Adam Robinson, Global Macro Advisor To World’s Largest Hedge Funds

Jason Hartman discusses the economic recover shape and highlights Wall Street highs as a result of bailout programs. Later, Jason hosts Adam Robinson as they look at the collapse of the world market. They discuss inflation, deflation, and the velocity of money. Then they discuss negative interest rates.

Announcer 0:02
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 multi millionaire 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 on Now, here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:54
Welcome and thanks for joining us from 189 countries worldwide and we are going to be talking About the world today as we speak with a global macro advisor. And from the Wall Street Journal, global markets are mixed to lower to begin the third quarter and the second half of 2020. This has been an absolutely crazy year. But here you go. It’s a tough act to follow. As major US stock averages posted their best quarter in decades, folks, the economy is fake, fake, fake.

Jason Hartman 1:37
But that’s the way it is. That’s the way it is, as the famous newscaster used to say, and that’s the way it is. It is it’s it’s built on a bunch of stimulus and fakery at every level. But so what let’s take advantage of it. Let’s use it to our advantage, let’s align our interests with the most powerful forces the human race has ever known. I mean, this is absolutely nuts. Now, what’s interesting about this before I give you the numbers, is that Wall Street, of course, is the modern version of organized crime. We all know that. And one reason they like volatility, is because they get to report things like this that look incredibly positive from a set point that is low. When I give you these numbers, they are extraordinary. But and that’s a capital B UT. Okay. But but but

Jason Hartman 2:41
they are from a downfall. You know, like, it’s all what’s the Jason Hartman question compared to what compared to last year compared to the lowest point after the COVID scare really had its impact on the Markets compared to what but even that said, it shows to go you that the markets, and that includes the real estate market. It includes the housing market, it includes the stock market, it includes everything. Nobody will accept any degree of pain anymore. This is a world where we have come to not only expect, but literally demand central bank and government intervention to prop things up. And how long can they prop things up. George gammon interviewed me last night. And I was saying, I was asking the big question, what’s the big question? It’s not compared to what? but

Jason Hartman 3:50
it kinda is actually. Because this is the big question, after all of the stimulus, and after all of the bailouts Whether it be long term capital management way back when, or the Great Recession 12 years ago, or the most recent D pression, which we’re probably moving right into a depression. All we got to have his four consecutive quarters and I don’t know. Well, actually we probably won’t have a depression because they won’t let us have one. And all this artificiality, right? It’s like, it’s like not sleeping for 24 hours and just drinking more coffee to pump yourself up with caffeine. The question is, though, how long can they do that? And I say they can do that for a BAM a long time, a long long time. And I know all the doomsayers that Chicken Little The sky is falling people. They all say it’s gonna come to an end and then They’ll be right. Even a broken watch is right twice a day, right as long as it’s not a digital watch. Because as the time passes, two of those times will be right every day on a 12 hour clock. Okay, so compared to what is the question, we will not accept any more pain or hardship in the economy. We not only expect but literally demand bailouts. But the question is, who bails out the institutions that bail everybody else out? In other words, who bails out the Federal Reserve, and who bails out the US government and to a lesser degree, who bails out the European Central Bank, who bails out the Japanese central bank, right, who bails out all the other central banks and all the other governments around the world. Well, they’re not so lucky. The US can keep this game going for a long, long, long time. Mark my words, the chickens will come home to roost, but it may not be in any of our lifetimes. It may be long after we are gone, okay? For some reason I want to hear that song by Kansas. Dust in the wind all we are is dust in the wind. Jason do not sing you’re gonna lose a lot of listeners. You only have like 11 listeners anyway. Can’t afford to lose more than three of them. Because then you’ll really have no ratings. Okay? Ah, no, we have more than that. Thankfully, we appreciate you listening to my seeing my bad jokes, my sarcasm, and my absolutely awful impressions of celebrities. Wow, I really do suck at that. Yes, it’s unbelievable. But I’m pretty good at economics and I’m pretty darn good at investing. By the way, we have an excellent webinar, a new market profile. Well, it’s actually two markets. This is two markets. And I think you’ll really like this. This was a good webinar. We really covered a lot of good stuff here better than some of the other market profiles, I must say. And it is covering both Florida and Georgia markets. Okay. So you will have a Florida and Georgia properties on this one. And all you need to do we’ve got that a couple of different times this week. So check it out at Jason slash Florida, Georgia, no capitals are needed. And there’s no space or dash or anything. It’s just Jason Hartman, calm slash, Florida, Georgia, Florida, Georgia. Okay, check out that webinar. I think a really enjoy this one really good market profile of well really have two markets. And a lot of good talk about investing. And really just some best practices were covered in that one. So I’m pleased. And one thing to note, one of our team members brought to my attention that on some of our slides, they have an old date at the bottom. But these are all current market profiles for 2020. So don’t let that date that’s just a slide template. Don’t let that date fool you. These are brand new webinars. So check it out. Jason, slash Florida, Georgia, and the other webinars that we’ve announced with other market profiles as well.

Jason Hartman 8:37
So what are the numbers? The best quarter in decades in decades? So the Dow Jones Industrial Average was up, up, up up and away. I know y’all thought the world was ending two months ago. Yes, I did. Do Don’t worry about it. I was right there with you. I didn’t think the suburban real estate market was ending I actually thought that was going to do great and so far on right And that’s not as dependent on the bailout that’s just dependent on the migration trends. So the the DJI was up 17.8%, which was the best quarter, since you’re ready for this? Since 1987. Let me see, that would be 1997 2007 2017. That would be 33 years. The Dow Jones just had its best quarter in 33 years. And we thought the world was ending. Well, when you have enough caffeine, you can stay up longer. And I think we can stay up for decades longer. They can kick this can down the road for a long, long, long time. The s&p 500 which is actually a better index, if you asked me was up 20%. That’s the best quarter for the s&p since 1998. Let’s do that math. 2008 2018 it’s now 2020. That’s 22 years the s&p just at its best quarter in 22 years. How about the NASDAQ, the tech heavy NASDAQ. Remember bubble and bust? Well, that happened 1999 to 2000. So the NASDAQ just had its best quarter up 30.6%. Its best quarter since 1999. That’s 21 years. By the way. That’s when I published my first book in 1999. Become the brand of choice how to earn millions through relationship marketing, a timeless classic, and it’s on the New York Times worst seller list. Yes. Get your copy today. Boy that books so out of date, because think of how the world has changed since then. I published that book in 1999. Before social media before YouTube, before podcasting. I mean, look at how the world changes so quickly, right? People ask me about that book. And they say they really liked that book. But it now you know, you must get the third version because it’s much better than the first two. But the third printing of that book was actually pretty good. But it’s so I mean, it’s conceptually relevant today. But technically relevant. Not at all. There was no Facebook, there was no, no such thing as even MySpace. Amazing how the world has changed. So there’s NASDAQ and oil. Now remember, and this one is the most probably the most ridiculous of them all. Because when you ask compared to what, and you look at the collapse of oil, literally, they were paying you to take oil. I reported on that this reporter here, this humble reporter reported on that not too long ago,

Jason Hartman 11:53
just a couple of months ago, how oil prices went negative like interest rates went negative. And the stock market was you A major collapse. So Wall Street gets to brag about this thing. This is why they love to see a down cycle Look, they can live through a down cycle. So you let the market crash and have some real volatility. And then you can say, well, we just had our best quarter in 33 years or 21 years or whatever. And oil. Oil prices were up 80%. Yes, oil had its best quarter in 40 years, for decades. But compared to what I mean, if you bought any of these stocks during that trough, yeah, you’re up, I get it. But who can time the market timing the market is a fool’s game. Nobody ever wins timing the market consistently. Just show me that human and I’ll, I’ll eat my shoe. Now. I’d rather eat my hat because I’m not eating wearing a hat, but I do wear hats sometimes, and I’m not sure they’re gonna happen a shoe because it’s a lot cleaner. It’s not on the ground. So that’s Wall Street for you. And it’s very misleading the book either way, the classic book, how to lie with statistics is actually now on audio so you can get the audio version of that. I know many of you are auditory people because you’re listening to a podcast right now. So you’d like to listen rather than read. And that classic is available on audio. So check it out, check it out. Okay, so is everybody copying me or what? Do you remember months ago, months ago, early on in this pandemic? I was talking about how the modified square root recovery. Right, right.

Jason Hartman 13:50
Well guess what Evan just posted in our content group today. And I actually saw something about it, I think last weekend. An article from the wall street journal entitled A recovery that started out like a V is changing shape. And they talk about what they call the reverse square root recovery. Are they listening to my podcast? Again, everybody is stealing my ideas. Unbelievable folks. the originator is this brain right here that you are listening to this humble, humble host. Yes. Yeah. Right. So you heard me say that months ago, while the Wall Street Journal article is from today, a reverse square root recovery. There you go. Unbelievable. Unbelievable. So who says there’s no inflation? utility bills? Yes, your utility bills will likely increase by 10% on average, in big cities this summer. Another reason to follow my prediction and I was the first to predict this to the mass migration to suburbia. It’s well underway well underway. And the office space market by the way, I also predicted this, but this I’m not going to take much credit for this one because it was pretty obvious. You didn’t have to, you did not have to be a genius to predict the following office space market goes from landlord driven to tenant driven. Yeah, that was an easy one. Yeah, I predicted that. But other people said the same thing. So I will only take credit where credit is due and I deserve credit for the suburban migration and the modified square root recovery. Thank you, everyone who’s copying me. Thank you very much. imitation is the sincerest form of flattery. I’ll take it. Alright. prices rising in affordable home markets. We’ve talked about that a lot. It’s definitely underway definitely underway. And I do have some good news for you though. Well, I have a lot of good news for you actually. I think tomorrow, we will open up ticket sales for upcoming meet the Masters event. We’ve got Harry dent. We’ve got George And we’re gonna have a bunch of other great speakers that we can’t quite announce yet. But this is going to be a super exciting event, starting out with a cocktail reception, a virtual cocktail reception for a virtual event. On Friday, July 31, the last of financial freedom month, remember we dubbed July financial freedom month last year, and then we will go Saturday and Sunday, August 1 and second. And I think this is going to be one of our greatest meet the Masters ever I really do our first virtual meet the masters and our 22nd anniversary event. So really looking forward, there’s a lot of stuff you can do virtually that you cannot do for a physical event. So it’s very, very exciting. So get ready, save the date. And I think we’ll be able to announce ticket sales tomorrow. So you can go get your ticket and reserve your spot for that great event that is coming up. All right. Let’s get to Our guests, we’re going to do part one today. This is a long interview, but an interesting one nonetheless. We’re going to talk about global macro economics, and take a deep dive into some of this stuff. I think you’ll find it fascinating. If you need us reach out Jason Or if you’re in the US one 800 Hartman is our toll free number. All right, here is our guest.

Jason Hartman 17:29
It’s my pleasure to welcome Adam Robinson. He is co founder of the Princeton Review. He’s author of 13 books. And he works as a global macro advisor of some of the world’s largest hedge funds through his company Robinson global strategies where he is founder and president. Some of his books, a couple of them I like Warren and Charlie’s bedtime stories, obviously about Warren Buffett and Charlie Munger. And another great title is how not to be stupid. those are those are really good

Adam Robinson 17:59
Adam, welcome how You Thanks for having me. Jason. I’m, I’m thrilled to be on. I’m great. It’s good to have you. So

Jason Hartman 18:05
you are a New York City resident, but you are in Hollywood right

Adam Robinson 18:09
now. Right? I am. I’m in West Hollywood. I live in Tribeca, where I’ve been for Eon. And I left mid March during the writing on the wall. And most most of my friends has, in fact, left anyone who can leave Manhattan at luck. Yeah,

Jason Hartman 18:28
yeah, I agree. I agree. You know, I interviewed Dottie Herman, the CEO of Douglas, Elliman real estate on the show many weeks ago and it was amazing to me Adam, how really how candid she was because she was saying a lot of things that are not in her self interest. And, you know, she and all of her friends that you know, have homes there have fled to the Hamptons and, and she just said there’s going to be a mass migration out of all high density areas, you know, not just New York City, but what’s going to happen to San Fran. Cisco. Yeah, I mean, even where you are downtown LA, you know, West Hollywood, I mean, those are high density areas, Seattle, San Diego, Chicago, Miami, Boston, etc, etc. I just think even after this is over, and it will not go forever, that people are still going to be paranoid, they’re going to have a sense of post traumatic stress disorder. Do you feel the same way?

Adam Robinson 19:25
Well, first I I don’t deal in feelings. I only deal with what I know to be true. And already the trends were in place, as you well know, before COVID. So last year in Manhattan, and just so your listeners get a framework on this a benchmark, Manhattan commercial real estate is one of the prime retail destinations in the world, right. So you can say Paris, London, Rome, Singapore, Shanghai, Dubai, their San Paolo, maybe a few other places Miami, Chicago, la Anyway, last year, retail storefront space 25 to 30% was vacant in Manhattan. That was at the end of last year before any COVID imagine what it’s like now. Yeah. And, and in addition, the already millennials and Gen Z’s have been migrating away from high cost large cities. And these were trends in place again, as you well know, before COVID. Sure. And so Coronavirus, has has accelerated trends that were largely in play. And so yeah, this is going to be a long time coming and even friends that I know have moved out of the city as it were, you know, I’m using air quotes for the summer are expressing reservations whether they want to go back at all, they even not millennials and Gen Z’s but people actually in the prime of their lives and wealthy enough to live anywhere in the world. They’re saying, I don’t know that I want to go back to Manhattan.

Jason Hartman 21:03
Yeah, or Hong Kong or Singapore or Dubai or any of those places for that matter, any of those? Yeah, the two in my eyes Adam, the two big danger zones are elevators and mass transit. But, you know, when you live in a city, everywhere you go is crowded, you go to Starbucks, it’s crowded, you walk on the street, it’s crowded, you know, it’s just everywhere. And so it’s really kind of fascinating and tragic at the same time to to witness these trends and think how life is going to be shaped maybe for another entire generation, you know, I lasting for a long time. So it’s pretty interesting, but let’s talk about the economy. You know, what you do is you You must have just an amazing view of the global economy. You know, I love macro. I’m, I’m a big macro fan, but you’re in the thick of it. I mean, you’re talking to the people who have skin in the game. They’ve got many, many millions. are billions and billions of dollars at stake. So what what are you seeing? What are you saying to them? And what can we all learn from it?

Adam Robinson 22:07
So first global macro in a world in which your listeners are thinking, what about my portfolio here and say, or my real estate portfolio or anything, the thing that that I’m about to say are true in across the board, and then we can get granular. So in a sense, what’s gone on is a collapse in the global economy. That happens periodically. And, you know, sir john templeton, the legendary investor, once said, the four most dangerous words in investing are this time, different time say that all the time.

Jason Hartman 22:49
I know that’s a great line. But it really does seem like it’s different this time.

Adam Robinson 22:58
I was about to say. They’re the most Dangerous words and less this time surely is different. Right? Okay. profoundly different. Found a different in in a way that it doesn’t seem our central bankers or global leaders, corporate or political. And by the way I’m agnostic I’m not making any political statements here. But what they don’t get is that we have a population collapse. So let me tie that to the economy so it doesn’t like. So the engine of the global economy since at least the end of World War Two has been the willingness of the US consumer to go into debt to buy things he didn’t really need. And we call that the American dream. right and right, and so I want what mom and dad had, I just want more of it. So if they had an apartment, I want a home. If they had a home, I want two homes. In fact, I want to have everything and we export it that American dream that became a cool Global dream, one of consumerism and debt, debt fueled consumerism. And I’m saying all this, because the punchline is going to come in about two or three minutes. And it will, I’m giving your listeners a framework for understanding what’s going on in the world. And so in their neighborhood, Steven. So, again, willingness to go into debt to buy things I don’t really need. And that works. I’m using air quotes, as long as we’ve got continued growth. So the entire world, the entire global economy was predicated on continued growth. We can’t stop. We got to keep growing. Because every time we pick up a little more debt, we spent it, we grow and pile up more debt. We never paid down the old debt. And here’s the problem. There are only two sources of growth in the world. Population growth and consumption growth. Then population growth and consumption growth. And again, the entire global economy was predicated, that’s got to go on forever, truly forever. And here’s the problem. They’ve both gone negative and are accelerating to the downside. So fat in the United States, in every country in Europe, Canada, Australia, and Japan, I’m using air quotes the developed countries in the world all last year, more people died in those countries than were born.

Jason Hartman 25:31
This is the UN projection of the empty planet. All the environmentalists are so concerned about overpopulation, but just wait five decades in 50 years, the planet’s going to look empty, Japan and Russia will almost cease to exist. You can’t have a country if you don’t have people, you know,

Adam Robinson 25:50
it’s right, but let’s tie it back into what to the reality today, not 50 years from now. So right now because I know you’re listeners are like, like, Okay, well, how does that affect my portfolio now? And so the problem is that, again, that wasn’t just last year, this is an accelerating decline in birth rates. Again, in all developed countries, the only regions of the world that are increasing in population are Africa, in the Middle East. And unfortunately, it would take, I don’t know, 20 or 30 people in those regions to equal the buying power, disposable income of one person in a developed country, right. And so what’s happened is we’ve piled up all this debt, assuming that we were going to keep growing and now we’re accelerating to the downside. And every x years, we have a Bubble Pop. And that Bubble Pop was because it was predicated on continued growth, the global economy, the depth And here’s the punchline in 19. So we had, you know, collapses in 74 and 88 to 87. Let me see 94 2000 2007 and nine, and we had a sharp one in 2018. We recovered, and then another one right now. And this is the fastest decline from on February 19. US stock market an all time high. And exactly four weeks later, on March 23. us large cap equities had fallen by a third I say large cap because the average small cap was down nearly 50% in a month, right. Imagine the Wipeout and global welfare. Yeah. And so this was all a predictable as of a couple of years ago, we already had negative interest rates already peaked that should have told people wait a second. We’re Alice in Wonderland territory here. You know, Jason last year on November 6, Ray Dalio, who’s the head of Bridgewater, the world’s largest hedge fund. On November 6, he wrote a blog piece, the world has gone mad and the system is broken. Well, it actually happens gone that this is all an inevitable consequence of debt piled up in a world that’s now collapsing. Population wise, you can print as much money as you want. It’s not going to stimulate demand when there are fewer people buying fewer things. Right, the problem,

Jason Hartman 28:37
right, but I always wonder about that. If you just create so much money, and it flows into the system. I mean, it’s gonna go tomorrow. I know it’s gonna go somewhere, right? So if everybody got a check, instead of it being 1200 dollars per adult and $500 per kid, if everybody got a check for $100,000 you know, Even with a declining population, even with wary consumers, how can we say that that wouldn’t create demand? Of course it would. And then those dollars would start chasing the limited supply of goods and services. And

Adam Robinson 29:13
let’s talk about that. Okay. Let’s talk about that. Let’s actually play through that scenario. Okay, go for it. No. So economists, we actually know that that doesn’t happen. central bankers have flooded the world with trillions of dollars in our

Jason Hartman 29:28
global financial crisis by

Adam Robinson 29:30
2000. Yeah, so so while we flooded the world with trillions of dollars, and there hasn’t been inflation, and there hasn’t been inflation, because if you give me $100 or 100,000, and I don’t want to spend it on anything, there’s no inflation. And so where the inflation has gone is real obvious. It’s gone on in the stock market. Yeah, yeah. Or

Jason Hartman 29:57
TAs accidental where it still

Adam Robinson 29:59
knocks Yeah. Right. So, you know, by the way, that’s true just within the US. That’s not true globally, it may surprise people to know that the global stock market peaked in, I say global outside the US. So stocks outside the US on us peaked in October 2007, almost 13 years ago. Stocks, global stocks outside the US are roughly 60% of where they were 13 years ago. Yeah, I you know, I gotta let that man

Jason Hartman 30:36
I think one particular person who makes a big splash in the media to be eating his shoe and that’s Peter Schiff, because he’s just wrong so much. He’s been, he’s been touting international stocks forever. He’s been saying Gold’s gonna be $5,000 an ounce. He’s been saying inflation, inflation, dollar collapse, and none of it has come true and decoupling of China from the US the complete opposite happened,

Adam Robinson 31:02
you know, in well rigid coupling now, I mean that,

Jason Hartman 31:06
that that’s a different kind of decoupling, though. That’s a decoupling based partially on the trade war and certainly on the pandemic, because there’s more on shoring now. Because nobody wants to be left without supplies next time around. So that’s a different thing. But let me ask you about a couple things you said, because you said some really interesting things there. And I just want to make sure we touch on them. First of all, I know you were speaking with somewhat of a figure of speech sometimes to say that there’s no inflation is not completely accurate. There is some inflation, it’s just not much compared to the trillions of dollars that have been created. Right. Yeah. But you know, to be fair, on balance, certainly healthcare has gone up in price. groceries are at a 50 year high. They just released that a couple days ago. We just found that out. Asset inflation, which you did say and US based stocks have obviously gone through the roof. And also you didn’t mention it but Real Estate, we had a lot of real estate inflation, because we you know, when you have a bunch of cheap money, what are people going to do if they’re going to buy a house on a payment, not a price, who cares what the prices, they care what the payment is, and college tuitions been a complete ripoff forever. And that’s thankfully, I think, change. And so there’s been inflation in those categories. But the other question is to say central bankers can’t create inflation by creating a bunch of fiat money. You know, I would just ask, I think you’re right, there hasn’t been much compared to the money creation. But compared to what, there might have been a ton of deflation, had they not created all that new money. So comparatively to the deflation that would have occurred, had the money creation not happened? Is that a fair way to look at it the relative

Adam Robinson 32:53
so there you said a lot there. So let me let’s let’s actually back up and say we don’t care actually. about inflation, what we care about, which by the way is better than deflation, but what we care about is economic activity. And that’s what we haven’t seen a lot of the velocity of money. Yeah, has collapsed

Jason Hartman 33:15
yes and velocity and that’s important because velocity is inflationary. So that has really slowed Go ahead.

Adam Robinson 33:22
So here’s the question that’s very easy to answer in terms of Sir john Templeton’s dangerous to say this time is different. It’s really obvious. We have negative interest rates. And you’ve got to really people have to let that sink in what that means. So, for example, in Denmark, you wanted a home last year and you went to the bank and you went for a mortgage, the bank would be thrilled and they would pay you to take the market, negative interest rates, and borrowers are paid tomorrow.

Jason Hartman 33:55
And you know, what’s so funny about that? It’s so weird for me have us to relate to that idea. It’s just so weird because we’ve all been conditioned to believe that it’s, it goes the other way. If you take someone’s money, you have to pay them for the privilege of using it. And the longer you take it, the more you have to pay because there’s inflation risk built in.

Adam Robinson 34:15
But, but, and then there’s an opportunity cost for the lender, obviously. But if you look at it more like the simple concept of self storage, or a safe deposit box, if you have a bunch of gold, and you want to go stick it in a safe deposit box, you got to pay to rent the safe deposit box. It’s like the bank is paying you to store their money. And if you want them to store your money, you got to pay them interest rates is worried. You know, and the thing is, my money is usually in bits of information. You know, it’s not there’s no storage like the bank, I understand the gold you got to have armed guards and you gotta keep it away from people who would physically carry it away. And so, so you’re exactly right. It does have that analog but it’s a we are In a world, it’s, again, when people they go, Oh, that’s, that’s strange. That’s really weird negative interest rate. And really, it doesn’t matter whether, why that’s so the key conclusion of it is if we have negative interest rates, then all all the models of the world are out the window. Because in in traditional economics, we all studied economics in school, you know, you’ve got to pay to borrow money, right? There’s the time value of money plus the risk involved and all that, and that’s out the window right now. Right? And if that’s out the window, what else is out the window, right financial modeling and the whole notion of, here’s a way to think about it with negative interest rates. You’re paid to own gold, you’re paid to own gold. And you there’s so many other weird things that are going on in the world, which, again, don’t get caught up in the weirdness of it. I’m saying this to your listeners. But what that’s telling us is that the world is way different than we think. Right? And, and we have to re examine all our assumptions. So for example, as you will have stated in your shows, you know, real estate, you can’t think of real estate generically. You have to devils in the details, right? And so what kind of real estate, and if you’ve gone at length on this, it’s so great is what kind of real estate prospers in this new world? And which, you know, commercial real estate in large cities. That’s not a good thing. No, and, and right, and certain other things that we look at the demographic trends in place, and they were in place before COVID. Are you want to be on the right side of those trends? Right. And so I’m giving you an example of a related trend that was in place before COVID that’s just been accelerated the seam off the point but it won the sale of, of path. And plant. Yeah, company was huge. Right comfort and loneliness and stay at home. Those trends were massively in place before COVID. And COVID is just accelerated computing has

Jason Hartman 37:26
accelerated almost everything except the velocity of money.

Adam Robinson 37:30
There you go. There you go. It’s really important for your listeners. One of the key things is don’t fight things that don’t make sense. Get on board, whatever the powerful tsunami is moving through the world right now. Get on board it, identify the trends that are in place, ideally before COVID and COVID. Just accelerated them right and get on the right side. Back Yep, with your investment portfolio, your stock portfolio, or even you know you’re an entrepreneur get on the right side of what’s going on in the

Jason Hartman 38:09
world. COVID has created some big tidal waves, and you need to figure out how to serve them because they could lead to prosperity or if you missed that wave economic tragedy, and, you know, it’s sad, because I think that the wealth gap is going to grow dramatically out of this, you know, it’s just going to get bigger income disparity and, and wealth disparities that so many have talked about.

Adam Robinson 38:36
Yes, indeed, again, that after the, during the 2007 2009 collapse, and again, a collapse, a predictable collapse, because we’ve piled up debt, assuming that we’re going to keep growing but we’re not growing so the central bankers keep trying to do whatever they can to keep the game afloat, which is keep lowering interest rates and keeping flooding the market with money. So what where that money has gone? It’s flooded into stock buybacks right into wall stock buybacks and other large, you know, it took you’d have to have a fair amount of wealth to be able to participate in those things. And then you did very well indeed. You know, if you own stocks, especially if you had stock options, you did extraordinarily well, in the last decade. Meanwhile, the average the average family, oh, this is shocking. You know, I don’t know that your listeners know facts like this. Jason, at the end of last year, the average of 48% of American adults could say average but really 48% of American adults had zero dollars in their bank account. Wow, zero has been nothing, no, nothing. No saving. Yeah. And another 21% the add the 260 9% Another 21% had some money but less than $1,000 which is and had maxed out on all their credit cards, then leaving that credit card debt aside or the student loan debt and all that. So at a time at the end of last year before COVID, with the US economy at record unemployment lows and the stock market at record highs, and the market flooded with money, American citizens, over two thirds have less than $1,000 in cash to spend. And imagine what that was before COVID imagine that I presumably meant I’ve already gone through that money, right?

Jason Hartman 40:40
Yeah. In the in some ways people are saving money in the COVID era, because they’re just at home you know, I mean, I’m I’m saving a ton of money compared to my normal life. But ya know, it’s it’s, it’s sadly very unequal distribution. The digital divide is really showing itself information. workers have been able to maintain their income mostly during this time. But if you’re doing a labor oriented job, you know in a service industry, probably not in most cases, you know, hospitality has been devastated, etc, etc. This will be continued on the next episode. Thank you for listening and happy investing.

Jason Hartman 41:26
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