Some of them were just kind of lucky, right? But for most people, they earned it, right? They had to make their own way in the world like most of us, right? You know, most of us weren't born into the Lucky. The Lucky Jeans Club, right? Hey, that actually is a brand of jeans, by the way. But I'm not talking about jeans like blue jeans. I'm talking about genetics, right? So the Lucky Jeans Club and so we expect a certain thing. But guess what? Those expectations, unfortunately, have been attacked. I've told you before that I've recommended a book by Lou Dobbs called War on the Middle Class. Great book. I read it back in 2004, I think it was, and I really recommend that book. But anyway, the point of this hedonic adjustment that we all have in our own mind because of what we expect out of life. And by the way, this can work multiple ways. So this isn't a 10th episode show where we go off topic. We're going to discuss some hardcore financial and economic and investing principles today. However, let me just make the point that this works in multiple ways, this hedonic adjustment that we all make in our own mind, in our own psychology. You know, there's an old saying, people are about as happy or as unhappy as they make up their minds to be. Right. And I think you probably agree that that's a true statement. Right? It's a valid statement. But let's break that down a little bit. Let's unpack it a little bit and let's think about the details of that statement. Right? Okay. We can just make up our mind. I'm happy or I'm depressed, I'm sad, you know? Right. We can just literally make a decision. Absolutely, that's true. But we can do things to support that decision or detract from that decision. Right. One of them is obviously our posture, the way we carry ourselves, the way we talk, our level of confidence influences that. So if we are extremely confident that we are happy and successful and feeling good about life, well, it's going to be more likely that we believe ourselves. Right. And it's important that we believe the way we think because we're all having these conversations with ourselves. And the most important conversation any of us ever have had or ever will have, and we're all having it right now, is the conversation we're having with ourselves. Absolutely right. Yes, the conversations you have with other people are certainly important, but none are more important than the conversations we have with ourselves. Well, with this hedonic adjustment stuff, and we're going to get to the hardcore investing and economic stuff in just a moment here, but tangent alert, because, hey, psychology determines everything, right? Our belief system determines everything. I mean, every religion in the world is all about what belief. It's. It's about belief. So whether you got, what, 1.6 billion Christians or 1.5 billion Muslims or close. Those two are close, right? They all believe different things. And these beliefs are beliefs that People build their whole life around and many of them die around these beliefs, right? They commit suicide bombings, they, they do all sorts of things. They kill other people, they, they kill themselves. I mean, these beliefs are a big deal. Belief is everything, right? It's super, super important. But if we want to be happy in life, if we want to be fulfilled in life, then the hedonic adjustment is a really important thing. And by the way, this is really quite amazing to me that as I have traveled around the world, I've been to 87 countries and some of those countries I've been to many, many times over. But 87 different or unique countries, right? And I remember when I was in South Africa and I was on this beautiful South African tour and safari and it was with Young Entrepreneurs Organization. It was an expensive trip, but it was an awesome trip. And I remember, you know, we stayed in these beautiful places in Cape Town. We had beautiful meals, we had fantastic adventures. And then part of the trip was a safari and we went on this African safari. We stayed in this gorgeous lodge. They put rose petals on the bed every night and put them into different shapes and spelled different things with rose petals on the bed at night, you know, when you'd come in from dinner. And it was just an absolutely first class experience. And I've been on many trips like that, I'm happy to say very fortunate because it's a long distance from how I grew up. That's a long, long way from those humble, humble beginnings. Anyway, one day we had some free time on this South African trip. So our tour guide that took us out on the jeep and in the morning and in the evening when most of the animals were out and we would see the wild animals and we'd be in the jeep and he had the rifle there up front in case one of them jumped onto the jeep and tried to attack somebody. Anyway, we had some free time one day and so I was talking to him and someone else on the trip was talking to our sort of jeep driver, tour guide. And he took us to where he lived off of this beautiful resort and we just went to his house. And his house was basically a hut that was made out of, I don't know, probably like a sort of mud hut. And it had a dirt floor, you know, it had sort of like two rooms, I guess. I can't remember very well. This was about 16 years ago. And he showed us around, not just of his humble home, but also around his village. And he talked about how one of his biggest challenges was digging this well for water. And, you know, we all just take that for granted, right? But that was the big challenge, is digging a well deep enough to get easy fresh water close to home. And if he could achieve that, his whole life would have changed. Yes, he had access to fresh water, but it wasn't easy. Right. It was a real challenge. So think about the things that bother you in your life, and think about the things you want in your life, and think about the things that make you happy and fulfilled in your life and the things that make you sad in your life. Right? And all of that is nothing more than an expectation. And another way to say that is a hedonic adjustment. So when we talk about that in terms of the consumer price index, the hedonic adjustment, I've taught you about that over the years, about how they hedonically adjust something. So, for example, you know this iPhone that I'm holding up, Right. Well, it cost about fifteen hundred dollars. And it's not the newest version either. There's a better version of it now, but I didn't buy the better version because I really didn't need it. I didn't think. And my first cell phone that only did phone calls, it didn't even have texting capabilities. It weighed 14 pounds and it cost $3200. And this phone is dramatically better, of course, and it's actually cheaper. So the consumer price index cheats us and lies to us because it hedonically adjusts this. So even though you only paid one price, they index that, they manipulate it to saying, hey, well, it's twice as good as the last phone you had, the last iPhone. And so we're going to hedonically adjust it and assume you paid less than you really did, right? But the reality is you didn't pay less than you really did. So it's kind of a scam, but not totally a scam, because, you know, it is better. There's no question about that. But. But when they hedonically adjust things in the consumer price index, they're basically saying that you and I are not entitled to progress, right? We all expect things to get better because one invention or one discovery naturally builds on the last one. It's a kind of evolution and things get better, right? That's the idea. We're entitled to progress. The consumer price index is not entitled to the progress. We as people should get the benefit of that. I mean, imagine if they hedonically indexed from the invention of the light bulb or the wheel. Now, I don't know, is the wheel a Discovery or an invention? That's an interesting question to ponder. I guess it's maybe an invention, but whatever. So hedonic expectations, right? We're all on a hedonic treadmill because every time we get something we want, we tend to want more and more. And, you know, I got to tell you, I bet you've shared this experience, too. It's kind of funny. I remember my younger self, and when I was in my 20s and I was more in the striver mode, striving to be successful, I was a very different person in terms of my hedonic index of my life, right? I wanted things. I was more materialistic than I am today. And the funny thing is, today I'm dramatically richer than I was back then. And I was pretty successful back then. I mean, look, When I was 24 years old, I was number 59 ReMax agent in the entire world. And that year I earned almost $400,000. Now, if you adjust that for inflation, you know, it's probably well over a million dollars today. And I was only 24 years old, okay, As a. As a Realtor working for ReMax. Just a realtor. So I was pretty successful at a young age, but I was definitely still in striver mode. And I really like to buy things. You know, I've had all the expensive cars, you know, BMW, 740i, Range Rovers, the latest and greatest Mercedes, you know, all these expensive things. I had big, expensive houses and all of that stuff, and I really wanted that stuff now. And the funny thing is that as I've gotten richer and richer, I seem to care less and less about that stuff. I really don't much care. I guess maybe I've sort of had it all, and it didn't really do that much for me. Like, it didn't make me a lot happier, which I think usually material things don't really do that. They do for a short time. Yeah. You know, you. You got that beautiful new car, and you want to go sleep in the. Sleep in the car, right? It's so nice, the new car smell anyway. But, you know, it's really transitory, to use a Jerome Powell word, as he described inflation, which of course is a lie. But there goes another tangent. Anyway, so we have these hedonic adjustments, but in our own life, right? We gotta think, are these hedonic adjustments that we have.

Helping us? Are they making our life better, or are they simply blocks to happiness? Are they roadblocks on the way to happiness? Because our expectations could simply be like, hey, I woke up in the morning, you know, that's never guaranteed. You might not wake up, you might just die in your sleep and that'd be the end, right? I woke up in the morning and I was healthy. I could walk to the bathroom, to breakfast, I could go walk the dog in the morning without a problem. If that's your expectation and that's what you need to be happy, then you don't have a high hedonic expectation, right? But if you woke up in the morning and say you were some kind of financial person and you expected your stocks to be up because they were trading on the Asian stock exchanges and you know, if it didn't happen, you're mad, you're pounding the table, you go, you know, you go down to the breakfast table in the morning and you're just upset because you didn't make that extra million dollars last night while you were sleeping, right? You know, what are our expectations and are they helping us? Are they benefiting us or are they an obstacle to our happiness? And the way I think, and I am by no means a master here, but I think the way to probably balance this out is to simply practice gratitude right now. Hey, I said this wasn't a 10th episode show where we discuss something of general interest, a non financial topic. And I've been doing that. So let's get into some of the financial stuff. But just be grateful and compare yourself to other people, right? If you live in a prosperous, probably western country or Asian country, right. You're probably richer just by being a middle class person than maybe 2/3 of the human race. So just remember that, you know, when you woke up this morning, you did not wake up in a North Korean prison camp, right? You didn't wake up in a war zone in Ukraine, right? And let's pray that that ends soon. Let's hope Putin stops his terrible, terrible antics. But we've talked enough about that anyway. So comparison, right? You've got the goal in mind for the future, right? We've all got our goals, hopefully, and hopefully we've got those well defined. When we decide are we going to be grateful, right? Is we just look around and we think, look at all we have, right? And we, we can just be grateful for that. So anyway, that's that. So the question in the empowered investor inner circle today was what gives? With all that's going on, with rents increasing, with prices increasing, with interest rates increasing, likely the biggest issue, right? Because remember the rule of thumb, don't show the thumbs. The rule of thumb is 1% in interest. Rate equals about 10% in purchase price. So let's take a look at what gives. Well, as I have explained many times, what gives is lifestyle. And people make these silly linear statements and these silly linear conclusions where they say things like, you know, when the interest rates go up, the housing market's gonna crash because nobody's gonna be able to afford a house.

Okay, bubba, sure. That's just such an oxymoron statement. Okay, so if you might only be listening to this on audio, but if you're watching the video version of this, which I am recording on video as well, so it'll be on the YouTube channel and on social media. So what gives? Well, let me show you this comparison. I think I talked about it on the last episode, but here it is. To see it in all its glory, and if only audio, I will describe it in less glory because, hey, a picture says a thousand words. So what gives is the standard of living. The standard of living simply declines. People accept less. That is the only thing that happens when prices go up, when rents go up, when rates go up, depending on whether they're a renter or they're a would be home buyer. You know, they simply have to take less. Right? They're going to get less. It's like going to the gas station and saying, hey, I have $50. And before Brandon was president, hey, let's go, Brandon. Before he was president, $50 would fill my tank with gas and I could drive, you know, 300 miles maybe, and now $50 only does half a tank and I can only drive 150 miles. Adjust your expectations. You're simply going to have to accept less for the same amount of money. Right? That's the story. You accept less. You hedonically index quality of life and standard of living. That's what gives. They decline in times like this. Now here's an example. Here is a home in Jacksonville and I looked this up on Zillow and it was for sale just a couple weeks ago. So surely it's been sold by now with multiple offers right above list price. Probably, but I haven't rechecked. But a couple of weeks ago this house was available. It was $999,000. Now, this house in Jacksonville is five bedrooms, four baths. It's at 3809 Vickers Lake Drive in Jacksonville, Florida. It's just about 4800 square feet for a million bucks. And it's pretty nice. Okay? I mean, look at it, look at the grounds. This house is beautiful. It's got a circular driveway it's not exactly my taste. It's got some statues in front, some columns. My mom would probably like it. It's got Palladian windows, and those are beautiful. The Italian architect Palladio did some great window design. It's a little old fashioned. You know, it's got to look in the right place, but I love palladian windows in the right circumstances. And you know, you look inside the house and it's. It's got like a big, nice cornered lot. It's got marble floors, it's beautifully kept. I mean, it looks like it's in tip top shape. It's got nice chandeliers. It's got a nice kitchen with nice stainless steel appliances. A beautiful breakfast nook with a bay window in the living room area. It's got a big, beautiful bay window. I mean, it's got nice ceiling detail. This is a nice, gorgeous property. And it's in Jacksonville, Florida. Okay, now here's a property in New York City. Okay? This is 184 Thompson Street. Apartment 5W. It's the same price, $999,000. We'll call it a million bucks. This house is one bedroom, one bath. And by the way, it's not really a separate bedroom, and it's 653 square feet. So if you move from Jacksonville to New York City, Jacksonville, Florida to New York City, you would have to make a huge adjustment in your expectations. A big hedonic adjustment. Okay? But guess what? You don't even need to move. If you're a home buyer or you're a renter, you don't even need to move. Because guess what? Jerome Powell and Brandon, our president, are making the decision for you. They are automatically, hedonically adjusting your life down. A downward adjustment in the standard of living. Now, by the way, when I say your life, that's probably not true of you. Listening. Because you're listening to my teachings that help you beat the system. Of course. I mean, look, all of you are telling me you're beating the system. You're writing reviews. And by the way, winning the contest for our reviews or our itunes or Apple podcast reviews or commenting on YouTube. And you're constantly telling us that you're beating the system with the techniques I'm teaching you, right? That's great. Inflation induced debt destruction, packaged commodities investing, all of the other strategies and techniques, the ten commandments of successful investing. You're beating the system. So when I say you, I. It's really not you. It's the people who don't learn these strategies. And don't implement these strategies and just don't know how it all works. Okay? Those are the people that are losing out. All right, so what we have here is a huge hedonic adjustment. The hedonic adjustment comes from moving from Jacksonville to New York City, right? Obviously there's a big adjustment downward. Now if you move the other way, your hedonic adjustment would be upward, your expectations would be higher. Because in Jacksonville you get a lot more for your money and life is better there than it is in New York City. And by the way, look at this. This is the little balcony and the little mini crappy kitchenette in this million dollar New York apartment. I mean, it's got a, like a mini dishwasher. You know, I used to have a big beautiful motorhome. It did not have a dishwasher, but if it did, it would be this size because they had them. It had a little washer dryer in it and it's got a little dumb balcony with like one chair on it versus that beautiful home in Jacksonville. Talk about hedonic adjustment, right? Okay, so there you compare it. That's the Jacksonville house, Beautiful master bedroom, Jacuzzi tub for two, big shower, marble lined, et cetera. Okay, but look, here's the thing, folks. We're all wondering, how long can this thing continue? This market has been red hot for quite a while. Well, you know my strategy that I've taught you over the years, Packaged commodities investing, and I also call it assembled commodities investing. So either way I refer to it, it's the same basic idea, right? You're investing in commodities in the form of a house or maybe an apartment building. Right? And all those commodities are in a super cycle, I believe. So we'll get to that in just a moment. Okay, but these, you're really a commodities investor, but instead of buying those commodities on the exchange like most people do, or buying some gold or silver from your gold dealer and sticking it under your mattress or in your safe deposit box or whatever, right? Instead of doing that, you're buying these commodities assembled or packaged in the form of a house or an apartment complex sitting on a piece of land. And because that asset changed its name to real estate, it got all this favorable tax treatment. It got all this favorable mortgage and lending treatment. It's just a beautiful asset. It's the most historically proven asset class in the entire world. It's the most tax favored asset class in America. It's the best thing going. It's the most proven wealth creator. We all know that because we all know people who've done it. And a lot of us have done it ourselves. I certainly have. And many of you listening have probably most of you listening. So I don't have to convince you of that. Okay? But just a little business here before we go on and talk about the Commodity Super Cycle. We've got our virtual event coming up this Friday and Saturday. JHU Live, but virtual. Hey, you don't have to worry about fuel prices to attend this event. You know, Sarah was telling me that she bought a plane ticket to travel somewhere. One of our investment counselors, Sarah, and she said it was like, super expensive. And I'm like, I know. I just traveled to Arizona a couple of weeks ago, and I could not believe how expensive that ticket was because of the fuel prices. And, hey, you know, you fill up your car, you know exactly how that's all going, right? So join us for this virtual event in the comfort of your own home or wherever you are, even on the International Space Station. We want to welcome the astronauts on the ISS to attend the event as well. Get your tickets@jason hartman.com and right on the front page you will see this image. And you just click on the green thing and where it says get your tickets. And then you're taken to this page where you can purchase tickets. And at time of this recording, it's like three days away. But at the time you listen to it, probably be two and a half days away. And we're starting with a cocktail reception, a virtual cocktail reception. So have a drink handy on Friday evening. Those are always really fun. And we'll do a little bit of content, some investor stories and participation from all of you. It's a really, you know, like, intimate, nice thing when we do these virtual events. I absolutely love them. I love the live events, too. And we will announce a live event in the near future here. But this is JHU Live, Jason Hartman University Live and Virtual. First time I've done this event virtually. And this is the event where you learn how to do the math of real estate. We'll also have some properties that we'll talk about, but you'll learn how to do the math, how to analyze a deal really, really well, how to construct a portfolio and how to optimize your portfolio, depending on what you want out of your portfolio. And we all want different things or different life stages. We have different amounts of money, amounts of wealth, so we want different things because of that. So join us for JHU Live and Virtual this Friday and Saturday. Of course, you'll have Access to get the recordings as well. That's an option when you get your ticket. So check that out@jason hartman.com. okay. And by the way, thank you to all of you who signed up by boy, I made like one announcement and I was overwhelmed. I am so grateful and blessed that all of you were just so excited to book a strategy session with me to, you know, talk a little bit about strategy and so forth. A zillion of you booked, and I'm just completely out of time right now. So we're booked up for now. Let me work through some of those appointments over the next few weeks. We'll open this up again probably. We'll put a little, you know, parameters on this this time so we won't be overwhelmed so easily. Maybe only let people book a certain number of these meetings per day. But we just had so many requests for this meeting and you went to Jason hartman.com coach and booked your time. So I'm looking forward to talking with all of you. I can't wait. But, you know, time is limited. There's only 24 hours in a day and only, only so many people I can talk to. So we will reopen that up again soon and we'll book some more strategy sessions once we work through the existing demand there. Okay, so let's talk a little bit about this commodities super cycle that I believe we're going to be in for several years to come. Now, one of our investors, by the way, I, I told you about this maybe before in the show, but he lives in Florida and purchased several properties through our network in Florida. And when he looked to buy another property in the same area, where I believe he'd already purchased two of them from the same local market specialist and thought, wow, I gotta pay a whole lot more money for the same properties I already purchased previously. And he was really reluctant to do that. You know, nobody's more reluctant than someone who knows what they paid before and is thinking, why do I have to pay a hundred thousand more now? You know, I bought these properties, you know, a year and a half ago and it was a hundred thousand dollars less or whatever. I don't have the exact number, but something like that. It was about a hundred thousand, I think was the price difference. And he basically asked himself one question and decided to move forward with a purchase. He asked himself this question, remember, the most important discussion you'll ever have is the one you have with yourself. Right, we, we talked about that already. And his question to himself was, will the Federal Reserve and the government of course they're intertwined inextricably. Right. Will they continue to print money? Will they continue with. Generally speaking, and I'm not going for an academic definition of QE here. No need to send me an email about it. I don't need a lesson. I know how it works. Okay. You know, when you're in my business, you get some really crazy emails sometimes.

It's just funny. Everybody's a critic. You know, the armchair quarterbacks, they're out there for sure. Anyway, just the general concept of loose monetary policy, right, Whatever you call it, money printing, quantitative easing, asset purchase programs, yada yada, yada, doesn't matter. Okay. Will the Fed continue to do that?

Well, you know what? I don't think that question's very hard to answer. And his answer to himself was yes, they will. And by doing that, that will make him win as an investor because he'll be taking advantage of inflation induced debt destruction on the mortgage asset. Mortgage asset. And he'll also be taking advantage of the natural hedge against inflation, I.e. real estate, and the commodities super cycle as well. So you know what is a super cycle, Right? Well, I got this screenshot from one definition. There are many out there. Okay. Well, the global economy tends to be very cyclical. That is, it is prone to alternating periods of boom and bust. There are times when a cycle persists in a boom phase for a prolonged period. With the study rise in commodity prices over the last 10 years to 2021, one may ask whether there is a commodities super cycle, but what does it mean? A commodity super cycle is a period of sustained increase in commodity prices driven by structural changes in the global economy. Now hang on a second. Let's just talk for a moment. As I have taught you over the years, about packaged commodities investing and assembled commodities investing. Remember, when you break it down, that house that you are investing in, it is made of petroleum products, concrete, lumber, glass, steel, energy, copper wire in the walls. Right? All of these materials and a whole bunch of others. Right. That's just some examples. And of course, we all know what's happened to lumber prices. And the prices are pretty much everything, right? They're just crazy high. And some of it is transitory, a little bit of it is transitory, but that part doesn't seem to be cleaning itself up very quickly. Jerome Powell. So you're investing in all those commodities, right? And if there is a commodity super cycle and this boom is going to continue, which I think it will for quite a while, you're going to win. And even if you think, boy, these houses are more expensive than they used to be. And you're right. But you got to also study the Hartman comparison index, the hci, to understand the real value of the properties and the real cost of them. Because you wouldn't be foolish enough to compare the price of housing to just one thing, would you? No, you would not. You would not, because that would be wrong. You would compare it to many things, not just the dollar. And that's why we have the HCI or the Hartman comparison index. If you're new to the show, go to Jason hartman.com, type in HCI or Hartman comparison index. And we've got lots of podcast episodes, lots of YouTube videos on all of those topics. Okay, so back to this commodity super cycle. Sustained increase in commodities prices driven by structural changes, blah, blah, blah. It is a relatively rare phenomenon. So if you look over the past, you know, 150 years, I could show you charts of commodity super cycles. In fact, I think we have one coming up, spoiler alert. Where it is relatively rare, right? So characterized by commodities trading above their long term price trend over a long period. In fact, there have been only four commodity super cycles since the 19th century, and each is tied to a transformational period in economic development. Well, folks, if you've studied economics at all, and if you're listening to your show, you're already studying it because you're listening to me talk about it. Okay, Professor Hartman. Yeah, that's right. I'll take it. Professor. Yes. So here's my chart for you. Okay? Now those of you listening to audio, you can't see this, but this starts way back in 1812. What war did we have that year? Well, we had The War of 1812. When did that happen? The War of 1812. I think it was in 1812. Yep. Okay. And the Napoleonic wars, okay, through 1814. Right. So there was a peak, and then there was the first U. S. Depression in 1824. Nobody talks about that one. It's too long ago. Then, of course, we had the Civil War, 1864, good old Lincoln, the Gettysburg address, the assassination of Lincoln, unfortunately, the first Republican president, by the way, who ended slavery. But, oh, those evil Republicans. They'll say the nutty nut jobs on the left. By the way, you know, when we have that review contest for the 50Amazon gift card, you know, Ashley goes in and picks the reviews, right? I told her, I said, ashley, if there's a week where we don't have any new reviews because Nobody wants the 50Amazon gift card and they don't want to win that raffle or they don't comment on the YouTube videos to win the 50Amazon gift card. Then you're going to pick out of the old reviews and you know, I hope you randomly pick the one that I thought was great. A one star review. Can you imagine anyone giving me a one star review? Well, you know, some people just aren't very objective, are they? No, they're just, they're just ideologues, right? They're just bitter political people. And the title of the review I thought was pretty cute actually. I gotta give the guy credit. He said Fox News for real estate Investors.

Or, or I think the title of the review was Fox News for Real Estate. One star. I actually think that's a badge of honor. So there you go. Thank you for that review and I'm sure you're probably still listening to the show, by the way, and you don't have the guts to change your review. You're just taking, taking, taking, you know, throwing your political jabs in there. Okay, fine and dandy. I can take it. I'm a big kid. All right, so then we had the depression of 1930s, right? And then we had the Cold war trudge along after World War II. And then we had a peak of the commodity super cycle. And if you're looking at the chart here, the prediction part is that this is going to go up, up, up, up, up, up, up. Okay? And who knows how long it will go or how high it will go. But given that we have a developing middle class around the world that is a huge driver of a long term commodities super cycle. Folks, I have been talking about this since 2004, all right? The development of China in India and how that's influenced all these commodities prices. Yes, there are ups and downs, but we don't really look at those or care about them. We look at big mega trends, the macro trends, right? That's what we do here. So. But hey, look at the brainiacs at Goldman Sachs. They think commodities are a long term super cycle play. Here's an article from Reuters. This is November 9th of 2021. Okay? Goldman sucks. Oh wait, Goldman Sachs predicts years long commodities super cycle. Here's the article. London, Reuters. Goldman sucks on Tuesday reiterated its prediction of a commodity super cycle driven by a recovery from the COVID 1984 pandemic.

Oh, maybe I didn't read that exactly right, but okay, and stimulus measures that will boost demand. Quote, we expect a structural bull market in commodities very similar to what we saw in the 2000s or the 1970s, unquote, Jeffrey Curry, Goldman Sachs global head of commodities research, told Reuters. Commodities summit, quote, at its core is not only a structural decline in supply across the whole commodity complex.

But it's also a structural rise in demand, unquote. And by the way, did they punctuate that wrong? The comma is supposed to go inside the quotation marks. Oh, but actually, I think the Brits do that differently than the Americans.

My mom was a bit of a grammar Nazi and I'm thankful to her for it because it made me better. Otherwise I would be saying me and all the time, like all these, oh gosh, it bugs me. Anyway, enough of that. What we're witnessing is the collapse of society, folks. The peak was 1990, just so you know. Okay? He added, saying a super cycle could be a, quote, multi year, potentially a decade, unquote. Fossil fuels and metals markets have been boosted by an upturn in demand as countries emerge from restrictions aimed at curbing the pandemic. Investors should, quote, stay long, unquote, on commodities, curry said, citing oil, copper and aluminum, or as they might say it, aluminium. Okay, so there you go. So Goldman is predicting commodities are going up. And remember, if you're a real estate investor, you're automatically a commodities investor. So just remember what I've taught you about packaged commodities investing. If you want to know more about that and how it ties in with a Hartman risk evaluator, well, join us this weekend or Friday and Saturday for our virtual Jason Hartman University and get your tickets@jason hartman.com for that. Or go to jason hartman.com, use the search engine there and type in Packaged Commodities Investing. You'll find all sorts of past podcast episodes, blog articles, YouTube videos. It's a big resource and that site has tons of free information for you. Okay. And. Or Assembled commodities investing. Call it what you like. I use both names for it. Anyway, that's it for today. I think we've gone more than long enough. Thank you again for joining me. We hope to see all of you on Friday for our cocktail reception, our virtual cocktail reception, and Saturday for some good, good learning. It's going to be a great weekend at Jason Hartman University. So get your tickets for that@jasonhartman.com and we will see you there. Until next. Happy Investing.

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