2353: Booms, Doom, and the Real Picture: 2026 Prediction: Looking at the Data, Don't Expect Affordable Housing or a Booming Economy

This show is produced by the Hartman Media Company.

For more information and links to all our great podcasts, visit hartmanmedia.com hi, Sepp.

Bakam from Orange County, California. I thought the Empowered Investor event was amazing. This is actually my second time attending. Last one was about 14, 15 years ago. It's a great event. Awesome. Speakers talk about everything from investing to property management to finding great teams, tax legal strategy and all types of like creative software solutions to help make investors successful. Investing out of state where the numbers make sense. Just a great opportunity, great networking and just great conversations. Hear from the speakers at the front of the stage and also during the breaks and during the lunch hours and the networking receptions afterwards. It's neat because there's a lot of the macroeconomics that gets talked about, but instead of just being pessimistic and getting scared and waiting on the sidelines, you can hear from other investors and speakers and local markets specialists where they can help you see the opportunities through the weeds. Right? Like yeah, there, there's headwinds, but people are still going to need housing and you know, they're finding great opportunities in the local markets to be able to share with the investors. And yeah, I highly recommend the events. Whether you're brand new to real estate investing or you're a seasoned investor, it's definitely worth the investment. I think if you're on the fence about coming to the event, you know, you got to look at in terms of if you can get one idea, one relationship, just one epiphany out of it, it pays for itself and it's pretty certain that you're going to get something out of it. You know, just because everything is changing so fast when it comes to tax law, when it comes to the economy and right now tariffs and a lot of headwinds going on. So it's really important to get around with investors who are smarter than us, who are further ahead and who are still finding opportunities. Right. The neat thing is that challenges us, it challenges our investment thesis so that we can actually embark and not just be on the sidelines and not just get hammered by inflation. So definitely think it's worth it.

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.

Greetings, empowered investors. Today we're going to talk about booms and doom and gloom and get it all straightened out as to what is the real picture in terms of what's going on. We've got some amazing news on interest rates and the directional stuff that we've talked about before. And I want to start off with this video from Brian Kim. He is a very famous YouTuber and you've probably seen his stuff around. I know some of you watch his stuff. You know, again, he's not a housing guy. He's a, he's a tax guy. But he does have some insights and I definitely want to share those. So let's start off with that after this. I've got a whole bunch of stuff to show you. I'm going to make a few comments on this video, but I think it makes some excellent points. So here we go.

In today's video, I want to give you a housing market update. We're going to cover home prices, mortgage interest rates and what you can expect in the near future. So about that, what you can expect in the near future, that's just going to be my opinion, what I see coming, but it's going to be based off the facts I'm going to show you. Let's begin with home prices. Here are the metro areas where home prices have fallen over the past 12 months. If the bubble is darker red, that means that home prices have fallen more in the metro area. You can take a look at the scale in the top left. If you noticed most of the declining metro areas are coming from the south. I mean, take a look especially from Florida and also the West Coast. Now I want to show you the metro areas where home prices have been going up over the past 12 months. And as you're taking a look at this, it's going to be the same concept. If the bubble is a darker blue, that means that home prices have risen more in that metro area. You can take a look at the scale in the top left. And as you can see, there are a lot of markets where home prices have gone up over the past 12 months. However, the heaviest concentrations are in the Midwest and Northeast. Okay. So of the largest 300 metro areas in the U.S. home prices have gone up in 195 of those markets and home prices have gone down in 105. Okay, so I showed you each metro area on the map, but now I want you to take a look at the national average. So take a look. Home prices are up by 1.7% over the past 12 months. But listen, if home prices are down, like if you're going to tell me in the comments like home prices are down 10% in your area, I believe you, but you have to understand that somewhere else. They're up by 11.7% and this is what it averages out to on a national scale. Okay, so I'm going to give you a prediction for next year, 2026. It's going to be based on the facts. But first I want to show you what's going on with mortgage interest rates because of course that's going to play a big role in the housing markets. Mortgage interest rates have been falling, but why is that and how much lower are they going to fall? This is the average interest rate on a 30 year fixed. We are near 6%. Okay, so sure, it's nowhere near the 3% and the sub 3% that some people are fortunate enough to get about three or four years ago. But of course it's much better compared to when we were flirting with 8%. That was back in late 2023.

Okay, so rates were super low during the COVID era, then they went way up and now they're trending down nicely. And I gotta tell you, our business has picked up quite a bit since we saw these mortgage rates decline, you know, about, I don't know, I think the pickup started maybe six, seven weeks ago, something like that. And we are going to see much further declines. So that is going to be incredible news. But again, this in here, these low Covid era rates are why we didn't have a crash. Because these people just won't give those rates up and they won't dump their houses on the market. They're staying put. And we've talked about that over and over again, but now it's not.

It's on a downward trend. It's been on a downward trend in 2025. But why is this happening and what can we expect? Mortgage interest rates have been falling because the Federal Reserve has been cutting interest rates, their fed funds rates, and because inflation is not raging hot. Now when I say that, I mean.

Relatively speaking and because of the employment picture. And we're going to talk about some big employment news, or should I say unemployment news in just a few minutes.

Compared to two, three years ago. Okay, but I can't just leave it like that because there's a lot to unpack here. First of all, the Federal Reserve does not control mortgage interest rates. So here's how it goes. When the Federal Reserve cuts interest rates, it affects interest rates on short term government debts the most. Now I just want to emphasize this part, so I've said this before, but I just want to remind everyone, mortgage interest rates are correlated to the interest rates on the ten year government debt. So when the Federal Reserve, when they cut their fed funds interest rates. Yeah, it's going to help to lower mortgage interest rates somewhat. So that's why we're seeing a moderate decline in rates. Not we're not seeing like a plummet. But you have to remember that we're just talking about interest rate cuts. So Fed rate cuts. The Federal Reserve has other tools to lower mortgage interest rates. Now I want to give you my expectation the Federal Reserve will be ending their monetary tightening cycle very soon. Word on the street is that maybe even this month. Now it's my expectation that the Federal Reserve will continue cutting interest rates and they're going to start their quantitative easing cycle in 2026.

Wow. Okay, just make sure you understand the significance of what he just said, which by the way, I agree with. I think it will come early next year, the QE cycle. But the rates are coming down before that. They're already coming down. And folks, you know what I've talked about, you know that study I did that shows you how many millions of new potential would be home buyers will be able to qualify for the median price home with these lower rates. It's absolutely shocking and incredible. Based on the very low historically speaking amount of housing inventory. We have just under 850,000 homes for sale. And wow, these millions of people come into the market, we're going to have bidding wars again. Now granted a lot can happen. Nobody knows for sure, but this is the most realistic picture of what is going to happen. You know, there may be something that sidetracks it. When exactly things will happen, nobody knows. But all the stars are aligning.

And what is this going to happen? It's going to happen when something needs to be bailed out. Like who knows, is it going to be the banks, commercial real estate, the stock market? I mean take your pick. It could be Q1, it could be Q3. I would be surprised if they make it to Q4 without heavy easing.

Massive amount of pressure on the Fed here to save the commercial Real estate market, because we know the commercial market is extremely different than the residential market. Office properties are a disaster, a lot of multifamily disaster out there. And that interest rate, those mortgage rates and that quantitative easing or tightening that we've had, right. That affects both markets, but they're going to be very unequal. This is going to benefit the residential market in terms of lots of really good returns for investors coming our way. And it's just going to save the commercial real estate market from absolute devastation. And we've, we've talked about that a lot before.

Okay, but what does all this mean in plain English? It means that mortgage interest rates will continue going down. Listen, when mortgage interest rates drop meaningfully, that's going to be the best time. I mean, that's going to be your opportunity to refinance or to lock in your mortgage, your mortgage interest rates. So you're gonna have a window of time to capitalize on the situation. So I expect that time, that window of time to be a few months. In other words, when mortgage interest rates bottom out. Like, of course we don't know when that bottom's gonna be, but you're gonna have a few months to take action. I'm just saying, just don't dilly dally for too long. Okay? Why am I saying this? It's because once the Federal Reserve does their balance sheet expansion or their money printing.

Yes.

I mean, of course, like, it's not a surprise, inflation's going to follow. But inflation lags all the money printing. And once inflation starts catching up, when it starts spiking up again, then mortgage interest rates are going to shoot back up. That's because the 10 year yield and the 30 year yield are going to shoot back up when inflation is raging again. And listen, I'm talking to the people, mainly to the people that have mortgage interest rates locked in at 6% to 7%. For those people, they should definitely refinance. Like, you have to strike when you get the opportunity. If you're already locked into a mortgage interest rate of around 3%, maybe even sub 3%, then you don't have to worry about any of this. Now, circling back to home prices, it's going to be the same story. Like, I just want you to just think about it practically and just logically. The Federal Reserve will be cutting interest rates and they're going to be printing trillions of dollars. Okay. I mean, of course it's going to cause more inflation. Like inflation in prices of everything. Food, utilities, home prices. Like home prices are not going to be immune to this. Okay, so why would home prices crash if the Federal Reserve is going to blast on the money printers and print trillions of dollars and you know inflation's coming.

Exactly. I mean, it sort of seems like these doomers out there, the Crash Bros. That we've talked about so much, they must be either just like Jerome Powell, our Federal Reserve chair, totally behind the curve, right? Do they still think it's 2008 or do they still think it's even three years ago? I mean, three years ago you could argue now they were wrong and I was right. Okay, but you could argue that they had a point. We are now way late into this cycle and the market hasn't crashed. It has gone up steadily since we had the highest, fastest interest rate increases in history. And the market has been totally resilient. Now granted, like he said, and like I say, well, what I say is all real estate's local. Of course it's uneven. I'm talking national stuff here. You know, if you're in Austin, Texas or if you're in Punta Gorda, Florida, you've seen prices go down, you know, 12, 13, 14%. That's not a crash, because a crash would be 20, 25%. Okay, so it's not a crash, but it definitely hurts, right? And people have noticed that. And there are some other markets that are not too great either. But at the same time, we see a lot of other markets appreciating. So the overall average is up. It's not up much. It's been pretty boring. It's been pretty muted. But we can see the incredible resilience even after tripling the cost of money, only because there is such a shortage of housing.

And you can read this headline from 2022, you know, home prices just so, you know, hit an all time high this year in 2025. And if you think, okay, well, if home prices keep going up, then nobody's going to be able to afford a home, therefore home prices can't continue to go up. You know, my response to that is like, seriously, like, is that what you're thinking? Is that what you truly believe? Like, have you seen home prices in California? Like, have you seen home prices in New York City? Like, if it can happen there, it can happen in your hometown too.

So you know, what he talks about is he's making a really good point, right? Decades ago, everybody said nobody could afford a home in New York City or in some of the main California cities. Yet prices kept going up and people kept buying homes. They weren't the same people necessarily, and incomes definitely did not keep up with home prices. So there are different kinds of buyer profiles that were still able to buy in these markets. But the point he's going to make about the institutional investors coming up, because I've watched the video already, is quite interesting as well. But think about it. When I noticed maybe this was about 28 years ago, okay, when I was in traditional real estate and I owned a traditional real estate company in Southern California, Coldwell Banker bought it from me 20 years ago. But about 28 years ago, I remember really noticing that the Housing Affordability Index was very flawed. And it was flawed for many reasons, which I've talked about on prior shows, but not for a long time. I think the Housing Affordability Index published by the national association of Realtors is like my third favorite index. It's pretty good, but here are the gaping holes in it, the big flaws, okay? And that's why my second favorite is the hpi, the First American Home Price Index. And my first favorite is, of course, the Hartman Comparison Index, the hci. Anyway, back to the Housing Affordability Index, number three on my list. Number three. So this compares the median mortgage payment to the median income in an area. That's essentially what the index is. It's a little more complicated than that, of course, but that's the basic idea. Now, that seems pretty logical that if a lot of people can afford the median mortgage payment, hey, that's going to pump the market, and the market's going to go up because they're going to buy houses. And if people can't afford it, the market's going to go down and they're not going to buy houses. And that's going to cause a glut of inventory and a lot of supply on the market and very few buyers absorbing that inventory. Okay, great. That seems perfectly logical. But think about the giant flaws. There are some real, real flaws in that index. Number one, it does not include foreign buyers. So when I was in Southern California, we had this huge influx of foreign buyers from South Africa, which they were escaping the socialist disaster known as South Africa, sadly. Right. What a great country. It used to be, but turned into a complete disaster. A lot of Chinese money was flowing in, or just Asian money in general. Right. And a lot of Middle Eastern money was flowing into California. So the Housing Affordability Index doesn't take into account their incomes, their level of wealth or anything. Right. This is fdi, Foreign Direct Investment. Okay? That's one factor. But the other factor that it completely missed is the People who had been players in that market for a long time. So I'll give you examples. The typical person, like, you know, mid level or even lower level person on the socioeconomic ladder in Irvine, California or Newport Beach, California, okay, they weren't making any big income, but guess what? They bought a condo a long time ago and then they traded that condo for a house and then they traded it for another house. And they've been doing this for, you know, 20 years, right? Every, you know, every six, seven years they moved and they moved up to another house and they gained so much equity over the years that their mortgage balance was maybe only half of the value. So they were just simply trading equities. They weren't paying the mortgage payment on the median price house. They were paying a much lower mortgage payment because they had so much equity to trade. And the Housing Affordability index completely misses that phenomenon. This is why it's so important to really peel back the layers of the onion, as it were, to really understand what's going on and why certain indices are just completely flawed. I mean, I've talked about the flaws in the Case Shiller index many times and that's one of them. But let's keep going.

Situation can get worse. So to answer your question, who's going to be able to afford a home? To answer that, I think the answer is easy. People like BlackRock, you know, they're going to be.

BlackRock is going to be able to afford a home, right. And they're going to rent it to other people. And this, this reflects the massive number of institutional players coming into the market. Right. Again, it's not a takeover. They're far from owning the market. Okay? They are very, very far from that. But they do have the biggest presence they've ever had. And so it is something to pay attention to. So BlackRock can afford your overpriced house. Right. And they'll just keep the whole cycle going because the Fed will ease and pump money into BlackRock and all of the big institutional players out there.

Your new landlord. So listen, I'm telling you, if you can buy a home now, I would buy a home. Like I'm telling you, the housing situation is just going to get worse. And can it get worse? Yes, of course it can get worse. Now here's something.

When he says worse, he means worse in unaffordability, higher prices. That's what he means by worse. Right? Better and worse. Depends on which side of the equation you're on. Right? It's worse if you're a Buyer and prices are high and affordability is low. But it's great if you're an owner and prices are high. Right. And you know, you can equate affordability in many ways. Right. But anyway, I want to show you.

No surprise foreclosure activity is going up.

Not by much, but it's going up.

It is rough out there. I know you've been fed the propaganda that the labor market is solid, unemployment is near record lows, the economy is booming. We are in a golden age. I am skeptical. I believe it's nuts. I believe that income.

We're going to address this in just a moment. I got some good stuff to show you. Stay tuned.

Has not been keeping up with inflation. I believe that the labor market is worse than what the government has been reporting. I believe that we're already in a recession. That's why I'm not surprised that we're seeing this foreclosure activity ticking up. However, if you're expecting foreclosures to trigger the next housing market crash like it did in the previous housing market crash, I really want you to take a look at this data. Okay? So, sure, foreclosures are going up, but they are nowhere close to where we were during the last housing market crash.

I mean, if you're listening to this on audio and you're not seeing this chart, it's mind boggling. And I've shown you charts like this before. This shows how, you know, we saw dramatic foreclosure levels during the Great Recession and a lot of properties that never even reached foreclosure. Right? And then that just that slope went way, way down. During COVID we had moratoriums, so it went to basically essentially zero. Okay. And then it went up and it's just bouncing around this very, very low level. Remember when I was on. I was on another podcast a few years ago, and they were all, you know, attacking me and saying the market's going to crash. And Jason, you're wrong. And of course I was right. But I was being my nice, humble self, okay? And I jokingly said, yeah, the foreclosure rate is really spiking. Last year, there were 12 people in the United States who were in the foreclosure process. Now there's 17. Of course I was joking about the numbers, but that. You get the idea there's like nobody in foreclosure. Okay. And I'm going to show you another chart on this in just a moment. It's just a nothing burger, right? It's just a nothing burger. So far, you know, that could rise, of course, but very, very unlikely given all of the circumstances we have now.

You're not even at the level of foreclosures that we were in 2005. If you're waiting for foreclosures to spike so that home prices crash, you're going to be waiting for a while. If you go from this level of foreclosures to the peak, that's about five years of waiting. But did you know that's when foreclosures peaked? Home prices didn't bottom out until 2012 in the last housing market crash. So that means that you may be waiting another eight to nine years for the bottom of a housing market crash.

If it happens.

If you wait eight to nine years, then can you imagine, like how much home prices are going to go up by then? They're probably going to be still much higher after the crash than they are right now. This is when it would be a bad time to buy a home, when foreclosures have already massively spiked up. And it's basically telling you, like giving you the warning that home prices are going to crash. Maybe we'll get there in four years, maybe we'll get there in seven years, who knows? So if you're going to be looking at foreclosures to judge when the housing market crash and the bottom is going to take place, then I'm sure that this information is going to be somewhat helpful to you. So I'm just giving you the facts, which is why I'm saying that I believe that if you can buy a home right now, then I would buy a home. That's just my opinion.

And you know, he's just speaking to homeowners. But what if you're an investor? Of course, if you're listening to this, you're an investor, right? And you can go buy 10 more houses and you can take advantage of all of the things Brian is Talking about times 10. You can 10x all of these benefits.

And one thing that really bothers me is when people say, well, if you buy a home, then you lose because you have to pay property taxes. Like, oh, there's all these expenses and stuff. But I just want to point out the fact that when you rent out a home, if the property taxes go up, your landlord just passes on that cost to you. Like I hope people understand that. Yeah, well, at least the people that.

Keep making, like I've always said every company and every property is a pass through entity. They're all pass through entities. Now granted, they don't pass through immediately, but they do. Ultimately. You might have a one year lease on your house and your insurance goes up or your taxes go up or whatever. Right? You can't raise the rent that month. Okay? You as the investor have to have some staying power and you have to be more mature about it. And you have to wait to get your return, but you ultimately will. All you have to do is look at history and look at the simple logic of the marketplace. Supply and demand balance the arguments.

Listen, I just want to say that buying a home to live in, it's not really an investment, at least not that's my perspective. That's how I see it. It's not a get rich quick scheme. It's about owning your own assets to protect yourself from inflation. So it's very straightforward. Like this reminds me of one of my friends was renting during the pandemic and they raised his rent by 40% overnight when his lease expired. And they said that that's the new rates, you can accept it. Otherwise we have renters that are ready to take your, to take your place.

And that's how rents were going up. We all know that. We reported on that many times during the pandemic and right after it, you know, for like the following year, rents were skyrocketing. And now I know rents have been a little bit soft. We've had a record number of new apartment deliveries that are competing with and taking from the single family home market where these renters, a lot of them would be single family home renters and wanted a single family home, but the apartments were just making such good deals and still are, but that is kind of evaporating now that they are stealing some of our rental demand. But that ain't gonna last very long. Okay, I give it about six more months.

And I just want to end by saying this like I wish for affordable housing, for a solid labor market, for a booming economy, but I mean, I just don't expect that for 20, 26. I'm looking at the situation, I'm looking at the data, and honestly, I just don't see it. That's just my opinion. You can let me know what you think.

Okay, so let's look at some stuff to follow up on Brian's video. Thank him for that. Go check out his channel. So look at this single family, serious delinquency rates. Now, serious delinquency again is someone who's 90 days or more behind on their mortgage payment. Okay, and on this chart we've got Freddie Mac and Fannie Mae, the two biggest players on planet Earth in the whole world in the mortgage market. And things were bumping around at half a percent below 1%. And then the Great Recession hit and we went up to like 6% for Fannie Mae and about 4% for Freddie Mac. And then they just steadily plummeted and plummeted way down to Covid. And a lot of people during COVID did moratoriums and some just defaulted because there was a moratorium on foreclosures. But what I'm saying is they did workouts where the lenders would just let them not make payments or lower their payments. And all of these programs, we reported on it ad nauseam during that time. Okay, so then they couldn't move them out. Right? And so no foreclosures, foreclosure moratorium. So people just what they do, they just defaulted. Okay. But immediately when that ended, the serious delinquency rate plummets again. Just immediately. Like, look how fast it just drops. And then we get into normality again and still below 1%, you know, about half a percent. Right. This is about the same thing we had. Even lower than 1998, 99. Lower than 2000, 2001. Right. About the same as that on up to the Great Recession. So here's the interesting headline. This is from Bill McBride. I subscribe to his paid newsletter, Fannie and Freddie. That's Fannie Mae, Freddie Mac, the two biggest mortgage market players on planet Earth. Single family delinquency rate increased in September. And you see what the increase is. It's like nothing, okay? But it very slightly increased. Okay? It's almost not even worth talking about. If you're not a housing analyst and you're not a nerd who's analyzing every little thing, you wouldn't even think about this. It's not even worth reporting on almost for any kind of, you know. Well, it is because the media loves bad news. If it bleeds, it leads. Right? But look at this. The sub headline, multifamily delinquency rate highest since the housing bust, excluding the pandemic. That's during the Great Recession. Right? And so the multifamily, completely different picture than the single family market. Okay, now let's look at some more doom. But maybe it's not really doom. And I'm going to get to that in a moment. Let me give you the bad news first. And you've probably read about this stuff in the media. It's on the news. The Fed is poised to cut interest rates and markets will Go much higher. There's the good news. But why is the Fed poised to do that? Well, the rates are definitely going down and now we've got a big reason to make it happen. And that is a lot of layoffs. Check this out. Okay. Recent layoff announcements. And you probably heard about these ups, 48,000 employees. And by the way, they never tell you compared to what? Isn't that so frustrating? So I had to look this up. I had to look it up this morning and do the research and find out what that really means. Let's take Amazon, because that's a company we really think about. So they laid off up to 30,000 employees. I think they laid off 14,000 employees. And then there's some talks about laying off up to 30,000. Okay, I don't know the exact details, but whatever. So I looked it up and you know, I thought, gosh, if Amazon only has 90,000 employees, are they laying off a third of their people? No, that's 4% of their workforce. 4% again, yeah, it matters, but it's not like the end of the world. You have to think about things in percentages because a percentage automatically answers the question. Compared to what? Right. The life's most important question. Intel 24,000 employees. Nestle 16,000. Accenture 11,000. Ford 11,000. Right. And on and on. Meta 600 employees. Meta overspent. You could tell that was coming when Zuckerberg was offering AI engineers $100 million to come to work there. I mean, just complete absurdity, right? So now they're laying off those people. But plus they're normal people. But they've laid off some of those expensive people too. I mean, why wouldn't they? They're too expensive to have around. Right? You know, that was just, that was just craziness to recruit people. Well, he could. Right? Okay, so now this gives the Fed great cover to start cutting interest rates. And Powell can save face right now. He has a reason. So, Anthony Pompliano's newsletter, the Fed is poised to cut interest rates and markets will go much higher. Now, mostly he's a stock guy. So he's a stock and a crypto guy. You know, he's a big bitcoin fan, right? You rarely see more than 100,000 employees being laid off. When stocks are hitting all time highs and companies are reporting record earnings and year over year growth rates are accelerating. This explanation, explosion of productivity is coming as a direct result of technology making companies more efficient, which will only continue in the coming years. I'm going to give You a new way to think about this in just a moment. So the Fed can ignore technology all they want, but it won't change reality. And the reality is that interest rates will have to continue falling in order to address labor issues. Well, what does that really mean? I want to just remind you about all of the so called experts, the technology experts that were looking at all of the technology that was about to expl. I mean the 60s really was an amazing decade. Aviation, lasers. I mean all the aviation records we broken around the 60s and you know, the space age and laser technology and the predecessor for the integrated circuit, right, was right there. 60s, 70s. And then we hit, we hit the stride, right? And all these experts thought productivity will increase by so much that people can just work two or three days a week. Well, that was the prediction, right? And that didn't happen. Why? Why didn't it happen? The productivity increases happened, but mostly those gains went to the companies, not to the employees. So there's always the big fight between capital and labor. That will be a never ending, never resolved war between capital and labor. But it wasn't just that. And you know, last night, you know, I love watching old TV shows, old movies, reading old books, listening to old music. I'm an old soul. And last night I was again watching Alfred Hitchcock and also another one of my favorites, Columbo. Columbo was just the most brilliant salesperson ever. The detective, right? The most unassuming guy. And people let their guard down around Colombo. But anyway, you get to peek inside people's lives. Now, I know it's Hollywood's version of it, but you get to look around their houses like a typical house in those days, right? Where people lived how they lived, what they had, what material things they enjoyed and what their lifestyle was like. And guess what happened? The technology improved productivity and people could have worked less. But us humans, we're just never satisfied, are we? And us humans wanted more. We wanted more gadgets, we wanted more gizmos, we wanted more stuff, we wanted more vacations. I mean, you look at these old TV shows and it was like a big deal for people to be going on vacation. Only the upper middle class and the rich were going on any elaborate vacations, okay? Everybody else was staying pretty local. You know, they drive down to the Jersey Shore, they go to the beach, you know, whatever, right? That was a vacation. Now a vacation is going to Europe, Asia, Dubai, whatever, right? It's extravagant. I mean, life has gotten so much materially better, like we can't even comprehend it. Nobody will Acknowledge it. Right. Read the Rational Optimist by Matt Ridley. It's such a great book. I've talked about it before. You know, everything just keeps, keeps getting better and nobody appreciates it. Right? So anyway, there's that right now. I don't mean culturally because I think culturally things have gotten a lot worse. I think it's a disaster when you look at the culture war, but materially, things have gotten a lot better. In short, AI will replace today's cubicle farms with an economy made of humans. And when the dust settles, we're probably looking at a temporary half percent rise in unemployment while people shift into new jobs. Jobs that are more soul nourishing, whether hand building chairs or tending bar. And going by 2,000 years of history, jobs that ultimately pay much better specifically because of the background automation. In other words, the automation and the technology makes the job easier and better and lifts people out of the mundane. Okay. In the near term, this transfers wealth to blue collars and away from journalists. And a lot of these layoffs, by the way, especially at Amazon, were white collar layoffs. It's interesting how the dynamic is shifting. Maybe that hot girl who wanted to bag the lawyer as her boyfriend will now appreciate the plumber a little more. Right? So it's changing, right? Because those are the harder things to automate. It's changing, right? In the long run, it makes our economy more humanized than the soul crushing cubicle farms that future generations will look upon with pity. What's my point here? Okay, what is my point? Well, let's just go a little further into this, right? So here are some automation waves throughout history and the approximate start dates and the primary impact area. Really interesting. Okay, this is fascinating. I think this came from Shapiro's newsletter. I can't remember right now. Controlled fire, okay. 1 million years BCE okay, that's a long time ago. That primary impact was energy substitution. Stone tools, 2.5 million years ago BC Manual Labor Extension. We could do things better, faster, easier with tools. Domestication of animals, 9,000 BCE labor substitution made it easier to have the ox help us plow the field than for us to do it by hand. Agriculture in The Neolithic Revolution, 8,000 BCE food production got much better. Pottery in storage, 7,000 BCE surplus and time shifting, right? We could store things, we could store food, we could store liquids. And it helped us shift time plow and draft animals. Okay? Agricultural labor, 4,000 BCE writing and numbers, right? And you know that documentary I talked about years ago on the show? I had several of you email me about that I think it was just called maths with an S. That's the way they say it in Europe, I guess. That was fascinating. 3200 BCE information processing, water wheels, 200 BCE mechanical labor was saved. Right. Sail powered ships, 2000 BCE transportation got better. Horse collar and iron plow, 500 CE. Right. In the common era. So after Christ. Okay. Agricultural productivity, mechanical clock, 1300 A.D. okay. Labor coordination. We could coordinate labor much better if we had mechanical clocks and people could keep time and make agreements. The printing press, of course. Gutenberg. Right. The 1400s. Windmills, the steam engine. Look at all of these people in their day, during this time in these different points, I'm sure freaked out and thought, oh, it's going to lead to mass unemployment. I mean, why wouldn't they think that? Of course they would think that. But somehow everybody figured it out and they figured out that they would just want more stuff as productivity gains got better. I mean, isn't this actually the point? Isn't the point to work less or to work more meaningfully? I mean, think about it. What does AI really replace? Right? It replaces the mundane task of answering emails and doing spreadsheets. The cubicle farms. That is the modern version of mundane menial work. Although people think, oh, those are information sector employees, they have to be really intelligent. And yes, that's all true, but this is not like the soul nourishing work these people really want to do. Okay, so you know, I can go on and on, but we're running out of time. I'll cover some of this stuff on a future show and I want to cover some more housing stuff too, but we're just out of time today, so I got to run. Okay, we will have of course another masterclass coming up the second Wednesday of every month. Always join us for those pro members and if you're not a pro member, go check out empoweredinvestor.com and join us in our pro group for our once a month small group Zoom meetings where we help you self manage, we help you with every aspect of your investments and your portfolio and so forth. That's Empowered Investor Pro. And until next time, happy investing. Thank you so much for listening. Please be sure to subscribe so that you don't miss any episode. Be sure to check out this 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.