2233: Trump's Return: What a Second Term Means for the Economy and Markets with Prof. David Collum

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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.

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. 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 2233 and greetings from the beautiful Four Seasons Hotel in Austin, Texas, where you can get the breakfast buffet for a bargain price of $78 per person. But hey, there's no inflation.

Yeah, right. So today we have got Professor David Colum with us back on the show. He's been on a few times before over the years and he is here with us to talk about the impact of the Trump election election and the absolute sweep of the government. This is just such a landslide. It's absolutely unbelievable in so many aspects of government. Not just the presidency, of course, and you've watched the results, so I don't need to recap them for you, but they are truly, truly amazing. I mean, all of the swing states that defected, it's just really an amazing election. It really is too big to rig, as I like to say. And as others like to say, it really was too big to rig this one because people just demanded a change and thankfully they did. It's going to be better for everybody, even the stupid, crazy far left people. It's going to be better for them too. So it's going to be better for pretty much everybody. There's going to be widespread increases in prosperity, but it is going to take time to work its way through the system and it won't be without some pains and some bumps in the road. Namely, two major factors that will put massive upward pressure on home prices. And here they are. One is, of course, the curtailment of immigration, which I think is a great thing needed to happen. Folks, countries have borders. Imagine that. Then the massive deportations of illegals that Trump has promised. So we'll see how this plays out. But you know what this means. A lot of these people are supplying labor to the housing market and the construction industry and a whole bunch of other industries. And this is cheap, cheap labor. This is why the Democrats, in addition to the fact that they're just, you know, fake voters, Right. Imagine a country that doesn't require ID to vote. You have to have ID to do everything else except vote. So thank God that's going to change. I think we're going to see a federal law about that, fortunately. But so as these people are either not coming into the country or are leaving the country, that's going to push up the cost of labor, but it's going to create more American jobs and it's going to be good in the long run. But in the short run, it has the effect of pushing prices up and general inflation. The other thing, of course, is the much talked about tariffs. The tariffs that are coming are going to make so many ingredients of homes a lot more expensive. And builders are going to pass that cost through to buyers. That means you, US investors, right? Our cost is going up. So the urgency here is, and the word to the wise here is that you really should consider buying more properties before we really see the result of this. Now, what does it do to resale homes? Well, it of course lifts the prices of those as well because resale homes just respond to the same competitive market as the new home builders. And if they see that the new home builders are getting more money for their homes, they're going to raise their prices, too. You know, it's a comparable market. And if they're doing any renovations to their properties or they're doing any fix up, you know, any, any parts and labor, their cost of doing that is going up and they're going to pass that through to the buyers. And I know there are little soft spots in markets around the country now, but folks, it hasn't even been a week, okay? And all sorts of things are starting to change very Very quickly, mark my words, these two factors, among many others are upward pressure on prices. And you want to act before this works its way through the system. Okay. Really, really important. So the action step for you is to contact your investment counselor today. Go to Jason hartman.com or if you're already working with one of our great investment counselors, talk to them about properties that you can buy to build your portfolio before we see this upward pressure really become systemic and get into the market. Okay. You want to act sooner rather than later. Really, really important. You know, I haven't talked too much about too much urgency in the market really in the past year. I have talked about prices going up and so on and so forth, which they have. I've been completely right about that. Pat me on the back.

Yes, I know. I just have to rub it in. Sorry about that. If you can get past Jason saying I told you so, as one recent review said. Thank you for that review. There's some good information on his show. Well, I'm glad you appreciate that. But act sooner rather than later. That is the important, important thing. And if we combine this with a Fed pivot, which we're already seeing, that we're going to see more rate reductions, but maybe less so than if Kamala would have been elected or selected, we are going to see overall inflationary pressures. And so the Fed may not be as aggressive as they might have been thinking of being for the election, but we'll see how that all plays out. Look, interest rates. I can't tell you I'm right about interest rates because I've been lousy at predicting them. You know that. I've admitted it. Nobody can predict interest rates, including yours truly. They are very, very hard to predict. But nonetheless, acting sooner rather than later is important. The shortage, the demographics, I mean, just everything we've talked about on past episode. All right, let's get to our guest today, David column for a lot more information about what has happened, why it happened and what to expect in this really, really rosy future we have. I think it's time to become very optimistic again compared to where we were a week ago. I mean, there's a lot of reason for significant optimism. Look at what the stock market has done. Look at the Trump bump. It's massive. It is massive. Unprecedented changes going on all around the world. And by the way, be sure you are following me on Instagram, Facebook, X of course, to a lesser degree. But I do love X for getting news and information because it is the censorship free platform. So that's wonderful. Jason Hartman and the number one Jason Hartman one, because a lot of good posts for you there. Just memes. I'm a, I'm a huge collector of memes that you may want to reuse in your own social media posts. They're, they're pretty good stuff. So follow me there. And let's go ahead and get to our interview with Professor David column. And before we go, let's hear an interesting clip of the day.

If we don't have free speech, then we just don't have a free country. It's as simple as that. If this most fundamental right is allowed to perish, then the rest of our rights and liberties will topple just like dominoes, one by one. They'll go down. That's why today I'm announcing my plan to shatter the left wing censorship regime and to reclaim the right to free speech for all Americans. And reclaim is a very important word in this case because they've taken it away. In recent weeks, bombshell reports have confirmed that a sinister group of deep state bureaucrats, Silicon Valley tyrants, left wing activists and depraved corporate news media have been conspiring to manipulate and silence the American people. They have collaborated to suppress vital information on everything from elections to public health. The censorship cartel must be dismantled and destroyed, and it must happen immediately. And here is my plan. First, within hours of my inauguration, I will sign an executive order banning any federal department or agency from colluding with any organization, business or person to censor, limit, categorize, or impede the lawful speech of American citizens. I will then ban federal money from being used to label domestic speech as mis or disinformation. And I will begin the process of identifying and firing every federal bureaucrat who has engaged in domestic censorship, directly or indirectly, whether they are the Department of Homeland Security, the Department of Health, Human Services, the FBI, the doj, no matter who they are. Second, I will order the Department of Justice to investigate all parties involved in the new online censorship regime, which is absolutely destructive and terrible, and to aggressively prosecute any and all crimes identified. These include possible violations of federal civil rights law, campaign finance laws, federal election law, securities law, and antitrust laws, the Hatch act, and a host of other potential criminal, civil, regulatory and constitutional offenses. To assist in these efforts, I am urging House Republicans to immediately send preservation letters, and we have to do this right now, to the Biden administration, the Biden campaign, and every Silicon Valley tech giant ordering them not to destroy evidence of censorship. Third, upon my inauguration as president, I will ask Congress to send a Bill to my desk revising section 230 to get big Online Platforms out of Censorship Business from now on, digital platforms should only qualify for immunity protection under section 230 if they meet high standards of neutrality, transparency, fairness and non discrimination. We should require these platforms to increase their efforts to take down unlawful content such as child exploitation and promoting terrorism, while dramatically curtailing their power to arbitrarily restrict lawful speech. Fourth, we need to break up the entire toxic censorship industry that has arisen under the false guise of tackling so called myths and disinformation. The federal government should immediately stop funding all nonprofits and academic programs that support this authoritarian project. If any US University is discovered to have engaged in censorship activities or election interferences in the past, such as flagging social media content for removal of blacklisting, those universities should lose federal research dollars and federal student loan support for a period of five years and maybe more. We should also enact new laws laying out clear criminal penalties for federal bureaucrats who partner with private entities to do an end run around the Constitution and deprive Americans of their First, Fourth and fifth Amendment rights. In other words, deprive them of their vote. And once you lose those elections and once you lose your borders like we have, you no longer have a country. Furthermore, to confront the problems of major platforms being infiltrated by legions of former deep staters and intelligence officials, there should be a seven year calling off period before any employee of the FBI, CIA, nsa, dni, DHS or DOD is allowed to take a job at a company possessing vast quantities of US User data. Fifth, the time has finally come for Congress to pass a Digital Bill of Rights. This should include a right to digital due process. In other words, government officials should need a court order to take down online content, not send information requests such as the FBI was sending to Twitter. Furthermore, when users of big online platforms have their content or accounts removed, throttled, shadow banned or otherwise restricted, no matter what name they use, they should have the right to be informed that it's happening, the right to a specific explanation of the reason why, and the right to a timely appeal. In addition, all users over the age of 18 should have the right to opt out of content moderation and curation entirely and receive an unmanipulated stream of information if they so choose. The fight for free speech is a matter of victory or death for America and for the survival of Western civilization itself. When I am President, this whole rotten system of censorship and information control will be ripped out of the system at large. There won't be Anything left. By restoring free speech, we'll begin to reclaim our democracy and save our nation. Thank you and God bless America.

It is my pleasure to welcome a returning guest back to the show, and that is none other than Professor David Colom. He is a professor of organic chemistry at Cornell University. He has loads of insights into culture, society, politics. And we are going to focus on what just happened. We just had a big event going on this week. I'm told many are excited about it. So we're going to talk about that. And David, it's a pleasure to have you back. It's been two or three years, I think, since you've been on with us.

Yeah, time flew. I would have said it was a year ago, but the older you get, the more time takes these gigantic leaps. So when you're 4 years old, you can't imagine being 5. And when you're 65 or 70 years old, it takes a blink of an eye to get to the next five.

You know, I know that's really.

The percentage of your life is shrinking, right? The percentage left is shrinking, Right, Right.

It's a scary thought to many people, but it is what it is until we find, hey, maybe you want to talk about the longevity sciences world a little bit. That would be interesting because you probably know about that in your field.

Not so much. It's an interesting problem. I mean, there's, there's places in the world where people live longer than everyone else does for reasons that are unknown but have to do with high altitude. So.

Sure. Good stuff. Well, hey, let's talk about the red wave that has swept America. Trump's monumental victory, and really the Republicans monumental victory. It looks like the entire federal government will be in the hands of the right side of the aisle. Just give us your broad thoughts and let's zoom in on various parts.

So I haven't checked in the last 12 hours. Does it look like they get the house too?

Yeah, I haven't checked.

You know, it's like they're trying to cheat us in Arizona or something. You know, the election still looks like they, they, they, they shrunk their footprint to. Let's try to hang on to the House. I think, you know, it's interesting as, as we talked beforehand before we started, it was very uplifting. The first time I voted for Trump, you know, my hand was shaking. There was a, there was a trepidation because we're going, okay, we're doing an experiment here. And Trump versus Hillary was a no brainer for me. Curiously, even as a Reagan Republican. I could have gone, I pondered if I could pull the lever for Bernie, thinking, well, they'll neuter the guy and he's a harmless person and that sort of thing. And I probably would not have.

At least Bernie had some principles.

I think that's right. Consistency. Consistency. Right now in 2020, you know, we had just finished four years of chaos and there was this kind of mixed emotion even then where you go into, I want more. Let's just get a normal candidate. And then they shot Biden at us and he was obviously mentally losing it. And people say no, they didn't notice that till late in this term. That's not even close to. I went back and checked my tweets. I have tweets from 2019 saying it looked like he had had strokes. So the Democratic Party has disappointed everybody, in my opinion. They've somehow put some sort of priority of winning the election at any cost ahead of providing us with a choice of a leader that we may or may not agree with. And Biden really represented the first example. Although attempts to install Hillary was one of the first earlier examples, she was a viable looking candidate. She didn't turn out to work as well as they hoped. But installing Biden was truly extraordinary. In fact, I like to ask, you know, if you were watching the Iowa caucuses in 1620 and yet Biden on the far left and you had Kamala in the middle and she had just finished being completely savaged by Tulsi Gabbard. The pay line on a Biden Harris administration in Vegas would have been 1,000 to 1. And somehow they did that. And so if I were a Democrat, I'd be furious at my party. And as a Republican, it makes me nervous when the election feels like the most important election of our time. I don't think it should feel that way. I think we should be going, you know, any mini mining, I don't care.

Right. You know what's interesting about that is this idea. So I think this is a really important idea for everybody to hear. If you think that the presidential election is hugely significant and it's going to change your life, which by the way, I happen to. Okay on this last one for sure. I do think, you know, we always say this is the most important election of our lifetime. This one really was. This one was really important. But if any of us think that, which a lot of us do, including myself, that shows us the federal government is way too big. I know, it's just way too large. We should never be thinking, I can't Imagine our founding fathers ever thinking in their constituencies, thinking back in the day, right, that, you know, the presidential election is going to be that monumental because the government was so much smaller, Right. You know, it just didn't have, have the type of overreach it has today.

And in fact, you know, the captains of industry at the turn of the century certainly owned the government as they do now. But the difference is it was so small that basically the government was bribed to stay out of their way.

Right?

And now the government's so large that they're bribed to give them our money. And that's a very different world, I think. And so I actually did a deep dive this year on FDR. It started out as a World War II deep dive, and it turns out it's a fascinating deep dive. You can completely rewrite the history World War II if you read the right books and you find out that FDR was not just a left winger who ushered in a welfare state, that you could politically debate the merits of that sort of thing. He was a psychopath. And you don't get that from the narrative that we're told today. He was a compulsive liar. He was incompetent in everything he ever did except politics. And then he became a masterful politician to the point where people said you got to even keep arms reach from the guy because he is so good. And all his New Deal stuff all went to political cronies. The whole thing was really a gigantic rift. And then you get to World War II and you find out his right hand man was a Soviet spy and it's just a mess. So those report elections and we blew them. This one. The interesting question will be, so this one. The reason is uplifting, I think, is because the sense that Trump has put together an A team where Kamala just, if I were to criticize them, there'd be a humongous list. But one of them is there was no sense of a team. You had no idea who was on her team. And I think that the Democrats should have noticed that and said, let's get some adults in view and say, okay, this person, this person, this person are going to attach to Kamala. And so you can say, okay, I feel better now if it was blinking.

Trump has a dream team. I mean, we've got to talk about that, but go ahead, finish the.

Well, it's like the USA basketball team with Michael Jordan and Larry Bird and Magic Johnson on it, you know, back in the first Olympic team, professional Olympic team. And so Trump's A team looks phenomenal. The question is, now that he's not running for reelection.

Right.

Well, there's a number of fascinating questions. What's this Merchant guy going to do with Trump's 34 convictions? I would be shocked if he tried to send him to jail, because I think Mershon's probably going, you know, I thought this would be fun when we were beating on the Donald. Now I'm a historically important figure and I could really screw this pooch. Right, right. And it's all right.

I'm curious about something, I guess. Well, Nixon would have done it. Right. A president cannot pardon themselves. Right.

Well, the other problem is they're not federal laws, I think, that he got convicted of. I think they were very careful to keep it away from the federal government. Think at least some of them. And so I'm not sure that's even a federal decision. So I have this fantasy that Mershad's going to figure this out and go, okay, I'm not doing this. So here's here. My fantasy is that he would say, okay, I'm going to sentence you to four years of community service.

In the old office.

Right. And my warning to you is, do not screw up.

That's hilarious. That is so funny. That's almost a comedy skit. It may happen, too.

That's what I would advise him to do, actually. But. But now, I did one podcast with Kunstler yesterday, and he. He says, no, that. That actually is as fun as that would be. Well, he. Not only we were on yesterday, I've known it for about 20 years now. We're doing what together with a different host today? So Jim and I are gonna have to find some way to not trip over each other. But he thinks that it's really gotta be rubbed out. He thinks. He thinks they can't just leave it with a conviction, and he thinks it really has got to be scrubbed. And so I. I'm not sure they're gonna go that far. Okay.

Okay, well, look, let's dive into some actionable items to. Whatever we can.

I have a wish list.

Yeah. Yeah. You know, first of all, what do you think this new administration means? What do you think it's going to do for. For my part, just to give you maybe a couple bites to nibble on, I think Trump is going to be a much better president this time around. Yeah, I think he. He's obviously much more knowledgeable. He's going to put together a much better team. We've already seen the signs of that. I mean, the People on his team are literally a freaking dream team and he can trust.

Yeah, Elon is going to make the government so much more efficient. It's going to be beautiful. Hopefully that office never goes away.

Did you read his biography, by the way?

My mom did and she.

Brilliant. Yeah, it's brilliant. And the take home lesson that's central to his biography is that there's no one who knows how to cut costs better than Elon.

He's a genius.

He is a phenomenal. He's an Einsteinian type influence on the.

World and yeah, completely agree. So. So he's got this dream team. He knows what he's doing. He's going to be just massively more effective. He's the Energizer Bunny. I mean, the guy just has so much energy for his age. It's, it's truly unbelievable. And even if you are the most radical leftist, you have Trump derangement syndrome. You have to admit that he loves America and he wants to do. And people hate him because he has a big ego. But the ego is what propels him to do all these great things. I mean, you know, folks, the ego gets too much negative pr. It of course can be negative, we all know that. But look, without ego there's no progress. Okay? That's what makes the world go right.

Guys without ego are bagging groceries.

Exactly. Yeah, yeah, absolutely. Okay, so. So your thoughts? What does this new administration mean? What are they going to do? What's the economy going to look like and what can our people listening and watching do to deal with it more effectively, become more prosperous, et cetera?

Well, I'll tell you, I think he will be able to shut the border. I think getting people back out is a way different problem.

That's much harder.

Yeah, much, much harder. One of the things people talk about is incentivize people to walk out themselves. And I've heard they're all heading to Canada already. Take Robert De Niro with you, by the way.

And Madonna.

And by the way, any of these guys who promise to leave, I would personally write a check for their plane ticket.

We always say that every four years.

Go fund me, go fund me. They never leave day one. I want them to do a blanket pardon on January 6th, day one. And I don't want him to cherry pick his way through. It's not worth it. I want him to just sweep right through all the convictions. Don't try to figure out what's, who's right and who's wrong. Forget about someone bash some cop over the head With a chair or whatever, just let them out.

That was, that was a setup. I mean, it was from head to toe. From head to toe, yeah. Pelosi set the whole thing up to.

Happen and, and all the feds and, you know, imported gangster types. Now I've got pictures of known Ukrainian operatives with, of, you know, John Sullivan in the crowd. I've got pictures of John Sullivan talking to Ray Epps. Right. Those two should not be talking to each other.

Right.

They're very different.

And, and what he's doing is he's at this point, I don't know that he would really actually be pardoning anybody. He would just be commuting sentences.

I want him to scrub it. Whatever he can. Whatever.

I understand the definition, but get him out of jail. My point is, if they did something wrong, they've served some time. Okay. So. Yeah, okay, go ahead.

A lot more.

I doubt there's more than a half a dozen people who are still in there who deserve to still be in there. There is probably someone somewhere in that crowd who did some awful stuff who is not a Fed. Although most of the ones doing the awful stuff, I think, were Feds. And I wanted to try to do surgical removal. I want a clean sweep. I want to see if Bannon can somehow get back in the game. I don't know if you saw his speech he gave. So Bannon goes up to prison for four months and has time to meditate. He came out and he is all pistons firing. They should find a way to harness Bannon back into the game. Maybe not officially, but this boy should be back in the center of the ring fighting. I worry his financial policies are going to be a little too self serving and blow the debt up a little bit. I don't think he's as strong at that stuff as you would hope. I'm a little unclear about how to handle his ideas on tariffs. Although his tariff ideas are a little different than say the Smoot Hawley tariffs in the sense that we just blocked people from sending shit over. His tariff idea is, look, we want you here. You have to build this stuff. Here you just have to pay Toyota. Bring, bring your, bring your plan. Right? You want to build it, but here it will be inflationary because we pay our people what better.

Yeah, so, so that's a good point. I want to focus on that for a moment. So tariffs also. You didn't say it. But closing the border and blowing the debt up, those are all three very inflationary. Okay, all three of those things. So how much inflation are we talking about. And you know, he's, he's pressuring already pressuring the Fed like he did before to lower rates, which is also inflationary. So inflation could be the thing for the Trump administration. Right.

I've written quite a bit this year, rough drafted so far on inflation and trying to understand it. For example, I've come to the conclusion that there are few if any good examples of which you inflate your way out of debt. Let's start there. I think inflating your way out of debt is a trope. Mike Green called it a trope. You don't think that works? Huh?

Huh?

Give me an example.

Well, I, I mean, look, if you owe a trillion dollars to China and there's 10% inflation in a year or two years or whatever, then you just got a hundred, 100 million or 100 billion dollar discount.

But they're going to run from our debt. It's going to be a total mess. And I think it eventually, I think it eventually leads to defaulting.

Yeah, I, I mean, look, you know.

Well, defaulting, so not inflating away, though. Defaulting is not inflating it.

Well, I just want to say we've been doing this plan really since 1971. But what, what did you say?

Defaulting is not inflating in a way that ultimately is a deflationary event.

Right. Go into that.

Well, if you default on a debt, the money vaporizes. They say that you create inflation by creating money. Right. And you created money by creating debt. And so this idea that you are going to get yourself out of debt by creating debt, this is a fascinating concept. Right. There's kind of an absurdity to it.

It's an absurdity that only the US can pull off.

Well, but we're not pulling it off. But we're not pulling it off. Off. We've got bad inflation, in my opinion, and our debt's going up faster.

Oh, yeah. But, but the question is, how much worse would it be? I mean, think about what we've been doing. We've got $36 trillion in debt. We're increasing it at a trillion dollars every 100 days. We've got.

Great. I agree.

You know, and, and so how you.

Do it is you shrink the government.

Sure, I think that's a great idea.

But that's blocking and tackling. That's not inflating in a way. That's blocking and tackling. Yeah, okay, right. That's a different story. Now, the people who say, oh, we'll just inflate. So I'll say, you know, we've got $250 trillion of unfunded liabilities. Those who don't know what that means. Unfunded liability is a liability which if you project revenues out with rational assumptions, that's what's left that you don't know how you're going to pay for. Treasury just signed off on 175 trillion for just Medicare and Social Security.

My question is, over how much time? 10 years.

Infinity. Infinity. They project out to infinity. So you say, here are the revenues going forward. Here's the, the, here's the obligations going forward. We've got 250 trillion of exposure that.

We don't always carry. That we always carry is forward looking at you.

But, but it'll keep compounding.

Right?

Right. And, and then people say, well, we'll just inflate it away. I say, okay, so we owe $2 million a piece in theory, right? Each taxpayer, crudely speaking, about 2 million. I said, so, okay, okay, you're inflate away. So what you're going to do is take away $2 million of my spending power. What's the difference? You can't just flippantly say, I'm going to flight it away and pretend like that doesn't have the same, arguably even worse consequences. Because it's very disruptive to the economy to have your currency, which is a critical communication channel, supply, demand, media, price. And if your currency shifting, that system breaks pretty fast. And so I really do believe this idea will inflate it away. And then you look for an example and the examples turn out not to work, work. And so people often say, well, they'll say, buy mark Germany. Right? You go, well, first of all, that was a hyperinflation led to World War II, so that's a poor one. But it also didn't inflate away the debt. Because Germany owed its national debt in gold. They effectively through inflation, defaulted on their populace, but their debt to the world persisted. You go, okay, post war United States, they had interest rates 10% below the inflation rate. You go, but you're ignoring the fact that we, we were a juggernaut of productivity and we control something, 40% of the world's GDP. So to separate the idea of inflating away the debt versus American industry just banging it out year after year after year to give inflation the credit seems preposterous to me. There's an Israeli example, I'm not yet clear on how they did it, but it basically spiked up inflation and spiked it back down. And I don't know how they did it.

Yeah, the, the problem is, any example we can talk about other than the US is, is pain. It's not the same thing because they don't have the reserve currency, you know.

Yeah, well, we could lose it too, though.

I, I know. I'm not scared of that, you know.

Well, well, well.

Everybody wants to talk about the BRICs. I don't.

No, no, no, no. But the BRICS is not about a currency though, in my opinion. The BRICS is about alliances.

Yeah, I understand.

Well, and so you got 25 non trivial countries saying we're not with the US anymore.

That makes us as a reserve currency.

How does that play under Trump? That's what they've been saying. Does it change over the next four years?

Well, Trump's going to talk to Putin right away. He probably already has. And Putin has said, look, I want to talk to him. Putin said the other day, I would not be averse to reaching out to Trump. I think Putin would love to get Zelensky at the table to stop that war. And I am appalled how many people don't understand NATO's role in that war, but they don't. So if Putin wants to get to the lenski at the table and he knows that Trump wants to end the war, and so somehow someone's going to put a gun to Zelensky said, here's the deal, we screwed the pooch. Not my administration's problem. Here's what we're going to do. You're going to lose this chunk of meat right here. You get to keep this chunk of meat over there. It's a real estate problem. You know, you understand these, right? We're going to default on the eastern Ukraine and it may not even be Russia's taking it. It might just cordon it off in some way that says quit screwing around. I wish NATO would quit screwing around.

Go back to the point where you got onto that with the BRICs and the Reserve currency. And I just want you to circle back and finish that thought.

So I was on Kitco and they said, well, they asked about the brics and she mentioned the meeting that they had about two weeks ago in Russia. And I said, you just answered your question. I said, we have demonized Russia as best we can. And 25 countries just met in Russia to talk about alliances. They met in Russia. Right. There are 25 very important countries, including some real serious oil producers who met in Russia. So I think this idea that we are king of the world is on very shaky ground. It's not to say we're going to lose reserve currency status, but I don't even know with computers why you need a reserve currency. Why can't you denominate? You have to sign contracts, but every currency is connected in a microsecond timescale. So I can sell you something and you can pay me in Zimbabwe dollars. And if it's all done by computer, I then switch those for whatever currency I want instantaneously.

Yeah. So a CBDC solves that problem. But let's.

Well, I don't like that one either. Right. We both know that's the worst of all the choices.

Yeah. No question about it. Okay. The real question I think we have to tackle, David, is compared to what? Okay, yes, we've got all of these challenges. The dollar has its headwinds, but compared to a Democratic administration, I mean, we're way better, way better now at keeping that reserve currency status and American hegemony. Much better.

Now, here's the deal, though. I think our fatal mistake was weaponizing the dollar. We weaponized the dollar. If we had said, look, the dollar's precious. We don't play with that. It sort of like reminds me, when we boycott an Olympics, you go, no, you're supposed to send your guys to the Olympics.

Right.

We're all supposed to get together. So that. That upsets me. So we weaponize.

Let me just give that some context, if you will. So you know what David is saying? When Russia invaded Ukraine, we weaponized the dollar. Of course, we've weaponized it long before that. But this was the big.

We really got serious.

This was the nuclear missile weaponization of the dollar. Okay. Against Russia. And now every other country in the world is saying, gosh, I could be next. I better not make my whole economy dependent on dollars. So go ahead.

There goes the reserve currency. You just described it well, but it.

Didn'T go away yet. And it takes time.

Yeah, I don't know if it takes a long time. So if you look at something like the euro, the reason the euro took, what, 20 years or something is because it's a very complicated currency. But if the brick says, you know, screw a BRICS currency, we're just going to denominate in gold. They go to the printing press by Monday, they're printed out notes that say, redeemable for 1/10 of an ounce of gold. It's over. If you ask not. You know, I'm not a bitcoin guy. I do podcasts with bitcoin guys. They all want me to buy a bitcoin I'm like a. They're like the guys with Bibles under their arms and my front doorstep trying to get me to join them in Christ on a crusade. And I go, no, thank you, that's okay. But bitcoin guys have the idea, right? At least. I'm just waiting to see what the hell happens to bitcoin, because I don't. I, I think it's not necessarily safe by any stretch of the imagination. But, but it could be that, yeah.

Trump has promised to be the bitcoin president and make a national reserve with bitcoin. I mean, if he does that, it's going through the roof because other nations.

Are going to copy us.

You know, maybe he won't keep his promise. I don't know.

Politician not keeping his promise. There we go.

Imagine that.

News flash news.

You know, I, I give him a pretty good grade on doing that last time around. I think he really did keep his promises most of the time. Let's talk about deregulation, because I think that's going to be a hallmark of the Trump administration. I think he's going to make it easier to build more homes. We have a housing shortage problem. I know you wanted to ask me some questions about. I'm happy to answer them, but, you know, just give us your thoughts on the deregulation. I mean, I think that's just going to untether business and there's just going to be a lot more velocity of money and economy.

Well, I was, I was with a. I was with a lawyer. I remember he sued California for something big. But I had dinner with him and we talked about a bunch of things. And the thing that he mentioned in passing, which I brought up and said, I think was the most important Supreme Court decision in history, or in my living history, was the Chevron deference overturn. To make a long story short, a decision, I think it was in 1938, it basically gave the bureaucratic state the ability to say, if the law doesn't say no, or if it's ambiguous, we can do whatever we want. And so administrative state could fine you, could punish you, could put you in jail. Even that got overturned. And so basically what it said is that an ambiguity in the law or the absence of a statement in the law does not mean that the administrative state, the bureaucratic state started by Woodrow Wilson, enhanced by FTR and grown ever since, can just come in and mow your ass down. Which means that basically, in theory, almost every regulation in the country is potentially susceptible to challenge as unconstitutional.

Wow. Wow.

Now some of them are there because the law says they can be there, but the absence of a statement about the ability to do something has been removed, supposedly. So I said to myself, said, what does that mean? Because you mentioned it in pass. I know this lawyer said in your talk you mentioned passing seems huge to me. And he says, yes, we're just waiting to see how this plays out. Right. This could be like, you know, Brexit, where it passed you Holy moly. And then they just didn't do anything. But you can now, you know, in theory, the IRS could come at you and you can in theory say unconstitutional. Right? You could before even in theory. But. But now the Chevron deference overturn. I don't even know what Chevron deference means. Right. What's Chevron deference? I don't know, but it was a big case. It was a humong case. It got 10 minutes of press.

Okay, so housing, do you believe. I'm sure you do, that we will see a lot more construction under Trump?

I'm not sure part because, and again, this is your world, not mine. But I'm wondering the consequences would be if the very stern licks of the world have to unwind all their positions at some point. It's almost an emergent system for me. Where I go, I'm not sure. Now people are living in those houses and then they get unwound because interest rates, let's say the rates fight the Fed like they're currently doing. Right. Nightmare scenario was previous equity. Bear markets is not a nightmare scenario because I'm in my bunker of doom, so I'm positioned for this. But the nightmare scenario for investors is that we have a bear market in both equities and bonds simultaneously. The Fed has had a luxury for 40 years of not, not letting that happen. So every time the equities go down, the bonds go up and that has saved the 60, 40 portfolios over and over and over. Now the interest rates are going up despite the Fed dropping rates. Rates. And that is what Bill Fleckenstein calls the bond market sort of taking, taking over. So the bond vigilantes taking over, saying, we don't care what the Fed fund rates do, we're not going to lend you money at that rate for 10 year treasuries, we've lost Russia, we've lost China, possibly the Arab countries. Right. Who's going to buy our bonds? And so those rates could keep going up. That would cause Airbnbs to fall apart. Right. Because people can't just hold them at 0% interest rates rate unless they got a 30 year mortgage. But I bet a lot of them didn't because you know, if you can get dirt cheap mortgage, dirt cheap debt, you'll, you'll lever the hell out of it. You know those guys did that.

Number of people with the high rate mortgages or the variable rate mortgages does not exceed about 10 million.

Okay, but how about the black rocks of the world?

What about them?

Aren't they levered up the kazoo?

Oh, well, yeah, I mean their leverage is a whole different type of leverage that I think they could have to unwind it though. Sure, sure. Yeah.

Well, renting single family houses is a lousy business. As he says to the real estate expert, not knowing whether he's right, but, but it's a lousy business. It's just not. The best way to house someone is build a rectangular building that holds 500 people with 800 square feet a piece. Right. That's the most efficient way.

Sure it is. But that market is very oversaturated. It's very, that's right. And well, that will fill some of the void. Yeah. So what David's doing is pointing out that for real estate investors, a big apartment compl has more economy of scale than a single family home. Obviously. Right. We all know.

But I don't think you could rent my house for the cost of owning my house. So I think if you, if someone bought my house and I'm going to rent and make money, I think they're delusional.

How much is your house worth?

It's worth about a million, 1.1 something.

Okay, so your house is way too expensive to be a rental. So if it's, if your house is worth a million, we'll just take that for round numbers. It would probably rent for about 4,000, $4,200 a month, maybe. 4,500, am I right?

But that's a razor thin margin in a high rate environment.

Of course. But I'm asking you if I'm right.

Yeah, I, I would. Well, I, I don't know for sure, but that sounds like a decent hypothesis.

Yeah. Okay, so maybe it rents for five grand if you're lucky. Right. If it's a million, so that's a 0.5 RV ratio and that's a deal I would never recommend to an investor. But if you get a chance, you're.

Supposed to get like a seventh of the, the cost of the house per year. Isn't there some sort of back of the envelope number?

The lowest you want to go is 0.7. Okay? So a million dollars worth of real estate, which should be three or four single family homes in the rental market, should give you overall an aggregate of $7,000 or more a month income. Okay? And you can do that in entry level housing because there's such an acute shortage of entry level housing.

You know, what if the guys who have who got were able to get interest rates in the fraction of a percent category by staying short term and exploiting the Fed's generosity? When those guys have to start unwinding those highly levered, you know, pack huge tranches of single family houses, that's going to change the dynamics, isn't it?

You're talking about the institutional investors, but they're a very small part of the market. Let's talk about some numbers, okay? And no one knows exactly. And everyone calls an institutional investor. We've had problems defining that in the industry. Okay. Some say it's any entity that owns over a thousand homes, but the problem is they have all these sub entities and nobody really knows.

It's a very complicated system.

I know it's hard to. To tell, okay. But the point is, you know, there's about 140 million housing units in the U. S, okay. Give or take. About 80 million of those are owned by regular owner occupants. There are some vacation things.

Okay?

Remember before Airbnb became so popular and, you know, it sort of grabbed its big foothold, I'd say, in 2012 when everybody started talking about it. Okay. Although it was created in 2008, and there was an industry before that, obviously going back to the 70s, but before Airbnb got popular, remember, lots of people with money and means had second homes, Right. That was a normal behavior for, you know, millions of people. Okay.

But especially at low rates.

Right. And they didn't even rent them out. Okay? But when Airbnb came along, they all thought to themselves, well, gosh, you know, if I'm rich and I put my house on Airbnb, my second home, you know, then I could buy another Ferrari, okay? So, you know, I might as well just get some extra income and make my asset work, okay? So everybody kind of became an Airbnb person even if they didn't need to. Okay? So not all of them.

Did that prevent them. But did that prevent a lot of people from having to hit the market with a sale? Did that keep them from entering the seller's market when it was good?

But Airbnb got completely oversaturated, okay? And that market is oversupplied. It's still struggling, as it should be. And you know, look, 15 years ago I was saying this on my show. The great thing about a podcast is you can just go back and listen to the old episodes and see that I'm right. Okay? Because the number of non primary beds in the world, David, massively expanded. I mean, even at the rise of, of the.

Thank you for making my case though.

No, I am making your case to some extent, but it's not, it's not a black and white thing. And we'll be back with a lot more on this topic with this guest on our next episode. Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out the show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that guest opinions are their own, and if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to itunes or Stitcher Radio or whatever platform you're using and write a review for the show. We would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.