INFLATION NATION - It's getting ugly! LIVESTREAM with Jason Hartman
In this live broadcast, Jason Hartman warns that the current economic environment is creating a widening wealth gap, driven primarily by rampant inflation. He explains how massive fiscal stimulus and the Federal Reserve’s money printing have devalued the dollar, leading to price spikes in commodities such as lumber, copper, steel, and petroleum, which in turn are inflating housing costs. Hartman introduces his trademarked concept of "Inflation‑Induced Debt Destruction" (IIDD) and advocates a "Packaged Commodities Investing" strategy that pairs long‑term fixed‑rate debt with commodity exposure to profit from double inflation arbitrage. He also critiques enhanced unemployment benefits for discouraging labor participation, causing service shortages, higher prices, and shrinkflation across consumer goods. Hartman emphasizes that while the U.S. benefits from its reserve‑currency status, the standard of living is eroding faster than in recent memory. He repeatedly urges listeners to download his free "Pandemic Investing" mini‑book, follow his prior content, and consider his investment approach to protect wealth, while previewing a separate mortgage‑market update to be released later.
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Foreign. Welcome to episode 1685. I thought I'd do the intro portion of today's show live because I haven't been with you live very much. So it's nice to be with you. And thank you to all of those who commented. Even before I came on live, this was just an impromptu live event. If you're not subscribing to the YouTube channel with over 2 million views, be sure you subscribe and click the bell for notifications so I can. Well, so I can notify you or really, YouTube can notify you whenever I do one of these impromptu live sessions. So let's dive in. Oh, folks, I don't know, I gotta tell you, things are getting bad out there. Bad, bad, bad, bad stuff. But I'm saying bad from the perspective of it being bad for most and really great for others. But I think even though it's good for me, my own self interest, right? This economy is great for me, but I'm not happy. Why am I not happy? Because I think we are just massively increasing the wealth gap. Covid has, has just. It has made the rich 54% richer in a year. In a year, 54% richer. And mostly, well, not completely. The poor are getting poorer. Certainly in other countries. That is happening in the U.S. it's kind of mixed because these enhanced unemployment benefits have been so high that people are making more money sitting at home on the couch than they would going to work. I mean, talk to any small business right now and they will tell you that our stupid government's plan has simply made it impossible to hire people. They don't want to come to work. They don't want to come to work. I mean, why come to work when you can sit at home and just do nothing and earn more money? You know, if, if, if someone is in the lower rung of wages, it's a better deal to stay home. So these incentives have just got to end. They have just got to end. But we'll see what happens. But here's what I mean about the wealth gap and why I think things are getting ugly out there. Comes down to one word. A word I talk about very, very often. What is that word? Well, you know what that word is? Yes. You know what that word is? It is inflation. And inflation is becoming severe. It is becoming very, very significant. So let's talk about that and let's talk about a little bit about what's causing it today. By the way, for those of you who listen to the podcast, part two of this episode will be a Mortgage Update, where Adam interviews one of our lenders and talks about what's going on in the mortgage market. And you know, look, folks, this is why the rich are getting richer and you know, mixed on the poor end. Some of the poor are actually getting richer too. But mostly it's just bad, right? Because what they don't see is that, you know, all of these benefits, all of these unemployment benefits, enhanced unemployment, all of these government bailouts, obviously right away it seems great because hey, they got extra money, the check is bigger, but then the inflation comes behind it. It's, it's, it's, it's kind of. Oh, I don't know what to compare to. Maybe I'd compare it to my youth when I lived in the ocean in the Pacific Ocean. I basically lived there in the water and I used to boogie board all the time, did a little bit of surfing. But surfing is hard work, let me tell you. Surfing is a lot tougher than boogie boarding. But, you know, I would do mostly boogie boarding, right? And you know, before there's a, a big set of waves, it's usually pretty calm and the water draws out a bit. Certainly this is true before a tsunami and the water draws out a bit and then this big set of waves comes, right? And that's what you're just loving because the big set of waves is a lot of fun. And that's what's happening with inflation. I mean, we had sort of the water draw out, meaning the deflation of the currency as you print more currency. Every currency unit in existence already has to decline in value because, you know, two things, right? Two drivers for the value of anything. As I've talked about many times, economic scarcity or scarcity and utility. Scarcity and utility. So these are of course Zimbabwe dollars. One of my podcast listeners sent these to me years ago. One of these is 50 trillion Zimbabwe dollars. And here's 100 trillion Zimbabwe dollars. And they're basically worthless, right? So scarcity and utility, that's what creates value. So when you make more currency units and you don't, you know, you have a limited amount of goods and services, you're just going to get inflation. And let's talk about that because it is very severe. So I talk about inflation induced debt. Dest. This is a term that I trademarked years and years ago. And what it does is it basically tells you how to play the game, how to align your interests with the most powerful forces the human race has ever known. Governments and central banks, Governments and central banks being the most powerful forces the human race has ever known. So what do we do? Right. Well, we use commodity investing, packaged commodity investing, along with debt, long term, fixed rate debt. And that is the ultimate, what I call the double inflation arbitrage. And inflation is looking severe, like very significant. And it will impoverish most people. And it will make some, it will make the few people, the small number of people who get it. It will make them much, much richer. And that's the group I want you to be in. So that's, that's what I try and help people do, as I've been teaching about this for the last 18 years. So take a look at this chart. Consumer spending drives US GDP growth in Q1, 20, 21. Everybody is spending money. Now look at, this is the opposite of the doom and gloomers, right? All the doom and gloomers predicted the end of the world last year. And what they didn't realize is that of course, our rich uncle Jerome Powell, chairman of the Federal Reserve, would step in and crank up the printing press and he would just create more currency units out of thin air, more dollars out of thin air. And that would have a hugely stimulative effect on the economy, as it always does. But it can't last forever. Nothing lasts forever. Eventually, someone has got to take the punch bowl away and the party ends. And it ends with a big ugly hangover. And that hangover is called inflation. And that's exactly where we're going. So things, in some ways, you know, I kind of hesitated there because it's, it's very uneven, in some ways look really good. And in some ways they are just profoundly dangerous warning signals that what we are doing cannot possibly work them in the long run. We cannot kick the can down the road forever. I always forget to ask this. And since we are live, I need you to do something right now. Push the like button. Push the like button right now. Come on, folks. I see, I know how many of you are on. I see all of you listening. I see you folks in your underwear. Yep. Or I see you with a dress shirt on top and boxer shorts below. Right. That's how people are at home. So I need you to click the like button right this second before we go on and let's dive into this. Okay, so housing starts are rising despite the cost to buyers. And these costs. We've talked all about lumber prices and here it says, although housing starts are rising, lumber prices have skyrocketed in the past 12 months, causing the average price of a new single family home to increase by $35,872 according to the National association of Home Builders, the NAHB. Now that's lumber. And everybody's heard about that by now. But, but I'll bet you, I'll bet you the next time this report comes out, okay, it's, it's monthly, we will see that this has even become more pronounced, more extreme and those lumber prices. Maybe the next time we hear this report, when we get a fresh, a fresh report, we'll hear that the NAHB is saying that the average new home has now increased by $46,000 or $42,000 or whatever it is. And I talked to one of our clients, Bruce, who's in the lumber business in a multi generational family lumber business here in Florida selling lumber to home builders. And he's got the inside track, if anybody's got the inside track. He does. And he has really just, just explained that it's not because of supply demand shock due to Covid shutdowns that has resolved. This is real demand. And this demand is causing significant home price inflation. And that looks like it's going to continue. Now I teach a strategy called PAT Packaged commodities investing. Packaged commodities investing. Which means you look at when's the last time you had cake? Did anybody celebrate a birthday recently? Did you have some cake? Well, the cake is made up of ingredients. Well, guess what? So is the house, so is the home. And it's made up of ingredients. And what are the ingredients? Of course, they are steel, lumber, petroleum products, copper wire. And copper prices are going through the roof. You know, copper is a really important commodity. It's used as a measuring stick by all the experts in commodities, the commodities brokers. In fact, they respect copper prices so much as an indicator of what is going on, they actually gave it a nickname. You know what they call it? They call it Dr. Copper. Not to be confused with Dr. Pepper, it's Dr. Copper. Okay? Dr. Copper is a big indicator. And it's not just lumber, folks. There are shortages in all sorts of things in the supply chain, copper being one of them, but packaged commodities investing. So you've got lumber, concrete, petroleum products, glass, steel, labor. Labor shortages are affecting home builders. And there is a shortage of housing, no question about it. Here's what's going on with copper. It topped $10,000ametric ton for the first time in 10 years. In 10 years. And look at the chart. The chart just shows basically a parabolic increase in copper prices. And so that is happening. There are all these signs of inflation all around us. And if we are not paying attention to this, then we have only ourselves to blame. We have only ourselves to blame. So we've got to pay attention to this inflation. Here's another article. Framing lumber hits twelve hundred dollars per thousand board feet. You know that piece of plywood, it's about 300% more expensive than it was just last year. So absolutely staggering what's going on here and how this affects everything. As of as of the week ending April 23rd, the price of framing lumber was up $1250 per thousand board feet. That's up an unbelievable 250%. See, it's up more than that now when lumber prices were roughly just $350 per thousand board feet. So this housing affordability problem is not going to get better anytime soon. And you just intuitively know that no matter what the government tells us, no matter what the Federal Reserve tells us, or the other central banks or the other governments around the world tell us, you just know intuitively the truth, don't you? Yes, you do. You know the truth. And what is the truth? The inflation rate in pretty much everything is so much higher than we are being led to believe. Have you been to the grocery store lately? Have you been to a restaurant lately? These prices are through the roof. I just can't believe it. I mean, when I go to the grocery store I think, how is it that, you know, like a normal family on a normal income gets by? It's just crazy. These prices are insane. And the inflation is not only reflected in the price, right? It's also something called shrinkflation. So if you look at products, make sure you pay attention to this. When you go to the grocery store, it's just one example, you're getting less for the same price or more. So the package may be the same size, but if you look at the net weight there, there's less stuff in the package. Fewer potato chips, fewer whatever. The shrinkflation is occurring all around us. And another thing is service. By the way, I didn't even talk about the gas lines and the gas prices and all of this stuff. Let me just get through a couple more slides here and I'll get back to that in a moment. So if you want to learn more about inflation induced debt destruction, get this free mini book that we have. It's totally free, no strings attached. There's no credit card, no nothing, just free. Okay? Free. Yes. Go to pandemicinvesting.com and just get this mini book. It talks about inflation induced debt, debt destruction, as well as a whole bunch of my other Good techniques to, to just win in this environment we're in. Okay, so we, we've got shrinkflation, we've got inflation where the price just goes up. And you know, many of us see that, it's very apparent. But we've also got the amount of stuff you get getting less smaller. And, and they're tricking you. They're tricking us. Right. The package might be the same size, but the quantity of say, food in the package. But wait, there's more. It's not just that. What about the service level? Let's go back to restaurants. So, you know, for a while I wasn't eating out very much. You probably weren't either. And now I've been going to some restaurants lately and the service is awful now. It's awful mostly because the restaurants can't get people to come back to work because they're making too much money with enhanced unemployment benefits sitting at home. So the government has incentivized people to sit at home. That's bad. That's mal investment. That's just not a good thing. It's not moral, it's not good for anybody. But it gets worse. That action by the government of incentivizing people not to work is actually very inflationary. Think that through, think how that works. Okay, so the restaurants, the retailers, all of these businesses, in order to entice people to come to work, they have to make it worth it for them. Naturally, the people think, well, why should I work when I can sit at home and make more money on enhanced unemployment benefits? Right? Or I'll figure out how to milk some other government program. Maybe I'm suddenly disabled. I've never seen so many young people who should not be disabled getting disability benefits from the government. Have you? That's been going on for like a decade or more now. I mean, I mean there's, you know, like millions of people, young, able bodied people that are getting disability benefits from the government. So everybody figures out a way to game the system and, you know, scam the government. Right. And, and so now the employers all have to pay more to get people to come to work. So what do they have to do? Well, they have to raise their prices or they have to just go out of business or cut services. Restaurants. Over the weekend I was in Cape Coral, Florida looking at properties and I, I just can't believe how understaffed these restaurants are. And the hotels, same thing with the hotels. In fact, I was staying at the, the Westin Hotel in Sarasota. Beautiful property. And I talked to the manager. And she told me that if, if, if we could get 20 more people on our staff today, we would hire them instantly. We just, People just don't respond. They don't respond to the job postings, the other employees that they have in their Rolodex, figuratively, they won't come into work. It's just not worth it for them. So the employers will have to pay people more or they'll have to just offer less. The bottom line to all of this, this whole conversation, is this for most people, given what is going on right now, the standard of living in America, and certainly even it's more, it's worse in other countries, in many other countries, much worse than the U.S. the reason, it's complicated. But the U.S. has the Reserve currency, the world, and they can basically print the money with less, with less consequence than other countries can. So the US is pretty lucky in that way. But even in the US the standard of living is declining and it is declining more quickly than it has maybe at any other time in probably anybody's lifetime. Anybody who's watching or listening to this now. And that is going to have hugely significant effects. What can you do? What can you do to protect yourself? Well, get my free Pandemic investing mini book, okay? Just get that. It's totally free. Read it. Listen to all of my podcast episodes. Watch all the YouTube videos on my YouTube channel or the other channels. Some of the more controversial videos that can't go on YouTube because they will, they will delete them are on other platforms. And watch them. Learn about it. Learn what you can do. Use inflation induced debt destruction. I was looking at a house that I was emailed today. I couldn't believe. I cannot believe these housing prices. They're absolutely insane. Now that doesn't mean housing affordability is that bad, because it's not. And if you have followed my Hartman comparison index, the HCI, or seen any of my recent presentations, maybe on the YouTube channel, about my comparison of real estate prices and mortgage payments to many other assets. It's actually not that expensive. But if you only were investing in dollars, holding dollars, it does look expensive, right? I got an email of a house today, Sarasota, Florida. I couldn't believe it. $2.9 million and change. And then I looked at the square footage. 2900 square feet, $1,000 a square foot in Sarasota, Florida. Are you kidding me? I mean, these housing prices are just becoming crazy, crazy, crazy. Now I know that if some of you are watching or listening and you're not familiar with my work. You may think I'm kind of jumping around and contradicting myself. I'm not. There's. You just have to peel back the layers of the onion to really understand it. So please check out prior podcast episodes, YouTube videos, etc. To learn more, read the book Pandemic Investing Free book, and you'll get it. Okay. Or contact one of our investment counselors. We'll be glad to help you. All right, so that's it. There's our info. Jason hartman.com if you're in the US 1-800-hartman you can just pick up the phone and call us. And we're glad to help you. Thank you. Thank you for all the comments and questions. I will read them and try to answer them on a future episode. But we've got to get to our Mortgage update. It won't be part of this live stream, but it will be on the podcast that'll publish later today. So that'll be Creating wealth, episode number 1685. Thank you very much for listening. Happy Investing. And just take action now to protect yourself. I'm looking at all these great comments here, and they're talking about the gas prices, the gas shortages. Remember, when gas prices go up, it affects every price of everything because the cost of energy is in literally everything. There is no escape from energy costs. Yeah. Just, just unbelievable. Thank you for all the comments, folks. So I'll get to them and, you know, I'll weave those answers to those comments and responses into future episodes and, and broadcasts. Okay. Thank you so much. Happy investing. And let's go for the podcast listener to our Mortgage update.
