CW 968 - Jim Puplava of Financial Sense Newshour, SALT Taxes, Inflation vs Dis-Inflation, Medicare & Social Security Debt

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.

Well, thank you so much for joining me today for episode number 968. 968. This is your host, Jason Hartman. And today we have got a guest that I have been wanting to get for many, many years, and that is Jim Pablova. You know, I started listening to his podcast years ago when I started podcasting. So what are we talking about, 2005, maybe early 2006, something like that? Anyway, it was a long, long time ago in a galaxy far, far away. Hey, I think I heard that before. Maybe it was on like Star wars or something like that. Anyway, okay, so that's going to be a good interview. Coming up here in a moment. But investors, I've got to ask you, are you excited? Are you excited about the new tax plan? Well, it just keeps getting better. Keeps getting better? Well, the plan didn't get better, but the articulation and understanding of the plan is getting better. It is getting better. So as I sit here in San Diego, California, and I was thinking about it and I've been reading about all these different things, and I'll tell you one aspect that is pretty darn exciting. And I hope I'm getting this right because I almost can't believe it. It's just too good to be true. If we got any CPAs out there listening, if I'm getting anything wrong, hey, fact check me. Always, always, always. And hey, feel free to fact check. Well, not fact check, but opinion check and disagree with me. You know, you can go to jasonartman.com ask and instead of asking me something, which you can do as well, you can ask some questions. You can give me a hard time. Okay, you can argue with me, you can tell me. You know, Jason, your political ideas are so bogus. I don't know where you even come up with this stuff. Hey, you know what? Listeners. Maybe some of it is just for entertainment value or some of it might be to get you a little riled. Yeah. Or some of it, hey, it might just be me because I'm riled. I'm a curmudgeon, a complainer, some, from time to time, you know. So anyway, hey, but the new tax plan, wow, it's so good. It's so good. Okay, so bonus depreciation on our real estate. We all know that depreciation, it's the coveted holy grail of tax benefits. Why is it a coveted holy grail? Because it is a non cash write off. It is a free phantom write off, a phantom deduction where you don't have to write a check to get the benefit. Right. For any other tax benefit, you basically got to write a check, okay. To get the benefit, you want to deduct some expenses. Well, if you're an independent contractor or you own your own business, spend some more money, write a check, make a deduction, fine. If you want to donate to charity, donate to charity, take a deduction, fine. That's all well and good, but depreciation is a different animal. It's a different animal and that's what makes it so beautiful. Now, in this way that we're going to talk about it here in a moment, one of those is the totally different animal type of depreciation. And one of them is a really just allowing you to expense it rather than depreciate it over a long schedule. So in both ways, they're both good. They're both really good. This thing is great for real estate investors. And as I told you during the campaigns, the presidential campaigns, I said if Trump becomes president, he will be what? He will be our first real estate president. Our first real estate president, at least in modern history. Okay? So under the old law, if you were going to do a major improvement to your property, say you got a single family home, it's a rental property, and you're going to replace the, you know, the heating and air conditioning unit. You're going to replace some of the other major systems. You're going to, you know, do a new roof, right. And you could depreciate these on a single family home over 27.5 years on residential property, on commercial property, hey, it's 25% worse, basically, approximately, because you got to depreciate it over 39 years. And we all understand the time value of money. The time value of money. I would rather have the benefit of the deduction sooner rather than later. And I'd Rather put off expenses into the future. I'd rather spend money later and receive money now. This is the basic concept of the time value of money, which it plays into inflation or deflation discussions. Right, the time value of money, obviously. Okay. And. And then we look at my earliest mentor and teacher on the subject of inflation. Who was he? He was a cartoon character. He was Wimpy and Popeye. And Wimpy had a famous saying. Wimpy used to say, I'll gladly pay you Tuesday for a hamburger today. Or maybe it was a cheeseburger, I don't remember. I think it was a hamburger. I'll gladly pay you Tuesday for a hamburger today. Now, we all know Wimpy wasn't going to pay you at all, right? But he was putting off the expense into the future and taking the benefit the hamburger today. Right. And hey, that was a pretty good philosophy. It still works today, many years later, after the Popeye cartoon was created.

Right.

So Wimpy understood inflation and he taught it to me. And he taught it to probably millions of other people. I don't know if they picked up on it. I sure did. Anyway, yes. Here I was, probably 7 years old, watching a cartoon and thinking, now I understand the time value of money. I can do a net present value analysis, and I can understand inflation and deflation and monetary and fiscal policy all at age 7 by watching Popeye. And then I would go eat my spinach and be really strong. Okay, enough of that. So we'd rather have the benefit today. Right? So commercial property, never as good on the depreciation schedule as residential income property. But. But wait, there's more. As they say on those cheesy infomercials at 2am when you have insomnia. Under the new plan. Under the new plan. Thank you to our first real estate president. Hate him. If you want this new tax plan. It's really good. It's really good. So under the new plan, the bonus depreciation rules allow you to make these things deductible. You can deduct. Now, fact check me on this, but I am literally reading something that says instead of deducting that new roof or that new H Vac unit, through normal depreciation schedule, you can deduct 100% in the year it is added. Whoa, Katie, bar the door is the. The old saying goes, right? That is in freaking credible for real estate investors. Now, the next time I get an email from some of our investors and they're complaining about some big expense they had on a property, I want them to calculate in their head their tax benefit and understand that the government is essentially a what? Well, it depends on your tax bracket, depends what state you live in. It depends on a few things. But the government is essentially an approximately a 40% partner in any losses you have. But you get 100% of the value of the improvement to your property. Right. But the government pays for about, depending on tax brackets, et cetera, about 40% of the cost probably for most people listening.

Right.

So that is a pretty awesome deal. Pretty awesome deal, right? Wow. If there's any CPAs out there, and I'm getting this wrong, I mean I'm, I'm reading it. Okay. So you know, and everything on the Internet is of course true. So it must be true because I'm reading it like everything on cnn, the Communist News Network is true either. Right? Yeah, it's you. There's truth is hard to come by nowadays, folks. It really is. But we have got a very bright and interesting guest today, Jim Paplava, who will talk to you about some truths in the economy. So let's go ahead and get to that guest. I'm in San Diego now, but I am headed up to San Jose here in about a day and a half and I will see a lot of you this weekend at Jason Hartman University live. If you want to get some last minute tickets for that. We have not sold out yet because we've got our big presentation on Thursday night. So we probably will sell out Thursday evening. That's Saturday, March 3rd. Jason hartmanuniversity.com and by the way, for our other really cool high end Mastermind Ad Venture alliance trip coming up at the Ice Hotel in Sweden. That's going to be pretty exciting. And I just booked my airfare and folks, I cannot believe, I cannot believe how cheap, what a bargain airfare is to Stockholm, Sweden. It's an incredible deal. So if you want to join us for the Ice Hotel trip, go to Jason hartmanicehotel.com Jason hartmanicehotel dot com and check that out. We'd love to see there or this weekend in San Jose. It'll be warmer in San Jose, but it's not that warm. It's a little chillier in California. Okay, let's get to Jim Paplava, our guest today. Great interview. You're really going to love this as he shares a lot of good insights on the economy. And you know, there are very few podcasts that I'd actually recommend. His is one of them. I'd recommend my own and all my other podcasts because they're good. Because, hey, look who's doing them, right? A lot of podcasts out there, they just suck. They're junk, junk, junk, junk. Waste of time, don't even bother. And some of them are big famous podcasts and they're not very good, at least in my humble opinion. But Jim's is good. The Financial Sense News Hour. I like his show again. I listened to it during my formative years of podcasting 14 years ago, I guess. Right. So I've been listening for a long time to his show and I think he'll share some good insights. It's great to finally have him on the show. So here he is.

It's my pleasure to welcome someone I have been following for many, many years, and that is Jim Paplava. He is founder and president of Financial Sense Wealth Management and host of the financial sense NewsHour. And I started listening to his podcast maybe 15 years ago when I started podcasting about, well, 14 years ago. And he's had a big impact. He's got some very interesting insights into the economy and the markets. And I just can't wait to have him on the show finally today. Jim, welcome. How are you?

Very good, Jason, good to be with you.

It's great to have you after all these years that I've been listening to you. You know, Jim, you've got some great insights into the economy and the markets as I mentioned in just want to talk to you about those. So here we sit with a still a relatively new administration. We've got a huge tax reform and I think that's going to have a negative effect on a lot of these high priced, well, markets like, you know, my home state, the Socialist Republic of California, and I know your state and New York, these, these sort of high tax areas that have been driving a lot of the producers out over the years kind of slowly as people vote with their feet. Do you think this will accelerate that exodus or, or have much of an impact? What do you think about that? Let's dive in with the tax plan first.

I think it's definitely going to have an impact on real estate here, especially on the high end, maybe not so much on the, the low end, real estate. And it's also going to have an impact on businesses and individuals leaving the state. As you know, you live here, it's a state of basically two classes of people, those that have money and those that don't. And the situation is getting much, much worse. I interviewed one of the nation's top tax attorneys out of Los Angeles and he said, you know, he had been experiencing, many of his clients were leaving the state. But he said he has seen an acceleration in the last couple of years because as you know, Jason, they raised tax rates in 2010. Then they came back 2012, they raised them even further. We are now the highest tax state in the country. Now, that was okay if you were in a high federal tax bracket because you could deduct your property taxes, your state taxes. Well, now you've got a limitation of $10,000 on property taxes, which is next to nothing since property taxes are high here. And then if you're in a 13.3%.

Oh, you're just getting killed.

You're getting killed.

Yeah, it's unbelievable. It is yet another of the many examples of the disaster known as socialism. And we're galloping toward it in some areas. But interestingly in some ways we're moving away from it, thankfully after eight years under Obama. I mean, Trump is such an odd bird, you know, it's, it's hard to figure him out for sure. Maybe that's intentional on his part. But I do think as we see this sort of issue with the salt areas, the state and local taxes and forth, that is going to be a further incentive for people to leave or to not purchase high end homes. And by high end, we just, you know, of course, mortgage interest now over 750,000 will not be deductible. And in a place like California or New York, hey, that'll barely buy you a shelter, you know, so.

Yeah, it's probably just a storage unit.

Exactly. It's a pretty significant attack. Any more thoughts on how that might play out for us?

Yeah, there's a book I read a couple of years ago by the credit analyst Meredith Whitney.

She's been on the show. She's great. Yeah, the state of the states.

Yeah, yeah. And she was talking about there is going to be this reverse migration. I mean, if you take a look at, Since World War II, it was kind of like go west, young man. And everything was moving towards the Midwest and then to the West Coast. And she's talking about a reverse migration now where you, you have people on both coasts start to move inland to areas like whether it's Arizona, it's Texas, New Mexico, places like that where the cost of living is cheaper. You've got, and you can see this right now, you've got some of the high tech companies, were they opening up new factories. They certainly aren't doing it in California, they're doing it in San Antonio, Austin Texas. And they're doing it in other places of the country where taxes are lower, cost of living is lower, regulation is lower. And I think this trend is just going to accelerate as a result of this tax bill. Because up until this point, states like California or New York or New Jersey or any other high tax state, well, you know, the high end people, they could deduct that on their federal tax return. Well, no more. And I was just reading, in the state of Connecticut, one hedge fund manager moved himself, he was a billionaire in his whole hedge fund operation to Florida. Well, the state of Connecticut lost $200 million in tax revenues. And you know, that's what's happening here. But what do they do? As you know, Jason, they keep coming up with more taxes. Last year they raised the tax on gasoline 20 cents, raised the tax on cigarettes and cigars by $2. Then on top of that, if you were green and you bought yourself a hybrid, then they raised an extra hundred dollar vehicle fee. And now they're talking about for those of us that have solar powered homes, raising some kind of fee or an assessment on us. So in my own opinion, they're headed for bankruptcy because they have a pension fund that is unfunded to meet its obligations and they're scurrying around every which way they can. Whether it's assessments on, you know, your car, it's cigarettes, it's gasoline, they're just reaching everywhere they can. I mean, if it moves or breathes or walks, they tax it.

Yep, that's true. And this is the, you know, this is why I had to leave California. After living there virtually all my life, I left in 2011. There are so many hidden taxes in terms of things like traffic tickets. And a government that basically, Jim, becomes predatory as it becomes desperate, it becomes predatory on the citizens. You know, the government has gone into business against the citizens and they look for the low hanging fruit, you know, and they always do it under the guise of public safety or whatever. They'll always have a reason.

Right?

That's just what they do. But you know, the question is how much will people tolerate and what will be the ultimate outcome? So I mean, California won't really go bankrupt, right? It'll get a federal bailout. It'll. What will it do? I mean, you know, like what, what's the end game here for the, all of the states that are in this predicament? And it's not just California by any means. I mean, a lot of municipalities also are in trouble. And we, we saw some municipal bankruptcies in effect, I think it's kind of different how they do it, but the concept is similar. What's the end game? I mean, I think it would just be a federal bailout. You know, print more money and just bail them out. That's what they'd have to do, right or wrong.

You know, one of the things I'm watching, there's going to be some court cases coming up in Illinois and they have a severe pension problem. And as you know, with bankruptcies here, with any of the cities, the bondholders got the shaft and the courts would always uphold pensions as sacrosanct. And I think that's going to change. I think you're going to see eventually, just as defined benefit pension plans went the way of the dodo bird in corporate life, you're going to see it at the government level. Governments simply will not be able to sustain the type of pensions and salaries. I mean, one of the things that you see here, and this was brought up in a recent study on the cost of education, there are so many administrators, and one of the little things that they do here is say, I'm an administrator, I don't know what I'm doing, but I'm getting paid a quarter million dollars a year. Well, what I do is about five years before retirement, I retire, receive a pension, they hire me back as a consultant. Now I'm making double the money and I double dip five years before I retire.

Right, right. On the national level, you've talked a lot about Social Security. And Basically I think 20, 27 is the number. You know, I've had Lawrence Cutlikoff on the show a couple of times. And you've, you've probably interviewed him as well, I assume, and he's done a lot of studies about the unfunded entitlements, unfunded mandates coming at us over the next 15 years. And boy, that's gonna be interesting.

I mean, I think eventually what they're gonna do is if you take a look at Social Security, it was tax free. And then in the Social Security reform in 1984, it became subject to 50% taxation. Then under Bill Clinton became subject to 85% taxation. You know, eventually they'll go to 100% taxation and then they'll go to some kind of means testing. If you make X amount of dollars, you lose so much of your Social Security benefits to the point you, if you're Larry lots of bucks, they just basically phase it out.

Well, you know, we've seen this. People are moving to Puerto Rico. You know, there's a huge tax incentive there of you may not have electricity but save a lot on taxes. I just sort of don't know what comes of this. I mean, is there going to be a significantly inflationary future? Inflation seems to be the greatest business plan for governments because they can just continue to buy votes, they can spend, they can mismanage and they can just inflate the problem away. You know, it's like boiling the frog slowly. Right? Is that our future? And I don't know where you stand on the inflation deflation debate. I mean, you know, maybe I did years ago, but don't know recently. Your thoughts?

You know, right now you still have a disinflationary force and that's coming through technology or what I call the Amazon effect. And you also have, Jason, the fact that even though the Fed created a lot of this money by buying bonds, a lot of it stayed on the balance sheet. Banks holding that money with the Fed. So you have not seen the kind of credit creation that we had leading up to the housing bubble that was driven by, you know, heavy mortgage debt. But I think some point in the next decade, and it's inevitable at this point because you have 70% of the government's budget is Social Security, Medicare and interest on the debt, which leaves only 30% for defense and discretionary spending. Well, that's on automatic pilot. And if you look at the Congressional budget office for 2019, the government's fiscal year, which will begin in October this year, they're already projecting a trillion dollar deficit.

These numbers are insane.

They're crazy. And that number could get bigger because They've got this two year budget deal that's going to increase spending by 300 billion. Now they're talking about infrastructure spending. And so you add that to the fact 10,000 baby boomers retiring every single day, what is that doing? It's putting more strain on Medicare and Social Security. That is going to escalate and that is going to increase. You add that to interest on the debt. I mean, you know, Obama was one of the luckiest presidents because he doubled the national debt from 10 to 20 trillion. But every single year, Jason, the interest that the government paid out on the debt actually went down. So his last year in office, the government spent $20 billion less in interest expense at 430 billion then when they did in 2008 when the interest on the debt was 450. Now you have rising interest rates and you have two factors that are kicking in.

So you're saying, you're saying hang on one sec. You're saying Obama got lucky simply because he was in a declining rate environment or was there more to it than that? But don't, don't.

He was in a declining interest rate environment because I don't think Trump will be as lucky.

Yeah, it's true. True.

I agree. Yeah. Because you just take a look at the average interest rate. If it goes up 1%, you know, that's $200 billion more in interest expense. So, you know, it's not going to be too much further in the next couple years. We're going to start seeing the government shell out 6,700 billion a year in interest expense. That's a lot of money.

Insane. It's. You can't write fiction this good, Jim. It's just crazy. It's just these, it's just, it's nuts. But the question is, you know, people have said this for a long time, these kinds of things, right? I mean, I remember I had Howard Ruff, I believe he passed away. But you know, he's been on my show. You know, there have been a lot of these kind of like doom and gloomish predictions for decades now and they just haven't come true because they can keep kicking the can down the road. And it never seems like to use another saying, the chickens come home to roost. You know, like, when's that gonna happen? Or is it ever going to get. Maybe they, maybe we can play this game for the next hundred, two hundred years. I don't know.

I think it's somewhere around the next decade because, you know, if you take a look at our debt levels compared to gdp, we still have the best looking house in a bad neighborhood.

Yeah, right, Right.

So we've got further to go on this. I mean, just look at Japan. I mean, take a look at their debt levels. Look how long they've been able to get away with this. So I still think it's probably, you know, maybe within the next 10 years. Because at that point when you start getting into trillion, trillion And a half, $2 trillion deficits, you know, I'd like to see what they're going to do in the next downturn. Because if we're at a trillion dollars next year with the economy growing, with unemployment at the lowest level, what does that deficit look like when we actually get into a recession? When people lose their jobs, revenues decline for government and expenditures with Medicaid and unemployment and all those things go up, you know, we could be looking at one and a half, $2 trillion deficit.

Okay, so what does this Mean, does it mean inflation? Does it mean they'll print their way out of it as usual? That's always the answer is it just blows my mind, Jim, every time you see a G7 meeting, a G20 meeting, anybody meeting, right. Davos, the answer is always increase the money supply. You know, that's the answer to every problem, right? Throw gasoline on the fire, you know, now granted there's a contraction going on right now and you know, we'll see if they can manage that. So it's a soft landing. Of course the history isn't good on that. As you say. Ultimately it just seems like that's the only business plan, right, Is to just increase the money supply.

I think when you really start to see the inflation kick in, I mean, you know, you heard about the Fed's balance sheet going from 800 billion to 4.5 trillion, but a lot of that didn't get out through the banking system in the form of credit. It remained on the Fed's balance sheet. When I think you see the full impact of an inflationary Fed is when the government says, you know what we're going to do an infrastructure program, we're going to spend an extra $200 billion a year and the Fed will just come in and monetize the debt, right?

And so that's inflationary.

That will be inflationary government spending more money than actual production of goods and services. And it is being monetized. And you know, we really haven't seen that yet. So that's why I think when we look at this, inflation is in our future and you know, whether it will get to some kind of crisis where it's not being able to be funded and the government is forced into a straight jacket, much like Great Britain was. And you know, whether we go the route of Argentina, you know, I think that's, I don't know if we're going to see that before something else happens in its place.

Yeah, interesting stuff, interesting stuff. So what's kind of the strategy? Like what do you think people should do? You know, are people want inflation? I mean, you know, it made like philosophically I hate inflation, but as an investor in income producing real estate, I love it because inflation, you know, of course it's a good hedge. That's the simplistic overview that everybody knows. But more importantly, inflation basically pays down the debt for you. You pay your debt back in cheaper dollars or really your tenants do. So it's something I call the double inflation arbitrage, which is, which is fantastic for real estate investors. Is like this hidden wealth creators, inflation, but it's pickpocketing everybody else. It's not good for society, but it does appear to be really good for income property investors. Thoughts?

You know, I like real assets, whether it's real estate, whether it's, you know, things like precious metals or quite honestly, stocks. And I think we're in this period right now where stocks are the advantaged investment. And we've seen it, you know, since this economic recovery. And I think right now is we're just about ready to go into what I call the final sequence of a topping process. We've seen the bond market has already peaked and stocks are still going full head of steam. But there's something we're watching very closely. We're watching the dollar which has been declining since January of 2017. And if you look at the summer going back to June and July last year, you saw oil start to take off, you saw base metals start to take off, and you're seeing commodity related stocks start to take off. What we haven't seen yet is the real breakout of what I call the commodity currencies. Australia, Brazil, Canada, but they're rising. And so there's a subtle shift here. But the leaders in this market are still what they were leading up to this last correction. Consumer discretionary stocks, technology stocks, industrial stocks, they're still in a leadership role. What we're watching is for that switch to start suddenly taking place where you start seeing energy and commodities start moving into a position of leadership, which is what you do towards the end of the business cycle. We saw it happen in 1999 and 2000. We saw it happen again in 2007 and 2008. So that's what we're watching right now. And I think the most dangerous thing that your listeners could be doing is this passive bubble in what I call index funds where it's mindless investing. You take 90% of the trading on the exchanges, algo traders and index funds. Well, you know, those index fund investors got a taste of what it's going to be like in the next downturn. In the correction that we just went through.

Talking about a downturn, do you think we're going to have another sort of great recession, if you will, or a big downturn or will just be the typical run of the mill, you know, recession that happens on the business cycle. And you know, depending on what you think about that question, what would be the cause? Is it simple contraction of money supply? Is it? There are so many factors.

You know, I think eventually the Fed is going to raise interest rates. One of the things that we think is an anomaly right now is you have massive stimulus coming in at the end of a business cycle. You typically see it at the beginning. At the same time you've got a contractionary monetary cycle. They work best when they work in unison. So I think this next downturn is going to be, Jason, relatively mild. And the reason I say that is they just increased in the budget $300 billion of additional spending on the military social programs. You name it, they're spending it. And then what they're going to do is they're going to put in place a trillion to a trillion and a half in infrastructure spending. Well, you and I know the way Washington works with bureaucracy, you know, environmental laws, it takes forever to get something in place that is shovel ready. You know, they're going to pass this, but it'll take a couple of years to implement. So, you know, when we get into the recession, coming out of that recession, you're going to see massive government fiscal stimulus coming in the form of infrastructure spending that will carry us through into the next cycle, which will be more inflationary than the previous one.

Yeah, yeah. It begs the question, how does this affect, affect the largest demographic cohort in American history that is going to be impacting the economy in a huge way shortly? And that's the millennial generation. Of course, the too much talked about and way too much catered to generation of millennials out there. 80 million or so strong. They've got incredible student loan debt, which talk about a scam. That's just an epic scam. The whole call it, I call it the college government industrial debt complex. I mean, what a scam that is. You know, tuition prices and so forth. They're in a somewhat anemic long term overall economy, I believe, but they are going to eventually inherit some money. But then you look at these stats about how, you know, huge swaths of the American population have less than $1,000 and they're saving account and nothing in an IRA or save for any kind of retirement. And combine that with the Social Security problems coming our way and it just really, as all these factors coalesce, it just really makes you wonder how things are going to work out, especially for the millennials. And you know, I mean, the baby boomers changed everything, of course, and they're slightly smaller than the millennials, but hugely different set of stuff, circumstances.

I think you have the makings of a very disenchanted generation. And the scary thing is, could it be revolutionary Because a lot of these people, as you just mentioned, are out of college with huge debt with degrees that are not appropriate for getting a job in today's high tech society. And we've interviewed a couple people that are starting the equivalent of what I call apprenticeship programs where you don't go to college, you go through.

I heard that interview. That was great. Yeah, yeah, good idea.

Yeah. And I think that is going to be more. If the millennials are saved, it'll be through programs like that. Because, you know, the typical millennial that goes to college comes out with a degree that, you know, you can't get anything, a decent paying job or the skill set. And the other thing is this entitlement mentality is harming their basic job skills. I know a consultant who works with corporations to handle millennials because, you know, he was telling me about one gentleman that basically decided not to come into work for a couple days and didn't bother to call. So it's, it's, I don't know, it's going to be a big wake up call, I think, for many of these.

It's interesting. I mean, we can look at all this stuff and in the comments context of history, certainly it's, it's hard to argue with this. And, you know, I have another theory I've been working on, Jim, and it's that the millennial generation, in a lot of ways, they have a better life because of the sharing economy, because of technology. I mean, things are cheaper and dramatically better. I did not grow up with an iPhone, okay? These millennials grew up with iPhones in their back pocket, right? You know, if I could have a television set and the access to information that they had that just was second nature to them and totally, you know, they felt entitled to and expected. If I could have that when I was a kid, it would have been like my dream come true to be able to watch TV in the car or watch videos in the car as mom was taking me around town or something. Right? So in some ways things are dramatically better because of technology. Right? And the access to information and resources through the sharing economy. Rides with Uber and Lyft, et cetera, et cetera, bicycles on demand, all these kinds of things. But you wonder what's going to win in the, in this war. And I look at it as a war between bad government, fiscal, central bank policy, right. And technology on the good side, right? Technology is a deflationary thing, force. But everything the government and the central banks do is an inflationary force. And I'm not saying Government, singular. It's governments, plural, Just all around the world. So how do we know who's going to win this war between the two? I think that really determines the future. And just to give you a little more to chew on here, the theory I'm working on is that the millennials, even though they have a better life in a lot of these ways, what technology and such, they aren't entering the, in what I call the investor class the way my generation, Gen X did. They're not buying their first home at age 24 or 26 very often. They're still living with parents right now. They are entering the housing market, but as a percentage overall, it's much lower than before. They don't have those stable corporate jobs that are paying high wages that prior generations had. You know, with all this asset inflation we've had, I don't know that they're really able to enter the investor class. And if you project that out 10 or 15 years, that puts them very far behind. Add to that student loan debt and all the other issues, it's hard to figure out where it's going with that.

Well, you know, the thing about technology, you look at the millennial lifestyle, my less than, let's say the boomer lifestyle, you know, that they're content to take Uber instead of own a car.

Right.

They may be content to own a small apartment in the city versus a house in the suburbs.

Right.

And so it's a different in terms of human needs and wants from material possessions. It's a different type of, you know, the iPhone is probably more important to them and earbuds then, you know, having nice clothes or a nice car to drive.

Right.

The other thing too is they're, they're going to be inheriting some money.

Yeah, Right.

So it'll be interesting. Now we have apprentice ships in our organization. We have three millennials that work for us. And Jason, I can tell you, you know, a lot of it is upbringing because these people are an ambitious, they're hard working.

Yeah.

And it's almost like an anathema to the generation model that people think of. So it's going to be interesting. But I'll tell you, I think you're going to see a lot more convulsions, a lot more volatility in the next decade because we are now reaching critical mass when it comes to debt. You know, we're going to be at 21 trillion. And starting next year, we're back to trillion dollar deficits. So that number can climb very quickly. And it's going to be interesting because I think it's going to put a cramp in terms of the government's ability to do things that it wants to do. And the only alternative it does want to accomplish or spend money, it'll have to be monetized and printed because there simply won't be the tax revenues there to support it.

Yeah. Yeah. We shall see how it all goes down. Jim, give out your website and tell people where they can find you.

They can come to our website. It's financial sense. That's sense with s e n s e. That's financial sense.com good stuff.

Good stuff. Any closing thought you want people to hold on to before you go?

We haven't seen the final leg of this upturn in the market yet. Believe it or not, we've got tax rates and tax stimulus kicking in on top of that government spending and stimulus. So it's only going to end when the Fed does what it always does does, which is crash the airplane.

Yeah.

It would be funny if it weren't so sad. So I don't mean to be laughing, but you know, there's, there's some, there's definitely some truth to that. Jim Pava, thank you so much for joining us. Appreciate it.

You're welcome. And thanks for having me on your program.

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