Latest / Financial Survival Network / 2024 Real Estate & Economy Outlook: Inflation, Tech, Recession with Jason Hartman #5977

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2024 Real Estate & Economy Outlook: Inflation, Tech, Recession with Jason Hartman #5977 · Financial Survival Network

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That's really the major tool of the governments and central banks around the world,
0:04
including our government central bank. And so the long term business plan for governments
0:11
and central banks is inflation, and especially for the US. Inflation is very
0:16
beneficial to the United States because you know, the United States is the largest
0:21
debtor nation, and it can inslate away that debt through a strategy that I've
0:27
been teaching for almost twenty years. Now you are listening to Carrie Let's's Financial
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Survival Network, where you get valuable information you just can't find anywhere else to
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thrive in today's trying times. You need the Financial Survival Network now more than
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ever. Go to Financial Survivalnetwork dot com and get your free newsletter and gift.
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Financial Survival Network now more than ever, And welcome you are listening to
0:58
and watching the Financial Survival Network on your owns. Terry Lutz, Well,
1:03
we got Jason Hartman with us. We're going to be talking about what's in
1:07
store for you in twenty twenty four. I think you're going to be surprised
1:11
by some of the trends that we both identified, and hey, we could
1:17
cut to the chase and just say it's going to be more the same but
1:21
that wouldn't be fair. It's more the same, but it's a lot of
1:25
other trends kicking in as well. Jason, great to have you back on
1:29
the show. Come you're with us now from your Southern Command the Southern Command,
1:36
liked Russe Limball used to say it that way. Yeah, you just
1:38
just expanded your operations there. And I hear a lot of activity in the
1:45
background the Hey what is in store for you and for us in twenty twenty
1:53
four? Well, the Thankfully the FED has finally decided to do the pivot.
1:57
I think the pivot is long overdue. I was very critical of the
2:02
FED because I think they let the cheap money run for far too long.
2:07
Jerome Powell should have curtailed that much sooner. Uh, and then his whole,
2:14
his whole hallucination about transitory inflation, he was obviously wrong about that.
2:19
So I was super critical of the FED, and I do think they really
2:22
screwed things up. But I think, uh, at this point they probably
2:27
have engineered the soft landing. And of course everything I say always comes with
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the disclaimer barring some black swan event, right, you know, I can't
2:38
predict another plandemic. Uh, you know, those are those are planned,
2:43
no fi by the powers that be, you know, pandemic whatever. But
2:47
you know, if if things continue in a normal economy, I think actually
2:53
things are going to go pretty well. You know. It's it's not without
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its problems, for sure, but specifically when you look at the real estate
3:01
market, that has surprised everybody except me. I have been widely criticized and
3:08
trolled online every time I posted a YouTube video over the last probably four or
3:14
five years. People were talking about the crash, this, that and the
3:17
other thing. And I told them, no, they're wrong, and they
3:20
said, no, I'm wrong, And I was right and they were wrong.
3:23
And you know, it's pretty easy, Carrie, to figure this stuff
3:29
out sometimes because it's just a matter of the most fundamental law of economics,
3:35
supply and demand. And so I got some good data to share with your
3:38
audience on that today. All right, So supply and demand. Hey,
3:43
I was out there, you know, in the midst of the pandemic,
3:47
desperately searching for a house to buy, and you found a good one at
3:53
a good price. Yeah, I found it. Maybe the price wasn't perfect,
3:58
but I caught it, just I caught the wave and I knew it,
4:00
and I was telling all of you out there, buy assets that can
4:05
produce income, because that is the key to surviving inflation. Now, let's
4:12
go back to inflation here. So they're loosening up the spigots, or at
4:15
least they say they're going to Michael Pento noded economists said. Powell originally said,
4:24
or they said said three rate cuts, and Wall Street immediately extrapolated that
4:29
into six rate cuts in the coming year. But what about the dollar,
4:33
what about the bond market, what about the deficits? Is cutting rates really
4:40
going to help things or is it going to be the equivalent of pouring gas
4:45
and lean on the fire. Well, that's a great question. And you
4:48
know, Carrie, it's always pouring gasoline on the fire. All these people
4:54
know how to do. You know, whenever there's a crisis, you know,
4:57
it's always the G seven is meeting, the G twenty is meeting whatever.
5:00
Right, all they're ever doing is putting out the punch ball and just
5:08
making sure they are flooding the system with the odd currencies. That's really the
5:14
major tool of the governments and central banks around the world, including our government
5:17
central bank. And so the long term business plan for governments and central banks
5:24
is inflation, and especially for the US. Inflation is very beneficial to the
5:30
United States because you know, the United States is the largest debt or nation,
5:34
and it can inflate away that debt through a strategy that I've been teaching
5:40
for almost twenty years now called inflation induced debt destruction. We've talked about it
5:45
before on your show, and I talk about it on my show all the
5:47
time. And so we definitely are in an environment where we will have persistent,
5:54
long term inflation for quite a while. I think the ultimate thing that
5:58
will change that maybe in the twenty thirties, maybe not until the twenty forties,
6:02
will see and that is a real shift in demographics. The other thing
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we have to remember that's a wild card is technology because if you look at
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it like a boxing match, and you think, in this corner we have
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bad fiscal and monetary policy, and in the other corner we have technology.
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And the question is when the bell rings and they go in to fight,
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who will win Because technology is deflationary and bad fiscal and monetary policy is inflationary.
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So this really is a war between the two. But I will say
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this technology is an evolutionary concept because each technology builds on the last. But
6:50
bad fiscal and monetary policy is just pure vote buying and stupidity, and that's
6:59
infinite, right, So we will see who will win, whether it be
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technology the deflationary pressure of technology, which you know, look, technology is
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not a new thing. It's been around for quite a while, and we
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constantly see the deflationary pressures of it. But if you really think about it,
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we have already exploited the last cohesive cheap labor market on Earth, and
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that was China. And now China is not that cheap anymore. They're trying
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to make the next market for cheap employment be Africa. But Africa is a
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really dysfunctional mess of a bunch of different interests in a bunch of different countries,
7:41
so it's not going to be the same as China. But again,
7:44
technology is overall deflationary. Bad fiscal and monetary policy of course inflationary, So
7:49
we'll see who wins that. But I think the bet on inflation being the
7:56
long term friend, the long term trend, because it is the friend of
8:01
governments and central banks, is probably the best beat. I mean, there
8:05
will be bouts of deflation in there or disinflation, But long term I would
8:09
bet on inflation. Well, you know, Will Rogers said, ignorance got
8:15
us into this mess, and ignorance will get us out right, and then
8:22
you'll keep He's got the best quotes. You know, the future ain't what
8:24
he used to be. Yeah, So what about what about inflation? For
8:30
this coming year? They're opening up the monetary spigots gold, bitcoin, all
8:35
the alternative investments are basically the canary and the coal mine or the gold mine.
8:43
And can they go too far with this? Jason? Can they inflate
8:48
to the point where the currencies become all but worthless? Oh? Of course
8:54
they can. And that is the long term plan, but it won't be
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the short term plan long How long is long term? And the long run
9:03
we're all dead, you know, you well, yes is. John Maynard
9:07
Kane said he is right about that. Look, none of us know because
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you know, ever since the seventies, go back to all the doom and
9:18
Gloomers and the dooma gloom apocalyptic movies of the seventies like think of Soil and
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Green roller Ball, you know, all of these movies, right, everybody's
9:26
been predicting doom. I mean go back two hundred and fifty years to Malthusian
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economics, right, and somehow they managed to keep kicking the can down the
9:37
road. And humans are a resource and humans solve our problems. Yes,
9:45
they create them, but then later they fix them. They create so they
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solve the problems just like government. Well government doesn't solve any problems though.
9:52
That's the problem. Is it solving problems? Then maybe we could could kind
10:01
of go along with the plan here, But they're not solving They just create
10:05
more problems in their efforts to solve problems. I think they do both at
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the same time. And on the net of it, you know, government
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obviously should be much smaller because government is bloated, corrupt, and inefficient.
10:22
So smaller government is a better government for sure. Yeah yeah see. But
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for the coming year, so we're going to see more inflation, all right,
10:33
which is going to be good for assets, right, But we're also
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going to see war too. More war. We got like Venezuela saying they're
10:43
going to invade Guyana. We got China saying they're going to invade Taiwan,
10:48
which I don't personally believe they're going to do. But if they get desperate
10:52
enough. Who knows, And we got North Korea rattling sabers, we got
11:00
Iran. I mean, we still have the Russia Ukraine war. How much
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longer that will continue? I think I used to say about my attorney that
11:09
he would defend me till my last dollar, And it looks like Ukraine will
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fight until the last the adult male or even female has been blown up by
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an artillery shell. How much longer does that go on? I don't know.
11:24
You know, we will see. All these wars are terrible. But
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you know, as I've long said, as long as war is profitable,
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there will never be peace. Governments, central banks, and of course defense
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contractors make a lot of money for war. It's a very lucrative business.
11:39
So you know, we've got to take the incentive out of that. But
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that's a whole nother discussions. Midley Butler War as a rocket, right,
11:48
I remember that that was a very old book that talked about that. So
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Kirie, when we look at the we've looked at the broader economy, but
12:00
maybe we should drill down onto the real estate market, which of course is
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my specialty, and I'd like to share a few things on that if I
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could sure, please share your screen. Let's see what we got. Yeah.
12:11
So this is the most fundamental law of economics cannot be denied, and
12:18
that is supply and demand. And there is still a very significant housing shortage
12:24
in the United States. Do not be fooled by the purveyors of doom on
12:28
YouTube who say differently. They're simply lying, and they've been saying the same
12:33
thing for many years, and they have been wrong wrong. Eventually, every
12:39
doom and gloomer will be right, Okay. I mean Robert Kiyosaki when he
12:43
had Peter Schiff on his show, and I've had Peter Schiff and Robert Kisaki
12:48
on my share and so you you and Kiyosaki introduced him saying, Peter Schiff
12:54
has predicted nineteen out of the last two recessions, and I don't know why
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those AI balloons go on there. I gotta fix that. But you know,
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look, even a broken clock is right twice a day. And as
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soon as they're right, they're gonna say, see, I was right,
13:11
I was right. But the danger is that so many people listening to these
13:18
people and falling forward their just their their bullshit. They just miss out on
13:24
opportunities over and over again, while the slow and steady person, like the
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tortoise and the hair, you know, they are the ones who get rich
13:33
in the meantime. I mean, look, ever since two thy eleven,
13:39
coming out of the Great Recession, everybody has been talking about a market crash.
13:43
I mean I have heard this every year. I've been doing this for
13:45
decades, and it just doesn't happen. The two thousand and eight financial crisis
13:52
that was a once in a lifetime black swan event. It was the first
13:56
time something that bad happened in eighty years in a lifetime, okay, since
14:01
the Great Depression, which was of course much worse than that. So look,
14:05
we've got a centrally planned economy. For better or worse. We have
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what we have, and the central planners will react and they will turn on
14:15
the money printers. And yes, that game cannot last forever, but it
14:18
can probably last a lot longer than any of us will live, Sally hope,
14:24
we will say those. So here's here's the little logger than my kids
14:28
and grand children as well. Yeah, so here's the real estate picture we
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have. We ended the year with five hundred and thirteen thousand homes for sale
14:37
in the United States. Now, the overall housing inventory in the United States
14:43
is one hundred and forty million homes. Okay, so just think about it,
14:48
About zero point three percent of the inventory is actually for sale. That's
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nothing. During the COVID era, the lowest point of inventory was two hundred
14:58
and forty thousand homes. So since the low point of the COVID era,
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inventory has slightly more than doubled, but compared to what a normal level of
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inventory, pretty much any expert will agree on this that a normal level of
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inventory is one point two million homes for sale at any given time, and
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that'll give you somewhere around six months of inventory. That's a normal, balanced
15:26
market. It's not a bad market. It's not a buyer's market, it's
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not a seller's market. It's a balanced market. One point two million homes.
15:35
Right now, we have five hundred and thirteen thousand homes. That means
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we have a shortage of seven hundred thousand homes in the United States. So
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that's the first thing to understand. Now, if big layoffs come, it's
15:52
fair to ask will inventory increase? And I'll tell you something. We have
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one hundred and thirty five million people, or one hundred and thirty five million
16:06
homes that have the lowest interest rate mortgages in forever, literally five thousand years.
16:18
That's how low their interest rates are. And if you don't believe me,
16:19
read a great book by the late David Graeber called Debt the first five
16:22
thousand years. They have tracked interest rates back five millennia. Okay, so
16:30
these mortgages have twenty eight years left on them. These people are extremely comfortable.
16:37
They have mortgage payments that are dramatically cheaper than any new mortgage payment they
16:42
would have on a new home. They are dramatically cheaper than renting a house
16:47
or an apartment. So these people, one hundred and thirty five million of
16:52
them, are extremely comfortable. Sixty five percent of the homes in the country
16:57
have a mortgage add or below four percent. Twenty five percent of the homes
17:03
in the country you have a mortgage addor below three percent. And guess what
17:07
those are only statistics based on the mortgage homes. Forty two percent of the
17:12
homes have no mortgage at all. So where would this rush of inventory ever
17:18
come from for the next twenty eight years. These people have a deal.
17:25
They're not going to give up, and so far the last three years it
17:30
has proven that. So even if we see an unemployment increase quite a bit,
17:37
which is a difficult thing to happen. Another book I'd recommend is a
17:44
book called When the Boomers Bail And I interviewed the author on my show Mark
17:49
Lotman, and what he talks about is how we will have a systemic labor
17:56
shortage really for the rest of our lifetimes. He makes an interesting point in
18:00
the book because the boomers just didn't have enough children. He says, if
18:04
you own a business, anybody that you'll hire in the next quarter of a
18:10
century has already been born. There's no new blood coming into the labor market.
18:17
Okay, So if we have a systemic labor shortage, that means it's
18:22
unlikely we're going to have high unemployment, and it is likely we are going
18:26
to have upward pressure on wages, which is one of the most the most
18:33
uh well, one of the biggest pressures on inflation. It's very sticky because
18:38
when you have wage inflation, all the people earning those wages spend that money
18:42
into the economy, and you have more dollars chasing a limited supply of goods
18:48
and service the recipe for inflation. So you know, there there is just
18:53
really no data that says there is going to be some kind of big crash.
18:57
Let's answer the fame question I talk about on my show. Compared to
19:00
what so, inventory is down ten point three percent year over year from last
19:07
year, and it's down forty nine point three percent. It's down by half
19:14
of what it was in twenty nineteen. And in twenty nineteen we did not
19:18
have a bad market. We had a very strong market in twenty nineteen.
19:25
So you know, there is just no sign in the data that there is
19:30
going to be a real estate crash. Now, all real estate is local.
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Different markets act differently. Of course, we've got to consider that,
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but overall, when you look at it nationally, and especially look at it
19:42
in terms of entry level housing, there is just no data to support a
19:48
crash. I would be happy to debate out with anybody, but in certain
19:53
markets, certain markets are weaker than others. Right in the current time,
19:57
even in Florida, inventory has gone up a bit from when interest rates were
20:04
at that three percent and below level. So there is I do agree with
20:11
you that, you know, because I'm one of these people with a three
20:15
percent mortgage, and I was thinking of downsizing a while ago. But the
20:19
only way I can downsize is just to buy it for cash. You'd be
20:23
downsizing to a more expensive situation. Yeah, downsizing makes no sense, right,
20:30
So all these boomers like me who refinanced or bought or whatever are basically
20:37
sitting in a position where downsizing you get you wind up getting far less for
20:44
far more. Yeah, I should say, yeah, it's a form of
20:47
golden handcuffs. You know, in the corporate world carry how you know the
20:51
common they talk about the golden handcuffs, Right, we've all heard that saying,
20:53
right, that's what one hundred and thirty five million of one hundred and
21:00
forty million housing units has it has the golden handcuffs. Okay, that they
21:06
just have a very comfortable situation with very affordable mortgages, or forty two percent
21:12
of them who have no mortgage at all. Yeah, it's amazing whoever thought
21:18
would be in this position. It really is of quite a unique market position
21:22
to be in, no question. So then housing is never going to be
21:26
more affordable than it is now. And it isn't very affordable now, is
21:30
it. Well, it's very affordable for the one hundred and thirty five million
21:34
people who have the great deal. It's not affordable at all for new entrants
21:41
coming into the market. So look, in fifteen to twenty years, there
21:48
is going to be a giant transfer of wealth from baby boomers to their millennial
21:52
children. Okay, and as that happens, the millennials, who have been
21:59
big complainers for quite a while, are going to suddenly be very very rich.
22:06
Well solidly will be. Yeah, yeah, not all of them,
22:10
certainly, but some of them definitely will. So true, all right,
22:14
So one of their trends we're looking at for the coming twenty twenty four inflations
22:18
going higher. Real estate prices aren't going to go lower, and perhaps are
22:25
going to go higher even still, right, hey, look it. You
22:27
know, as everybody's been talking about a real estate crash as the cost of
22:32
money, real estate's a credit based asset class, right, I mean,
22:34
and we're talking about housing, not commercial real estate. That's a different world,
22:38
by the way, But housing is a credit based asset because most people
22:44
finance it. The cost of money has tripled and it's still appreciated. I
22:51
mean, that is shocked everybody but me, I knew that would be the
22:56
situation because of the simple supply and demand dynamics and the fact that we have
23:03
one hundred and thirty five million people who are extremely comfortable and cannot get a
23:11
better deal than they already have. They really can't afford to move. They
23:15
can't afford to move, their deals too good, they can't afford to not
23:19
stay where they are. Yeah, it's such anomaloist thing. And this is
23:25
when we look at the Federal Reserve and we see how they distort markets and
23:32
how they wind up, you know, causing these imbalances. Yep, no
23:37
question about it. They are the ultimate market distorter, absolutely the truth.
23:42
Yeah. So, uh so, what else do we have in store for
23:47
us here? More have in store? We have in store a speaking engagement
23:52
that you have coming up, Oh yes, is on a on a gorgeous
23:56
cruise ship coming up in April. We are are empowered investor Cruise and if
24:04
anybody is interested in hanging out with me, with Carrie Lutz, with some
24:10
of our clients and other speakers, We've got a five day cruise leaving out
24:15
of Fort Lauderdale, two days of education at sea, three days in port
24:21
on the Gorgeous brand new Celebrity Apex. This is one of their edge class
24:26
ships. It's spectacular, it's brand new, so it's just a spectacular ship.
24:30
And if you go to Empowered Investorlive dot com you can get a ticket
24:36
for the five day crews coming up in April. So really we'd love to
24:41
see all their Carrie's audience. A lot of the Financial Survival Network people have
24:47
been clients over the years and this is a great chance to hang out with
24:51
us and have a great time and do a lot of learning and networking.
24:53
Yeah, and if you're to be in Fort Lauderdale, maybe I'll have a
24:56
meet up the day before the cruise leaves in Fort Lauderdale. And the unique
25:02
is in the show notes to this interview on Financial Survival Network and we'd love
25:07
to have you there. And yeah, this should be a lot of fun,
25:11
Jason and the educational as well. Hey, so looking a forward here,
25:18
what about this increased civil unrest not just in the US but around the
25:25
world. We're going to see that trend subside or does it get worse?
25:30
I think that trend will at least continue at its current level, if not
25:33
get worse. But a lot of the folks causing the civil unrest. You
25:41
know, they are growing up, hopefully and getting some common sense. You
25:48
know, if you're under thirty and you're not a liberal, you don't have
25:51
a heart. If you're over thirty and you're not a conservative, you don't
25:53
have a brain. As the saying goes, chances, so that, yeah,
25:59
that was I think Winston Churchill said that. Yes, Winston Churchill and
26:03
someone else I don't remember who said it, just said that a Democrat is
26:10
just a Republican who hasn't been mugged yet. Yeah, exactly. But I'll
26:15
tell you one thing. I was in Woodland Hills, California for a conference.
26:21
All right, so that's like upscale area. There's a homeless encampment right
26:26
in the middle of the place, and I went to CVS. Now you
26:30
heard that basically California has decriminalized shoplifting because you can't get it arrested for a
26:40
felony unless you're steal nine hundred and fifty dollars or more of merchandise. I
26:45
went to CVS Jason and every single item is locked up eye drops for twenty
26:52
bucks. I had to wait fifteen minutes for somebody to get their butt over
26:56
there and open the case my former home state of California, the Socialist Republic
27:00
of California, is such a disaster. Gavin Newsom, Gavin Nuisance. Normally,
27:07
in a logical world, he would be indicted for treason. Literally.
27:11
I mean, it's unbelievable what he gets away with. He just is he
27:18
introducing this plan to spend three point one billion dollars to do healthcare to illegal
27:22
immigrants when so many citizens of California don't have adequate health care. But he's
27:30
abandoning the tax payers of his own his own state and giving that money to
27:37
people who entered illegally. It's absolutely unbelievable what these people are doing that.
27:45
You know, we have what we have, and you know what most people
27:48
need to do is just keep their head down, invest buy good quality assets
27:52
that everybody needs right, that have universal need like income property, right,
27:59
everybody needs a house, there's a shortage of them. And control those assets
28:04
and use mostly eighty percent of the bank's money to buy them. It's the
28:10
ultimate formula. The lever up. Lever up, but make sure that you're
28:14
buying assets that cash flow right. Yep, good quality assets in what we
28:19
call linear markets, not the cyclical markets. And you want to be in
28:25
landlord friendly jurisdictions. You don't want to be in places like California and New
28:30
York or these places that are unfriendly to business people, landlords, and good
28:37
tax paying citizens. You think it's any coincidence, Jason, that these landlord
28:41
unfriendly jurisdictions are the same ones that are high tax that are have below subpar
28:49
growth rates compared to the landlord friendly jurisdictions. Yeah, No, it's the
28:56
future is in the places that are friendly to the citizens, the taxpayers,
29:02
the businesses those places are are are the future of the country. People.
29:07
After the COVID era, people just got completely set up with uh, with
29:14
the restrictions on their freedom, being told what to do, I mean,
29:18
with these absolutely ridiculous rules that literally made no sense whatsoever. Uh. So
29:26
I think people got the message and uh and the future is in you know
29:30
that the the got right leaning environments. Well will the will the people who
29:36
are left in these undesirable places finally rise up and rebel. Kind of have
29:41
my doubts about it, but I do agree with you. Capital goes where
29:47
it's treated best aslutely and not being treated well. It's being abused in these
29:53
blue states. Let's face it, they're blue states, all of them,
29:57
virtually all. And the chickens are coming home to roost. And well,
30:04
hey, appreciate you coming on again. Make sure you take a look at
30:07
the link. The link to Jason's cruse will be in the show notes on
30:11
Financial Survival Network dot com. Jason, just tell us again where we find
30:15
you? Where we yes, this podcasts n Yeah, my main website Jasonhartman
30:22
dot com. I'm on YouTube and my podcast, my main podcast is called
30:26
The Creating Wealth Show. Just look up Jason Hartman on any podcast platform.
30:32
And then lastly, the cruise is at Empowered Investorlive dot com, so you
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can connect with me any of those places. All right, excellent, excellent,
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Jason, We'll talk to you again. Happy investing, thy four and
30:45
maybe I'll take your advice this year and buy some real estate other than my
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house. And hey, we'll see you on the cruise. Thanks, thanks
30:52
for listening to Carrie Letz's Financial Survival Network, your solution to today's trying times.
30:59
For the link, just go to Financial Survivalnetwork dot com. Financial Survival
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Network now more than ever