2278 FBF: Monetary Policy, Fiscal Policy and Governmental Irresponsibility with Dr. Kirk Elliott (Part 2)

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Welcome to the Creating wealth show. This is Jason Hartman, your host and this is episode number 262. I'm talking to you today from beautiful New York City where I've been attending the Blog World New Media Expo all week and that's been really informative and interesting. Made a lot of great new contacts and I have a few new guests from that show that we will be interviewing later. So I think you'll enjoy that. Today we have the continuation of Dr. Kirk Elliott's interview and that will be up here in just a couple of moments. But wanted to also address many of you have asked us what do we have coming up this fall in terms of events? Well, we are thinking of two events. Number one, we're thinking of a Creating wealth boot camp and a property tour in Atlanta, Georgia. So we're working on that right now for maybe, oh, I don't know, probably early September, something around that area. And then of course our semi annual Meet the Masters event and we are thinking, although it's not confirmed, of holding that in Phoenix. So you'd have the opportunity to look at some properties as well when you attend the Creating wealth in today's Economy boot camp. So those are the two things we're thinking of. Look at the website, look@JasonHartman.com and stay tuned to the show for full details on those as they develop and as we confirm them and have all the details for you. Also, we have been very fortunate lately to get some good new property inventory. We've been suffering, as you probably know as a regular listener, from a shortage of inventory of properties due to the market and due to all of you buying so many of them. Frankly, things have been very, very, very busy and inventory has been scarce. You know, you can never quite get this supply and demand thing just right. It's a constant struggle in our business. But check the website, the property section@jasonhartman.com and I think you'll be pleasantly surprised at some of the new inventory we've been able to obtain in many of our markets, including Dallas, Houston, Memphis, a little bit in Atlanta, not as much as I'd like some new stuff in St. Louis and Indianapolis as well, and a little bit in Phoenix slowly trickling out. So, you know, again, we are area agnostic. We we've got property in many, many different markets. So you can build a properly diversified portfolio of properties that make sense the day you buy them. So that's good news. Also, the call in line, Please use the call in line. We would really like you to do this. Remember, you can call into the show by calling 949-200-8009. Again, that number, 949-200-8009. You can call in, talk to me, get your questions answered for future broad.

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With with all of this stuff going on, what is your prediction of when the crap is going to hit the fan and what's it going to look like when it happens? And see, see, the thing is the thing that has never happened before in history and, and this is the wild card, really. There's a couple big wild cards about it. The reason we're not Greece is because we have the reserve currency. The reason why we're not Greece is because we have the largest military on earth and we also have Very, very abundant natural resources. If the, I'll call them, for lack of a better word, sarcastically, green weenies. Okay, the, the environmental Nazis out there. And you know, listen, nobody wants a bad environment. I don't like pollution any more than the next guy. But you know, I think some of these environment, these things done in the name of environment are really just another form of communism, another form of let's control everybody. Green trees have red roots, as they say. And you know, we've got abundant natural resources in this country. I mean, we have got oil galore that we could, we could drill for ourselves and we could be energy independent for a long, long time to come right here with good old US Oil. But then again, we've got some moose in ANWAR that might not like a pipeline or an oil rig there, when the reality is in Alaska, they sleep under the pipeline because they like the warmth. But I guess they'll be dependent on the warmth. It's just kind of ridiculous. But, but that's why, I mean, I don't know if the US really can collapse. Maybe we can just kick the can down the road forever. When is the breaking point? How does anybody know?

You know, nobody has a crystal ball, so to speak. Nobody does. And so whenever you hear anybody saying, oh, it's going to end this year, they're, they're lying or they're just guessing. I mean, seriously, nobody knows. However, when you look at it, I see us as so close to the edge of the cliff. I mean, literally, you cannot have 84% of everything you bring in as an economy going out towards entitlements and run the rest of your country on 16%. You can't do that when you have defense and you've got all the federal workers and you've got roads and bridges and infrastructure and everything else. It just can't happen forever. And so this is an election year. And the can, I think, will be kicked down the road for the rest of this year. Politicians can somehow pull, pull a rabbit out of their magic hat during election years. They always do. So I actually do think that interest rates are going to soar and go through the roof, but I don't think that it's going to happen this year because it's an election year. But that begs the point of, okay, then there's 2013 and 2014. And really, if I could peg it down to a time frame, I think it's somewhere between 2013 and 2015 that we could see the reserve currency status of our US dollar taken away in exchange for Some kind of like an International Monetary Fund special drawing. Right. Or some kind like the euro, except on a global scale.

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What's a special drawing?

Right.

What does that mean?

It's basically like all the countries put money into the IMF to bail out other nations and so forth. Well, so it's going to be a conglomeration of funds that basically then you draw on that as a currency. I think it's going to be. Basically view it as the euro, except on a global scale. I think a reserve currency like the Chinese currency, one country having it. I think those days are done.

Let me say something. A global fiat currency. You know what I call that? Checkmate. Absolutely, that's checkmate. Because if we have a global fiat currency, then the value of everything, everything we can buy, the price of everything is completely up for grabs to one single power. And let me just tell you, I bet that that power will not be charitable.

No. Because absolute power corrupts absolutely. I don't think it's going to be charitable at all. But this is how it will be marketed. Look, the United States squandered their time in the sun as the reserve currency Great Britain did before the United States had it. The euro is the poster child for a regionally traded currency. Look, they've completely fallen apart. And so they're going to have great marketing behind it and people are going to think it's an attractive deal. It is not. What coming with it is going to be power and control and manipulation, and it's not going to be good for anybody. However, people are going to buy into it. And this is just the way that I think. Just one guy's opinion on how I think it's going to come to be. And I don't think it's going to be good. And I do think that the US Loses that reserve currency status because of our debt situation. Just like we started this show with Greece. The exact same thing I think is ultimately going to happen to the United States. I don't think it's going to be this year. I really don't. However, I do think that we were possibly within two to five years away from this happening because things are spiraling out of control.

Okay, so your view of it is loss of reserve currency status. Is that the first thing that happens or before that does the US government try to seize control of everybody's IRA and 401k. I think that's a strong possibility. You know, a hungry government is always looking for money anywhere they can get it. Or does the US not voluntarily relinquish its reserve currency status? Does it use economic hitmen like John Perkins book Confessions of an Economic Hitman, or does it use its military to throw its weight around and say, no, we're going to be the reserve currency regardless of how poorly we manage that responsibility?

Well, they're going to try. I think we are going to try. We're not going out with without a fight, that's for sure. But I think ultimately it's a fight that we can't win because we have just way too much debt. With $15.3 trillion that's been amassed since 1776 until now, that's just what we.

And 4 trillion in the last three years under Obama alone.

Alone. And then when you start adding up all the unfunded future obligations, things that Congress has already passed like future Medicare and Medicaid payments and Social Security and you name it, all these unfunded future obligations, the number bumps up to I've seen as much as 200 trillion.

I call that the $60 trillion time bomb. But I've heard it, heard people say it might be up to 130 trillion. Either way, it's a hell of a lot of money.

It is a lot. And the reason why you see such huge discrepancies because it just depends on how far out you project it. I've seen everything from 70 something, 200. Well, the reality is it's somewhere in between. And, but this is what we have to come up with down the road. How do we come up with it when it's almost mathematically impossible? Pay back 15.3 trillion.

You know how, you know how we come up with it? We've got to have a yard sale. We've got to sell off some assets in this country because we're just going to be forced to. And we've got to start using our own natural resources and we've got to drill for our own oil, we've got to supply our own energy and possibly export it if we can. And things have just got to change. We have got to exploit our own natural resources as responsibly as possible. But we have got to do it. And hopefully there will be some innovation, some discovery that is, that helps the whole world, that can be exported to the whole world, but maybe the US or the Western world will have control of it. And it will enrich those countries.

Well, we do. And it's energy.

You are absolutely right. We have enough oil and gas in just the western slope of Colorado, in the shale to basically supply our nation for hundreds of years. Let alone you've got the Bakken oil field in North Dakota, you've got the stuff in Alaska, you've got the Gulf, you've got the gas field off of the coast of California. We have enough natural resources to actually take care of our own country and be the largest exporter of oil to the world. And we could be as wealthy as the Saudi Arabia's of this world. It just means that basically we have to come to that point politically where you know what the environmentalists, sorry to say, and I'm with you, I want a clean environment.

Listen, let me tell you, environmentalism is a luxury of a rich society.

Yeah. You know, and that's why I think when we, when.

We hit critical mass, I do think that we are going to start drilling. We just have to, because we're not going to starve to death. And the solution, I just hope that.

We put the first oil well right in front of Barbara Streisand's house in Malibu, California. Let's just put the first oil well right out there a couple hundred feet offshore, right in front of her view. Okay.

Yeah. And the recipe for.

Because she's such a hypocrite. That's all I'm saying.

I agree and you should. And in fact front of you know what, in front of Alec Baldwin's house and everybody else's, you know, but the recipe for success here is to drill so we can actually produce what we have efficiencies in. That's it. And then you lower taxes just like Reagan did in the early 80s. Because what do we do better than anybody else on the planet? We spend money. When we have more money to spend, it's going to have a trickle up effect and the government has to cut spending. Well, what are they doing now? They want to raise taxes and they're increasing spending. That's exactly the opposite of what needs to be done to.

Of course it is. Yeah, it's, it's trickle up poverty is basically what it is. What do you think about. I mean we can't go on forever here. This is an interesting discussion, but what do you think about the stock market? I mean I can't believe the stock market is holding its own like this. It's kind of shocking to me.

Well, it's really what it boils down to is Stimulus money, first and foremost. Where has all these trillions of dollars that have been printed?

They're propping up the stock market.

Yeah, it's going into the banks, just like it's supposed to in Chase and the Citi and the bank of America. But it's a classic liquidity trap. Interest rates are so low and the banks are unwilling to lend it out to consumers and small businesses like they should have. In theory, the stimulus should have worked. If they would have lend it out, we would have spent it, we would have created jobs, we would have done all this. But all that they're doing is creating inflation by printing money, injecting it into the banking system. They are not lending it out, but what are they doing with it? They're injecting it into the stock market, which is why, in light of declining revenues and people losing jobs and everything else, the stock market is still hovering around 13,000. Well.

That is just the tip of the iceberg. The rest of it is, if you look at mutual fund managers, they invest in equities and they have cash positions in mutual funds. Their cash positions have been exterminated. They have gobbled all of them up. So now mutual funds basically across the board are about 100% allocated into equities. They have no more cash to spend, and the US Consumer isn't doing it. So therefore, this is just economics 101. This is just supply and demand. There's going to be very little buying moving forward from here. And this has happened twice before in the last decade. Once in 2000, once in 2007 when the cash positions in mutual funds have been extinguished. And what happened in both of those years, Major stock market correction. And I think we're going to see the same thing in 2012.

Yeah, many people are saying that this upcoming correction is going to be much worse than the one we saw when the financial crisis began in the late latter part of Bush's term. What do you say to people like. And I don't, I have no idea if you're a follower, but people like Harry Dent and Bob Proctor, you know, Elliott Wave, Bob Rector, I've had them both on the show. And as much a fan as I am of Harry Dent, I gotta say, I just don't. I don't buy his deflation scenario.

I don't in the sense that most people buy it now because he does.

By the way, say there's going to be huge stock market corrections. He says, and it'll. He says it will be much worse than it was because part of Dent's philosophy is looking at the demographics. You know, I remember back in the 90s he predicted that by about 2012, starting, you know, around 2011, 2012, the baby boomers will pull money out of the stock market, just demographically speaking. And I totally buy that. I think that's very, very relevant. But he's even predicting more things going on. But he also says gold and silver are going to deflate. And you know, he's like, don't, don't buy gold. He's definitely the anti gold bug. I mean, I'll tell you that.

And I disagree with his deflationist argument because money is being printed like there is no tomorrow and that's inflationary. Now you might have an economic slowdown. You know, for sure you're going to have an economic slowdown. And so some things you are going to see price deflation on when people can't afford it. But the financial metal sector is not one of them. Now where I do agree with him on deflation is if you look at gold and silver as an actual currency, you know, you look back 10 years ago and how many ounces of gold did it take for you to buy a house? More than what it did now. So really it's taking you 4 ounces of gold to buy a house right now. So that is deflationary, isn't it?

Right, right. Yeah, the gold to housing ratio is fantastic right now, folks. So you, you can bring in a lot fewer pieces of gold and buy a house now than you needed back then.

So yeah, in a sense that is deflationary when you look at a true legitimate currency. But everything else is inflationary. So I just disagree with Dent on his description of deflation. I think gold and silver are going to go through the roof and what you can purchase.

But the only question is, are the gold and silver going through the roof or is the dollar just going down?

Both.

Both at the same time. Or you're, you're really just storing wealth or if you will, treading water because you're just keeping pace with inflation with the gold and silver. See, to me, just let me throw this thought out there for you. To me it seems like that the gold and silver have a good advantage in the, for the uncertainty play. World war, geopolitical problems, societal collapse. Gold and silver are good there and then they're also good if none of that happens. And they're good for just general inflation because they're a legitimate measuring stick. And that's why as much of a gold bug as I'm not okay. I mean, I have some, you know, I think it's okay. You know, I don't think it's bad. I think it's much better than money. Right, I. Sorry. Much better than currency. It is money. Currency is fake fiat dollars or euros or whatever. But I don't think that, I don't know that you're really gaining, but sometimes you don't. Look at. Economics is a relative thing. If everybody else is losing ground to inflation and you're keeping steady, if you're treading water and everyone else is drowning, hey, you're ahead. Because if your net worth is $100 and your neighbor's net worth is $50, you're rich.

Right. But if you look back for the last 10 years, let's say back to 2002, the US dollar has lost about 38% of its value, which is a huge amount. I mean that there is no doubt that. But since that time, gold has gone from about $260 an ounce to over 1700, about, you know, about 500% increase. So that is, that is. Yeah. Does gold cost more because the US dollar has diminished? Yes, it does. It takes more US dollars to buy gold. However, gold has been outpacing the devaluation of the dollar by a lot in silver, even more. And so that's why I say it's actually some of both.

Yeah. And I sort of wonder how much of that is the fact that the real inflation, it's there, but it just hasn't shown up yet. In other words, the inflation has already occurred, but the banks are holding on to that money and they haven't released it. But the people who invest in the metals know that the inflation is there. It's just the symptom of it hasn't fully exposed itself. You know, maybe a good way to look at that would be like say you contract a virus, God forbid, right? And this virus, it's in your body, it's there, it's multiplying, it's working, but you're not really sick yet. You still feel kind of okay. And the sickness is going to show up in a few days or a few weeks or you know, I guess some even take longer to incubate. In other words, the inflation is there, it's just incubating and it's on the sidelines because the money has not trickled down into the system yet.

Yes and no. Actually, I think, you know, unofficially, inflation is really hovering around 10% right now. Not the 3 point something percent that the government says it is. CPI is completely bogus. However, when you look at, how do I say this quickly? Okay, In China, for example, you've got warehouses full of electronic goods. There is a global economic slowdown. It's a recession, no doubt people are buying fewer things. Well, we all know when we buy a computer or electronics, for example, they're almost obsolete six months from now. So when they've got warehouses full of stuff, they're going to have to sell it at major discounts to get rid of it before it goes obsolete. So there are some things right now that even in an inflationary environment, we are seeing price reductions on it because they have to get rid of it. But when they have to start remanufacturing some of these things over the last 18 months, copper is up over 80 something percent, steel is up over 100%, oil is going through the roof. The cost of remanufacturing these things once they extinguish their inventories goes through the ceiling. You look at groceries right now, and marketers are tricky, masking real inflation. For example. Let's just use a hypothetical like a box of lucky Charms. The price hasn't gone up at Walmart. However, the box is still the exact same size. But where you used to get 15 ounces of cereal in there, you now have 12.2. People think, oh, the price hasn't gone up. The box is still the same size. It's still the same cost. However, you get 20% less ounces of cereal in there. That's a 20% increase in price.

Yeah, they're just tricking you.

Yeah, they're tricking you. Where they can't trick you is at the gas pump, which is why.

You.

Mean a gallon today is about 8 pounds, 128 ounces. That's a gallon. Okay, so soon a gallon will be 110 ounces, but it'll be more expensive.

You know that they can't trick the consumer on other stuff. They kind of can. And so at some point there, we really do hit critical mass and people realize, oh, my word, the box only has half of what it used to be. Or when you go to the gas pumps, people are going to vote with what they see at the gas pumps, because that is real. There's no masking that whatsoever.

Well, you know, that's an interesting point that you bring up. And I know we're going really long. Maybe we'll just cut this interview into two parts and do it over two shows, if you don't mind. Do you mind sticking with us a little longer?

No, that's perfectly fine.

Okay. What's really scary, frankly, it's not interesting. It's scary is that I heard that for every increase in the gasoline price of 10%, it impacts food prices in the neighborhood of 20 to 30%. So it's got a nasty multiplier effect to the downside for all of us as the consumer, because energy is in every. That energy cost is buried into every single product and service. And so if we are looking at increase in the price of gasoline or oil, it's more expensive to build a house, to build an apartment building, to bring food to the grocery store and to the restaurant, to manufacture all the raw materials that go into building a house or anything else. So it all gets expensive. And my mother said it, it kind of funny when I remember a few years back when gas prices were skyrocketing before, you know, I was complaining to her about it and she says, jason, just buy some oil company stocks. What are you complaining about? And she says, I made a bunch of money with Exxon. I'm like, well, mom, you're kind of right. That's a pretty good idea, right?

I mean, foodflation is going to. It is going to be devastating. And when people are already living at the margin, you know, we are so blessed in this country where we're not.

Living at the margin, most of us, even now. Even now, yeah.

I mean, even a 10 to 20% increase in food prices in this country, what does it amount to? Basically a nuisance, really. What about the rest of the world when 10 to 20% is probably the difference of eating or not eating? And this is where you start to see a lot of global civil unrest when the prices of these things go up because of what you said, oil going up does have a multiplier effect. And this is the scary part. When people get hungry, when people can't put food on their family, even wonderful people can turn into monsters. I mean, it's just, we are going to see that on a global scale. And when people run out of money, just like when countries run out of money, they start to do irrational things. And this is sadly what I think we have to look forward to and not so good of a way. And in the months and years ahead.

I agree with you. Well, any other advice or thoughts that you have for listeners about just kind of anything we've covered or even haven't covered? What else should we be talking about? One other interesting point of it is the Chinese suppressing their currency. I was listening to a commentator recently on one of the news programs. And he was saying we should devalue our currency so we can export more. And I remember watching a really interesting documentary that I recommend to everybody. I mean, I guess it's not that interesting, but it just kind of shows you what goes on in geopolitics or really geo finance. It's a movie called or documentary called Life and Debt and it was about Jamaica and how they made a deal with the International bank and they wanted to build infrastructure and so forth. They had to devalue their currency to encourage exports. And basically what all the companies did is they came in and they hired laborers for much less money. They paid them very poorly in these sweatshops. And what about China artificially suppressing the value of its currency and the US maybe should intentionally do that? I mean, I don't think so, but some people do.

Well, you know, from the politician standpoint, they're going to speak out of both sides of their mouth on this issue. They're going to say they want a strong dollar because that's what gets votes. But really a weaker currency does make your exports cheaper everywhere else. And so they're going to have policies that favor a weaker currency, but they're going to be talking about strengthening the currency. This is classic doublespeak on behalf of politicians. And China is no different. It's in their best interest because they are the exporters to the world to have as cheap of a currency as they can while people are still buying once the rest of the world becomes so poor. And if they weren't buying anything, well then that doesn't make any sense. But because they are still our major, major, major exporters and everybody's gobbling up their stuff, it makes sense for them to have a cheaper currency.

Very true. Not the US Though. Could we turn that around? If we just devalued our currency, everything would get much more expensive for Americans just instantly, which is probably going to happen anyway. But would the equation work? Could you bring enough jobs back to America quickly enough that the equation would work?

That brings up another question, is how do you bring enough jobs back quickly enough? Because the infrastructure has already been set up there. This is just capitalism at its core. You know, cost of lease production is where goods are going to be produced. Well, it's cheaper in China. When China's no longer the cheapest, it's maybe going to go to Africa, let's say. I mean, I think unless you have some kind of a competitive advantage in something, I don't think we're going to get jobs back in this country real soon. The only caveat to that is what we talked about earlier and that is if we open up oil, this is our ace in the hole. This is our area of superiority because we have so much oil and gas. That's what we have to produce. We don't have the trump card on cost of cheap labor, so we might as well forget it. But what we do have is natural resources that we could produce and export to the rest of the world.

Yeah, well, there you go. That's good, Good stuff. So my other question before I sort of got into the devaluation of currency. Any other thoughts? Advice?

You know, when we get to times like this, we have to make sure that, that our lives are right. You have to.

Be spiritually grounded. You have to make sure that you have your paper to asset tangible ratio of your own investment portfolio adequate to basically withstand the inflationary pressures that we are going to see. Having too much paper will crush you. Having too much of anything will crush you. You should never be completely out of balance. Unless we are on the doorstep of hyperinflation. You should not have 100% of your portfolio in precious metals, for example. You know, in a hyperinflationary state you'd be goofy to not have almost all of it in there. But you have to balance off your paper, your real estate, all of your other positions with precious metals and make sure that everything is in balance. When you've got those things in line, well then you know what, you're going to be able to withstand the storm and you are going to be able to prosper and you're going to be able to thrive. If you, you know, honestly, when you ask yourself this question, am I adequately, adequately prepared for a hyperinflation? How much, how much debt do I have? How much? You know, you know, credit card type debt, not the kind of debt you were talking about earlier. Investment grade debt, low fixed rate, long term debt.

That's, and that's investment grade debt.

I'm not talking about that. That actually can help you in an inflationary scenario. I am talking about credit card debt, revolving debt, adjustable rate type debt. If you've got too much of that, oh my word, when interest rates start rising, you are going to get shellacked. It is not going to be a friendly scenario for you and your family. But you know what? This hyperinflation and inflationary scenario, precious metals are going to be your friend, tangible assets are going to be your friend. And so you have to allocate accordingly. And this isn't always the case. You know, precious metals during the 80s and 90s were a horrible investment. Why? Because interest rates were coming down, the dollar was strong, things were booming, people were fat and happy. I don't think that there's really any such thing as a bad investment per se. There's just bad timing for investments, if that makes sense. And so we just have to be students of history, be students of the market, identify the fundamentals that cause markets to move and then act accordingly. And have old rules of the game where when stocks are bad, you go into bonds, and bonds are bad, you go into stocks. And when everything is driven by revenues, right now, those old rules of the game do not work. You have to have tangible assets as a solid, substantial portion of your portfolio if you're expecting to survive an inflationary timeframe.

Kirk, last question for you. There's no academic definition for hyperinflation, quote, unquote. How much inflation are we talking about? What is that? What does it look like? Give people a sense of your. Of course, it's your opinion, Just one man's opinion here, but some people say, you know, hyperinflation, that would just be devastating, would be 20, 25% annually. And I think that's nothing. I think it could be far worse than that. I mean, you look at what's happened in other countries. Yeah. And I'm not talking about Zimbabwe. I'm just talking about countries with resources. Argentina, Hungary, Weimar, Germany. I mean, we could. I think we could easily have inflation at 100% annually or 50% annually.

I would agree. And generally, it doesn't have to be.

2 million percent annually.

No, it doesn't. I mean, that would absolutely destroy everything. But even if you had, there's kind of a general rule of thumb, 20 to 25%, in my opinion, is just inflation.

It's just normal inflation.

Yeah. Now, super inflation is probably going to be anything over 50% up to 100%. Anything over 100% a year is generally classified as hyperinflation. Well, with prices doubling every single year, let's just say that went on for four years.

Wow.

Ridiculous. Imagine milk going from $3 to $6, from $6 to $12, from $12 to $24. That is just 100% inflation. This isn't even millions of a percent of inflation like Weimar Republic, Germany, you know, Hungary, Poland and Zimbabwe. This is just 100% a year for four years.

It's not that. Historically, it's not that much.

It's not. And could you imagine paying 30 to $50 a gallon for milk?

Well, you know, they used to call, or they still call it, they jokingly call Starbucks, they call it four bucks because that's what it costs for a drink. And you look at old movies and you used to see someone saying, brother, can you spare a dime for a cup of coffee? You know, and then it's four bucks, right? Well, you know, soon Starbucks will be 50 bucks.

Absolutely it will.

And it's not funny. This is going to be when people only have when they're like you say, living on the margin and they only have a small amount to pay for stuff, their standard of living just plummets. And think of what happens in that environment. If inflation is just 100% annually and you have a million dollars in real estate estate debt, long term fixed debt in a year, you basically your debts been wiped clean. But then the question is, and I'm sure you've thought of this, Kirk. Well, Jason, if it's that bad, who's going to be able to afford to rent my house from me? Well, it's going to be a different person than affords it. Now. The standard of living will be declined. There will be people that move down that socioeconomic ladder because they didn't play their cards right because they didn't store wealth in tangible assets. You know, and I'll give you this, like the metals, even though I'm not as much of a gold bug, but I agree it's a great store of wealth. It has been for many years obviously. And the people who didn't do offensive things like my strategy and they're going to slip down that ladder several notches. They're going to go from living in a 3,000 square foot house to living in a 1,000 square foot square foot apartment. They're just going to move down. Someone will be there to afford it, but it's just going to be the same person that used to live four times better is now living one fourth the lifestyle.

Or you might even have two or three families, they'll double up.

Yep.

I mean, I mean, and you're right, I look at gold and silver as insurance protection against the collapsing currency. And I'll end with this. If you went back to 1920 when a $20 bill was convertible for one ounce of gold, you could have either actual gold was currency back then. Well, what would that buy you? That same 20 bucks or 1 ounce gold piece which had a twenty dollar face value on it would buy a finely tailored men's suit, a shirt, a tie, a belt and shoes fast Forward to today. What does that twenty dollar bill get you? It doesn't even get you a date night out at Chili's. However, what does that one ounce of gold get you? Gold is worth over seventeen hundred dollars an ounce. It still gets you a finely tailored men's suit, a shirt, a tie, a belt and shoes. See, gold has maintained.

Hey, but Kirk, you didn't tell people that 5,000 years ago that one ounce of gold would bought you a toga and a pair of sandals.

It maintains its purchasing power. It is insurance. It just happens that you've got a double whammy right now because it's growing on average over 20% a year like clockwork for the last decade. But see, this is your insurance policy and it's also right now, right now a good investment. Now over time, it's just insurance policy, but we're looking at it right now as, wow, this is a phenomenal way to protect and preserve everything you've worked your entire life to accumulate. And this is basically what I would kind of summarize. The thrust of this entire conversation that we've had is tangible assets are key to preserving your wealth.

And I couldn't agree with you more. You know, again, you're much more of a gold aficionado than I am. But I definitely see your point. I agree with your premise completely. And I just think you've got to, you've got to control resources. There's only a few ways wealth has really been created. If you, if you look at this world, you control real estate and resources. Resources, that's one. You make money in the media, that's another. And media could be, you know, your Rupert Murdoch or Ted Turner or it could mean that you're a celebrity. Both ways. Media, that's still the media business. Okay. Another way is technology, you know, Steve jobs, Bill Gates, etc. Etc. Way down the list. Or banking. That's really, there's really about four pillars to real wealth. Real estate, resources, banking, technology and media. I don't know. That's kind of how I look at them. And you know, banking is obviously there's a lot of dimensions to it, so we'll talk about that. But, but you know, Kirk, this has been a great conversation and we've gone really long here, so I appreciate you sticking with us. And, and we'll slice this into two interviews, do it over two shows. It's been so interesting. Thanks so much for joining us today. Your website is Kirk elliotphd.com what is your doctorate in?

It's in public policy and administration. My emphasis was on public economics, inflation.

Wow. Excellent. Excellent. Good stuff. Well, this has been fascinating. And that's kirkelliotphd.com thanks so much for joining us today. Appreciate it.

You're welcome. It's my pleasure.

Jason provides an extremely unique service. Deal evaluator. Are you interested in a property outside of our network? Need a second opinion? No problem. Let our expert evaluate the deal. Find out more about it@jason hartman.com.

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