Jason Hartman welcomes back economist Harry Dent, for the rant of the year. Dent explains the current bubble we are in, one that is worse than a debt-bubble, a financial asset bubble. The conversation goes into gold, cryptocurrency, and inflation. They compare asset inflation versus consumer inflation. Jason explains what causes inflation. The conversation ends with the future of the commercial real estate and McMansions.
Announcer 0:01
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Announcer 0:12
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Jason Hartman 0:29
It’s my pleasure to welcome Harry dent back to the show. He’s been on many times with us. And as you may know, I discovered his work back in 1995. I’ve been a fan ever since. He really looks at the demographic side of economics, which I think is a very powerful way to look at big macro trends. And he’s here today to talk about what is going on and there is a lot going on, with bubbles popping everywhere we look Harry, welcome back. Good to be back, Jason. It’s good. Good to have you always always. So we were talking off here a little bit and you were on just a couple of months ago to about how this bubble was a bubble that was going to pop anyway Coronavirus is just sort of an excuse or maybe it’s cover be inevitable to happen.
Unknown 1:16
Yeah, you know, I’d call it the perfect trigger, Jason because this is one thing. I mean, they can do massive money printing and fiscal stimulus and stop a recession and his track, they can stop a stock slide or crash. Yeah. And they did that in early 2009. All this money printing and stuff does not stop the virus. He cushions the economy from the virus. So the virus is perfect in that it causes a sudden shock not a gradual one, like a recession naturally building where Okay, the economy weakens and then more businesses default layoff and then it weakens more. So this is we’re suddenly we’re in a depression right now. Yeah, probably, you know, officially 14.7% unemployment probably really ought to be 20% GDP is going to be down. You know, I was I think it was down six or 7%. But first quarter is going to be down could be 20% or more in the second quarter now, it’s just temporary that that level won’t last. But this is depression, you have to go back to 1930 to 33 to find unemployment and GDP drops and things like this. So it’s a big hit. But it is temporary. And I was Jason like, Oh, it was very late. It was third week in March, when the markets were, you know, just bottomed. And, you know, thought this virus is just going straight up. I said, No, if you look at an S curve progression at the daily deaths, and cases instead of the cumulative, it’s already starting to decelerate. And this fires by early to mid April, it’s going to be obvious to the world that this thing is going away. Now it’s held up more stubbornly than normal but but that was what causes the markets or caused the markets most to bounce back. Because you gotta remember my my key date, I think it was March 16. That was a Monday, after three days of the Federal Reserve announcing the most aggressive stimulus program $5 trillion repo line, not just a couple hundred billion and 700 and 50 billion have extra money printing and bond buying and buying junk bonds and everything, and a bunch of other stuff and some fiscal stimulus. Monday, the market opens, it drops 15% the Dow dropped, you know, it 10% in one day, the market said, Hey, Been there, done that, Okay, you guys have been printing money for 11 years, and we’re in this bigger crisis. So it was seeing the virus turn around and could see that, hey, this thing is going away for now. So we’re in a bounce and so I tell people, the focus is to understand this virus is a trigger a big trigger, and we are in an nh shock that’s going to cause deflation. I’m wondering right now, I’m telling you Gold bugs and people falling go. Why is gold going up? Oh yeah, infinite money printing. But what about a deflation shock? What if prices go down five or 10% on the next CPI report a month from now, you think Gold’s going to go up with that gold hates deflation, and loves inflation. So I think everybody’s gonna, everybody knows this is bad. But it’s going to be more shocking when you actually see the statistics and see the impacts. And I’ll give you a quick example, Jason, because I went through in Puerto Rico while I moved here four years ago for all types of reasons and really happy I did, right. But we got to hit you know, the worst hurricane in 9200 years. We had a three month shock. I mean, electricity was just mostly out now. No cable or TV. I could even watch CNBC for crying out loud. no internet, most of the time cell phone only worked on my 17th floor as soon as I hit the ground, that didn’t even work. So my wife and I had to skate to New York for three months. So we had a thing like this Debt economy for three months and guess what? Did we have a V shaped recovery? No, it was U shaped. And so that’s what this is like, what I noticed real simply, particularly small businesses, I had 21 restaurants within walking distance, I mean, literally a block and a half walking, reopen. 25% of them never reopened. So those jobs for them, of course, tons of other businesses like that as well. So people don’t get that either. There is no going back to normal here or near term, or even in the next few years from major industries like travel, and major entertainment. I mean, I was supposed to be in Australia right now. On on a five city tour for two weeks. No. Next week, I’m doing a full day online live stream. We’ve never done that before. We’re probably gonna have 4000 people on that would have gotten in the live seminar. That’s
Jason Hartman 5:51
a great point. Okay. So let me stop you there. I agree with you. I think we are going to come out of this into a much smaller economy. Close Not just the US, but every economy is just going to be smaller. I think people are more interested in a simpler life. And I think we’re going to kind of go back to basics a bit. When I think of the depression, I think of that show I used to watch the reruns of when I was a kid, The Waltons, of course, you remember Waltons? Right. That’s my picture of the Great Depression, back in the 30s. And I just think we’re going back to basics, and a lot of these industries just will never recover. You can’t. You can’t run a restaurant if 25 to 50% capacity with social distancing, you
Unknown 6:35
know, it takes most of the fun out of it. And
Unknown 6:38
not only
Unknown 6:39
ships will slow cruise ships will take years because cruise ships are in a very good demographic, older boomers who are sick of the stress of real travel, and all that sort of stuff. So but the thing is those still longer term a few years from now, first of all, we have a big crash to go through. So that’s a whole nother topic, but people earn and spend about the same amount of money, they’ll just shifted to other things quality of life. And I tell you, I, I think a lot of people realize, Oh, my gosh, why do I go to work every day, maybe two weeks a day, a week, two times a week is worth it for my business. And then I can have more time at home don’t have to dress up and much more time with my kids. But we can spend more money on other things. And I’ve had this thing in tour. I’ve tried to convince my promoters in Australia for years. They say, Harry, you gotta go there live. It just doesn’t work. Yeah, we’re getting more people on this webinar than we ever thought live at a fraction of the cost, right, Tony? Are you business better? We’re going to get better because it is. I always call it like the Great Depression, any recession, the pause that refreshes, right, anytime things go wrong. It forces us to think different or reevaluate stuff. And guess what we get smarter, we don’t get dumber, we get smarter,
Jason Hartman 7:53
right? We get more efficient. So every time there’s a war and this is essentially a type of award We’re living in now. We create new technologies, new efficiencies, or at least we accept them. And now people have accepted online meetings, whereas before, they just wouldn’t adopt them. And so all of those efficiencies that are being created are going to stick with us. And that’s a good thing. I mean, Harry, if you don’t have to fly to Australia, and waste all those travel days, you may want
Unknown 8:24
a week
Jason Hartman 8:24
each I know. Yeah. So it’s a lot, you’re going to be a lot more productive, sharing your knowledge on that live webinar. And then you’ll be able to do other things and create more value in the economy by not moving around, moving around.
Unknown 8:41
Here’s an example of simple economic, I’ll make half as much money doing this online in a 10th of the time, not even a 10th right, which frees up a lot better to do other things that I can
Jason Hartman 8:54
do for you and your audience.
Unknown 8:58
And you know, people always you know, that It’s my biggest criticism of central banks. I call them academic economists who’ve never had sex or run a business, dictating what happens in the economy, they think we should always grow. What’s wrong with these people? Can you function without going to sleep six, seven hours a night? Try it for a few nights, you’ll be turning in your mother to the Nazi Right, okay. interrogation, you’ll be so out of it. The body needs to meet economy needs to rest. innovate. We do innovate when things go bad rather than wars caused the greatest innovations, the deepest recessions, depressions, I study innovation, they always come at the most challenging times. And then they get adopted in the economy in the more benign times it’s a natural cycle, grow and do maintenance, repair, and restore and transform and boom and bust and inflation and disinflation. These are natural cycles. Did the economist want what everybody wants in life, a zip line to heaven, we Grow, grow, grow, grow, grow, get better, better, better, go to heaven and stay there forever. Oh, okay, maybe in heaven doesn’t happen that way on earth here. So I go as far to say, Jason, most economists and particularly central bankers have no clue of what actually drives the economy. In fact, what do they focus on governments governments are 20% of GDP. And they’re the lagging edge of that train. They’re not the locomotive in the main part, consumers drive 70% of GDP directly with their spending, business capital investment to gear up to meet their growth is the other 10%. That’s 80 governments. And consumers and businesses are the leading edge governments are lagging. Why is everybody studying government policies? Right now? It’s a big deal, because they’re What are they doing reacting, reacting to a problem? They’re not approved. So why would you look at the government is any sort of leading indicator, unless it’s a dictator who can do whatever they want whenever they want, right?
Jason Hartman 10:59
Well, because People just have this odd, unusual faith in government that government is going to rescue me this cradle to grave mentality. It’s totally unproductive. It’s ridiculous. It doesn’t work.
Unknown 11:09
You know what, what is good government or not? They still don’t drive the economy, right? And so I look at people. That’s why, you know, you said demographics was my specialty, although I do a lot of other cycles. Technology is the other big demographics, when generations grow up, become more, they don’t just spend more money, they become more productive workers. At the same time. It’s a win, win, supply and demand expand in a boom, I can tell those booms in any country roughly decades ahead. It’s a predictable thing. numbers of people born had an emigrants, I can adjust for that. When will they spend the most money in the highest numbered Piece of cake? I can tell people, when every country in the world is going to peak and their overall spending and you know what China is done? Yeah. Randy is just getting going. Yeah, yeah, I think India will never be the next China, China will have won’t be able Keep up with India, China,
Jason Hartman 12:01
China’s not gonna be the next China. And you know what I want to ask you about that, because we’ve talked about that before. I think this is your 11th time on my show. And it’s always great to have you. China’s one child policy has really set in motion a future demographic disaster. What years does that hit? I want to say it’s in about 10 to 15 years that they start sorry, hit over 1011
Unknown 12:23
was their peak workforce ever. Okay. It’s been declining ever since it’ll continue to decline for decades and decades. China doesn’t have immigration people no move to China. Chinese move out of China, particularly rich people to get their money out of China because it’s not a trustworthy government. Right. It’s not a democracy. Now, the other thing though, China’s done something worse than that. That was way in the past. Okay. They’ve tried to lighten up on that. Guess what, it hasn’t done any good. Once people get urban. They don’t want to have kids everywhere in the world. China’s done something worse. They’ve created the biggest hop down over expansion. They’ve driven urbanisation a lot faster than normal progressions that it’s easier to tolerate. They got excess capacity in industry across the board. 20% 22% empty homes and cities condos. 22%. And at the same time engineered by the government, they got the highest priced real estate compared to income in the whole world.
Jason Hartman 13:27
Yeah. And guess what else? People are afraid
Unknown 13:29
that’s a bigger disaster than their demographic slow and biggest debt bubble in history about to crash
Jason Hartman 13:36
right and people are afraid to live in high density areas now. So you know, if you got to be in an elevator or mass transit, those are the two biggest danger zones, according to me. And I and social distancing is the new normal. It’s going to be interesting for sure. I’m hearing you mentioned gold earlier and I just I don’t know if I’ve ever talked to you much about I’m just kind of curious your take. I have a feeling I know what it is, but I won’t Say it I’ll let you say it. What do you think about you know, cryptocurrencies Bitcoin? What does Harry dent think about that? I don’t know if we’ve ever talked about it,
Unknown 14:06
well, slightly different things. They’re supposed to be the same and crypto could eventually be the digital gold as a standard for money, but they’re nowhere near that. Number one, I’m going to start with Bitcoin and cryptocurrency they’re in what I call the hype phase, the same place the internet retailers like Amazon and the new.com. Those all those surged at the end, at the very end of the last tech bubble between late 98 and early 2000. Gave it most of its own companies valued AOL, which actually had real sales and earnings on right at 400 times earnings.
Unknown 14:43
possibility and
Jason Hartman 14:47
zoom is about their
Unknown 14:48
billion dollar companies with no sales or very little sales in losses. So that’s the hype phase hyped up, and then they busted 95% tech stocks went down 78 That big crash, they went down 95 cryptos the same thing. They’ve had a great bubble bigger than the internet bubble, not in capitalization but in size of the bubble but but up there. And I think they’re going to crash. You don’t know that the kryptos gone through this hype phase, Bitcoin and all these companies until you see a lot of companies. A lot of companies fail like the internet’s did in the early 2000s. Yeah, that hasn’t happened yet. So I keep lecturing to crypto conference, they say oh, Harry, you’re right about this big crash just gonna usher in the digital currency age people going to not trust currencies day after that, after that, you guys are the biggest bubble and you’re going to burst the most Now what did we just see in this crash? What what went down more than stocks? Bitcoin? Hmm. Yeah, stocks went down 40% whereas Bitcoin went down, like 50 some percent gold did what it did in 2008. Went up not just I’m talking just the early stage of this crash. The first several days went up a little bit up. money printing, you know, and then when the crash hits, it goes down 12% Gold ended up down. It was not the hedge to the stock. What went up treasury bonds high what I’ve been saying highest quality long term bonds, like the falling interest rates the deflationary side and don’t have default risk, like a lot of corporate bonds too. So crypto did the worst. And I’ve been telling the crypto people, you’re going to have the biggest crash when I’m right. And then you’ll be the next big thing. Because internet had the biggest crash. Amazon went from 666 back down to six. And now 20 415 years later, greatest boom in history. I mean, one of the you know, yeah, they were internet was the next big thing but it had to go to a shakeout first because it was mostly baloney. Yeah, you know, pets or
Jason Hartman 16:46
pets.com sock puppet. No.
Unknown 16:49
Gold is not the safe haven. I’m sorry, sorry. It’s not the worst place to be. In the first crash, it only went down half as much as other commodities. It was down 40 5% when other things are down 70 8085 for oil, next time is going to be down a little more on my targets 950 to 1000 that’ll be a lot better than silver and other metals and other commodities they’ll be down 80% Plus, but it’s not going to be your hedge why gold correlates with one thing and better than any other probably investment in the world. It’s easy to buy inflation. Yeah, sure. Gold likes inflation, but gold bugs are stuck on the last crisis from 6882 when we had an inflationary recessions, inflation up right, the economy now stagflation credit mine Yeah, right in my summer season for the economy that was predictable to happen. So here we have a deflationary Why are they printing all this money they have to constantly print money to keep the economy from falling into place. And deflation happens when asset bubbles burst like stocks and real estate where people have a lot of money tied up and money disappears. And when debt fails and is restructure which is another way money disappears when money disappears less money chasing the same goods and financial assets everything goes down sure financial assets the most but consumer prices go down as well right? So gold is going I think very is keeps edging up while bond yields are going down bond yields are going down after this recovery from the crack saying oh I see weakness from this virus and it is going to be very useful stocks are now finally getting some reality oh yeah what were we thinking? We’re gonna go right back to normal stocks on NASDAQ got near its highs you know what eight or 9% from its high that’s absurd with what’s just happened. So stocks are going out goals still edging up thinking yeah, but they’re gonna print print print, but they got goals. gotta remember 2013 12 to 13 transition, print print print. Japan was the first to go to what I call unlimited just you know, printing off the charts. Inflation kept going down the gold bugs finally had to admit, oh my gosh, money printing doesn’t necessarily cause inflation oh my god Milton Friedman was wrong when he says it’s entirely a monetary phenomena, which I’ve been saying for years. So I think that’s what’s going to happen here. I think gold is going to follow bond if I want to look short term at the economy, do I look at stocks gold or bond? I look at bonds bonds are the most sensitive to short term risks. The bond market is saying I see things going down and in fact, the I just got a chart from a friend in Australia, the 30 year treasury bonds the speculators not the commercial not the smart money the speculators the broad investors are the most bearish on 30 year treasury bonds, which says they think inflation and interest rates are going up that tells me it’s going the other way. Harry, I want to go the other way. Gold is gonna do poor
Jason Hartman 19:54
if money printing does not cause inflation and Friedman statement about it’s always a monetary function. going on, we all know that very well, then what does cause inflation?
Unknown 20:04
Okay, first of all, the primary cause of everything I look at is people not government policy, short term and reactive birthrate. Inflation in history, baby boomers entering the workforce, how much it costs to raise a kid, and how much $250,000
Unknown 20:23
governments have to fund education as part of their budget as well as other things. And the last people to invest in these people are businesses who hire them when they don’t know their ass from a hole in the wall, okay, and they’re 18 or 20 or 22. They need an office, they need equipment and they need training. I have an indicator called workforce growth on a two and a half year lag. That is the best correlation with short term and long term inflation. people entering the workforce at great expense, two and a half year lag because it takes about two and a half years get out before they start to produce more than they’re costing to those last businesses. They invest in them. So that’s the prime cause. But for short term inflation or money creation, there’s two ways to create money and this is important. I had two great economists and they disagreed on this. The two my two favorite one, david stockman and Dr. Lacey hunt. They’re both brilliant, but they disagreed on one thing. Lacey Han was saying, hey, the only way to create money Milton Friedman style is banks multiply bank deposits, we deposit money, businesses and banks can lend 10 to one against that only pledge 10. Why not their deposit, and that multiplies money. So in a normal economy, that’s how it happens, economy’s good. businesses and consumers want to borrow money to buy things houses or business capacity, then multi money multiplies with Wirefly factor. And then if those loans keep being paid back and continue to happen, that sort of expansion and can cause consumer price inflation. Now what has happened since 2008 eight and nine. We had failed demand, we had a excess capacity, a downward economy, nobody wanted to borrow, putting interest rates, zero did almost nothing. So what they did was they printed money and put that money into buying financial assets. Now they tend to buy treasury bonds and asset backed mortgages, which are Treasury related. But that doesn’t matter. new money printed out of thin air is coming not into the banking system or to consumers or businesses as it is recently into financial assets more money chasing what the same assets which includes stocks, and everything and gold and even real estate and real estate investment trusts and all types of bonds. So what we’ve had the gold bugs, we’re saying all this money print is going to create inflation. No, it created financial asset inflate, right, so
Jason Hartman 22:49
asset inflation versus consumer price inflation
Unknown 22:52
versus consumer inflation. That’s the bubble right. That’s the bubble and it’s huge and you can compare this to the 1929 bubble, which was primarily stocks, people didn’t speculate and real estate didn’t borrow. So this is a whole nother thing. What’s going to kill the Fed? I had Ray Dalio, the most successful hedge fund manager in all history, stand up and say something stupid.
Jason Hartman 23:16
You know? He’s been saying a lot of things lately. I don’t agree with but Yeah, go ahead.
Unknown 23:22
Yeah, he’s saying I’m not worried about that. He’s saying we’re at the time. He said he’s got a six to seven year debt cycle and a long term 75 to 100. Well, I’ve got one, too. It’s called 90 years. I’m a much more accurate about this 90 years, right down to it. He said, but I’m not as worried about this crash coming off this bigger cycle, because the debt ratios are not as bad. I said, Ray, this is not the problem. The biggest financial asset bubble how much money just got trashed by one stock crash globally, about $20 trillion. That’s 100% The US GDP as 25% of global GDP disappeared right in five weeks separated. So these asset bubbles can deflate, which means money disappears much faster if you for debts to deflate, and de leveraged, you got to go through chapter seven or chapter 11. And that takes some time and blah, blah, blah, blah, blah, blah.
Jason Hartman 24:20
And then we’re going to see a lot of app.
Unknown 24:22
This is way worse than the debt bubble, which was the primary cause of the 29. crash. This is a financial asset bubble that is absolute bonkers. And people are treating me every time I interview some mainstream economist or, or person, they’re like, hey, you’re crazy. You just predict extreme stuff that you think I created this extreme period. This is the greatest bubble in history and bubbles burst faster than they build greater than anything else in history. I’m not creating this. I’m just reporting on it. I’m there acting like I’m the crazy guy. I don’t know one of the few things people on Earth right now, Warren Buffett doesn’t see a problem with this crap. What does that tell you? Warren Buffett
Unknown 25:08
says everything’s okay. except he’s not buying stocks right now. I know
Jason Hartman 25:11
he’s sitting in cash. Yeah, hugely, very interesting. You know, Harry, we got to wrap it up soon. But you’ve written a lot in your books about real estate and migration trends and things like that. And I remember a long time ago in one of your books, I read about Ashland, Oregon, and you talked a lot about that and how that was gonna be a hotspot. And I actually traveled there just because I was like, I got to see what Harry’s talking about. You know, that’s how much influence you have. And I think there’s going to be a major migration trend out of these high density living environments. And I’m calling it the rise of suburbia. I think suburbia is coming back in a big way.
Unknown 25:50
I call it XRP. It’s like beyond XRP I mean, Bend Oregon, and Asheville Ashland is what I mean they’re not they’re far away from them. Major Metro Center and but you can still get there and fly easily, you know, quickly in this online world which we just been kicked into deeper. me Look at me I’m in Puerto Rico nominum City at two and a half million so I’m not in the sticks. My Island property is in the sticks, okay. 35 from here, but I can do business from here, right?
Jason Hartman 26:19
Everybody can
Unknown 26:22
want to live in a place like Ashland, Oregon. I’ve got a good friend in Miami, who is a real estate kind of developer and speculator. He moved there to take over his mother’s house and he and his wife stayed Yeah, right. Much better lifestyle much affordable. You know, they stayed, they didn’t go back to Miami. We were staying
Jason Hartman 26:42
in Puerto Rico. I was just using as an example, the Ashlyn is not the thing, it’s just an example because he wrote about it years ago, you know, like 20 years ago, but this idea that people do not need to be in these big cities anymore. They’ve always had this attraction and now Both employees and employers have realized they can make the work at home thing work. The remote work thing does work. I mean, listen, we’ve done it for eight years. We gave up our last office in Southern California eight years ago. And it has advantages and disadvantages. But most of our people, they love working at home and now you can get a better workforce because it doesn’t matter where they’re located. It’s geographically independent. So you really have a bigger pool of candidates to pick from.
Unknown 27:30
But there’s a there’s a bigger range for me. I’m in San Juan, my vacation places a 30 minute flight 60 miles away, okay, I go there and vacation, I couldn’t live that’d be boarded up that is more remote than Ashland, Oregon as far as a small town have nothing to do. So I have the city life. But like you say, even if I wanted to be in New York City, why would I need to go to work every day in an office and dress up and get on mass transit wastes all the time. Why not? I do that a couple times a week and then work the rest of time for me. So I want to be in a big city hybrid model because I want all the restaurants and activity, I don’t need to be in a big city to work, right.
Jason Hartman 28:06
But if some of that evaporates, the Broadway shows evaporate, the restaurants evaporate, and the cost of living and the taxes are so
Unknown 28:16
widely in the
Jason Hartman 28:17
city, there’s just really not a compelling reason to be there. So I think suburbia is coming back. So the question is, if you’re a real estate investor, which will be the stronger trend, the smaller economy that we’re coming into, and the economic hardship we’re coming into, or and we’ve already began that, or the migration of people with a lot of money to spend out of these expensive, densely populated areas, into suburban properties. And you know, that’s, that’s what our people haven’t been investing in. I think it’s gonna be a pretty good strategy. And America’s gonna be on the move. The world’s gonna be on the move, but
Unknown 28:56
the bubble alone dictates the greater the bubble, the greater the bursts were. The most bubbly cities Manhattan Yeah, San Francisco. Yeah. San Diego over Miami. Coover, Toronto, a Sydney and Melbourne and Australia, the densest cities. So they go down the most and yet, particularly wealthier people are going to tend at least some are going to migrate out and that’s just going to feed that downturn more. Another sector that’s going to get killed always does commercial real estate. Oh yeah. People are emotional about the real estate and don’t sell their house or businesses will abandon a lease or sell an office building overnight. It makes economic sense. So commercial always gets hits harder. So high end real estate, commercial gets hit the hardest. mcmansions get hit harder than every day suburban home. The everyday suburban affordable home is both attractive now to the new millennials coming up the new wave who still haven’t bought a lot of their houses yet. They haven’t been able for two and retiring baby boomers who don’t have the kids Want to downsize? They just needed to three bedroom house and yells they even less need to be in the city. Right? They can be in a nice quiet suburb. So those are the best houses to buy in the downturn. The best houses to keep an eye I’ve been working with a guy in Arizona, that’s training people to take over overpriced mean mcmansions when they collapse and turn them into assisted living things because large houses will be useful for small assisted living facilities in suburbs where people would rack
Jason Hartman 30:30
that’s probably my friend Jean. I know him. Yeah, yeah. So the thing about that is I kind of wonder because, you know, the the assisted living homes have been such hotspots for, you know, high death rates and infection rates. And I agree that the size of that the smaller home you’re in, the better chances you have of survival. But I even think I think there’s going to be a trend really toward multi generational living, which is, you know, very common around the world.
Unknown 30:58
People. Make people make mansion so they can be
Jason Hartman 31:01
parents, but it doesn’t really have to be a McMansion, it can just be, you know, a suburban four bedroom house or you know a house with a casita in the back. Not even a McMansion, just a,
Unknown 31:12
you know, a nice one of the things I see if you think the way I think, yeah, because the high end is so much more overvalued, then why would you buy an everyday suburban home when you can buy a McMansion with two or three extra bedrooms and a bigger lot? Not a lot? How is your parents there instead of having them in assisted living? Yeah. By the way, nine to 10 grand from our experience? Yeah, mom?
Jason Hartman 31:34
Yeah. Yeah. It’s it’s very expensive. And I think the insurance is going to be tough to get on those. Because the infection rate problem and just in general, the insurance industry, having so many problems, I mean, there’s a massive wave of claims coming at the insurance industry. And we’re going to see a lot of problems with insurance real soon, too. So So yeah, I think multi generational living roommates splitting up getting their own houses. They They need that extra families.
Unknown 32:00
They live in one big mansion at 20% more than price, but you split that you’re both saving money. So yeah, again, but that’s the opposite
Jason Hartman 32:08
of the two single people as roommates in a two bedroom place. Yeah, because now they need that second bedroom for home office. Okay, and,
Unknown 32:17
but all of these are good changes if we use our real estate better if we save money on certain things or commuting, I mean, look at pollution levels have just disappeared. And traffic congestion. These are the two biggest problems.
Jason Hartman 32:30
It kind of nice in a lot of ways. Yeah,
Unknown 32:32
this is a big one. When I see this, why I love change. People hate change. I love change. Change makes things better. It can happen too rapidly sometimes, but this is going to be a good thing. I’m just warning people. As you know, Jason, this is going to be a major shock more than anybody’s ever going to see in their past lifetime because you weren’t around in the early 30s right or going to see in the future. financial assets stocks are going to end up falling 80% or more real estate in the US. 40 to 50% more than last time high end real estate is even gonna call the one true money. Yes, that’s gonna fall and people going to be in shock. This does not have to happen. These are predictable things. We’ve got this first crash 40% exactly what I predicted it would be, we’re getting we’re in this four or five, six month rebound, which is typical, where it’s choppy and won’t go a lot higher, but stocks will hold up in hope. And then we’ll fail again and we’ll go into real delivery when they’re being processed.
Jason Hartman 33:29
You know, that
Unknown 33:32
people don’t, people don’t prepare for the next. It’s alright, if you got whacked 40% because it’s already you’ve already gotten half of it back, you know, to make it a little better. What’s going to be the crime is if you don’t see this and get ahead of the next one, because the next one’s going to be much deeper and longer and it’s going to be a once in a lifetime threat to your financial assets and business. But it’s also going to be a once in a lifetime sale on financial assets and businesses and business assets. On the bottom, if you do get out like Joseph Kennedy, or you do hunker down like General Motors in the early 30s, and pass your competitors, General Motors past Ford forever to become number one in cars for the first time, and then became number one in global corporations that largely was made by its handling of the 3032 crash.
Jason Hartman 34:22
Yeah, the world’s first billionaire came out of the Great Depression, Jay Paul Getty. So there’s a
Unknown 34:28
sense of Kennedy. He was a multi millionaire bootlegger came out ultimately a billionaire political dynasty. Same thing out of that crash. He got out of the top, reinvested when businesses are selling for 80 to 90%. Off that’s a sale.
Jason Hartman 34:43
That’s what Jay Paul Getty was doing. He was buying oil companies.
Unknown 34:47
The mafia made more money than anybody in the Great Depression. Yeah, they were loan sharks at 20% with high cash flow from the bootlegging roaring 20s and then all the businesses that didn’t pay him 20% failed, they just took over at the bottom and owned it half a New York and Chicago,
Jason Hartman 35:04
right? Well, you know the saying recessions create millionaires and depressions create billionaires. So we will see how it goes. But I agree with you, there’s a lot of opportunity, a lot of good things that come out of this, Harry, give out your website,
Unknown 35:18
Harry dent.com. So we have a free daily newsletter you can get on to get to know us if you don’t already know us and of course, and we’ve just split off from our marketing company we used to work with so we’re pushing our whole new letter with a monthly from me and from Rodney Johnson, my partner both under the same roof for a very attractive price so you can get on our full newsletters, but you can be on our free newsletter as long as you want to, to get a feeling for whether we make sense or not. And I think you’re gonna find in the next several months, we’re going to make a lot of sense because I’m telling you, nobody else is right
Jason Hartman 35:50
now. Good stuff, Harry dent, thanks so much for joining us. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website Hartman. Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.