Jason Hartman discusses some of the differences between getting caught up versus getting ahead with your money management. He discusses why millennials are fleeing big cities for suburbs. Later in the show he finishes a two part interview with Hugh Dendry about chaos and our mindset during these times.
Jason Hartman 0:54
Welcome to Episode 1484 1484 Thank you for joining me on this special Weekend Edition. Again, we normally publish five days a week. But when there’s just too much news, we will add two extra days and talk to you over the weekend. So we’ve got our meet the Masters virtual summit coming up. And we’re getting just super excited about that. I talked to one of our listeners yesterday, that is Sean Carroll. You’ve heard him on the show. He’s done some client case studies. And we might be having him involved. He’s a professional actor, and business person, which you usually don’t see those two go together. So we may have him joining us as well. And of course, George gammon and we are working on a whole bunch of other speakers. And I think it’s going to be just a super duper event again, there’s so much you can do when it’s not a physical event that you can’t do. Well. Did I say that right? It’s early. It’s early Sunday morning, here. But whatever you get the idea, there’s so much you can do with a virtual event that you cannot do with a physical event. So very excited about this upcoming event. And again, we should have the registration link for you next week. But we do have our webinar and a whole bunch of you are attending our Southwest Florida webinar, and you’re saying great things about that webinar and those properties. So check that out. Jason Hartman comm slash webinar, that is singular, by the way, Jason hartman.com slash webinar and check that out. We’ve got a listener question from Nick. And Nick, thank you for this question. He says, you should do a debate with rubber meets SETI, you’re both great and I love listening to both of you but you are polar opposites when it comes to investing. It would be an awesome episode to have him on the creating wealth show and talk about the differences between your investment types and Then we got some comments on this post in our private group, one of our listeners, Christina said, I prefer Jason any day over meat. raw meat is arrogant, and his target market is younger, he helps people get jobs, get raises, and make their first $1,000. In a business, we are so far beyond that audience is completely different. Well, I agree with Christina’s comment about being completely different. And I have to tell you, I did interview retreat several years ago, and I didn’t really debate him in the interview, but the next day, he reached out and said, Please don’t run the interview. And I said, why not? He said, Well, I just didn’t feel good about it. And that was about it. And then I said, Well, okay, when can we reschedule? And he says, I’ll get back to you. I reached out a couple more times after that he never rescheduled. So I don’t know should we be playing Chicken sounds right now like he was just chicken. I don’t know is that it? Yeah, I think his strategy is, you know, he’s got his market. You know Suzy Orman has her market. Dave Ramsey has his market. You know, folks smoke it. These people are all we’ll call bubble gum investment advice, pop culture, investment advice, low level investment advice. I’m not faulting them by the way. They have their market, they have their audience they serve. And you know, we had Dave Ramsey’s number two guy on the show a few years ago, and, you know, honestly, he just didn’t know what he was talking about. And, and Dave Ramsey doesn’t know what he’s talking about for investing. But he’s great for the market. He serves for his audience who has got mountains of credit card debt, who spends money on stupid consumer goods instead of saving money to get their life together and they’re paying off high interest rates and they’re not investing. Dave Ramsey is great for that we meet I haven’t studied his material that much so I can’t say but, you know, I thought his interview was weak. And just, it was just boring, honestly, didn’t seem to have any, like, deep understanding of economic issues or anything like that. Anyway, listen, I don’t have anything against him. He’s welcome to come back on the show. Get him to respond to our invitations and we’ll have him back. We can do a debate or just an interview, whatever you want, you know, but I’m sure for his market is fine. All those people I mentioned to her way bigger than me. They’ve got bigger audiences. They’re more famous. They’re, I don’t know if they’re richer. Well, Dave Ramsey’s richer, that I know, Dave Ramsey is richer than me the other two. I’m not sure. Not sure. But we’ll see. So that’s the scoop. There’s a difference between pop culture and what I’ll call bubble gum financial advice in the deep level of analysis that we do on this show and the people that listen to that bubblegum pop culture advice don’t usually listen to the show. Because the show honestly is it’s just a higher level. And that’s just the way it is. There’s a market for everything. Sometimes I like bubblegum pop music, but sometimes I like deep deeper music, whether it be Papa bells cannon or Mozart or, honestly, a Vici you know, Vici music is pretty incredible. The late of Ichi, you know, my favorite type of music is this 1970s singer songwriter music so whatever. We all have different moods, different markets, so we all cross those markets a little bit, too. Okay, that’s that, but thank you for the question, Nick. I don’t think we’re meat is going to have the guts to come back on the show, but he’s certainly welcome to anytime. We did that other interview with him and he he asked me not to run it so I never ran it. And listen, I don’t have to honor his request. If I interview someone, I can run But I just did, because honestly, I thought his interview was boring. I didn’t think it contained any good advice. And I didn’t, you know, Listen, my job is to be your agent, you the listeners, my job is to protect your time and make it valuable for you. And that’s what I try to do. So sometimes I interview people, and I don’t run their episodes because they’re just lame. And we don’t want to run lame stuff on here. We get to decide what we use and what we don’t use. So my job is to be your filter. I want to remind you, I was engaging in a forum conversation yesterday with a real estate investor. And he was talking about like, these bigger societal issues and stuff and I was just focusing on the investment quality and how to optimize investments. And it reminded me of the thing I have talked to you about so many times in the past over the last 16 years here on the show, and that is this brilliant A brilliant piece of advice in this brilliant, brilliant piece of advice applies very much to many of the horrible things that are going on in the world today. And it applies to the last several decades that frankly, America has done a good job trying to destroy itself, but last several decades, and that is a sad state of affairs. And if they had simply followed this great advice, the country would be much better off, everybody in their personal lives would be much better off. This applies to the nation, the company, the individual. It applies to how one runs their family, how they interact in their personal relationships, how they invest, how the economy works, how fiscal policy works, how monetary policy works, and it even applies to our own self and our self concept. And it applies to a different actions and addictive behaviors, and all sorts of things. So here is one of the greatest piece of advice says, I wish I could claim this as mine. It’s, it’s not my idea. I did learn about it though, back in the 80s when I read a tiny little book, a fantastic old book that is out of print now, but it’s brilliant. And that book is the greatest management principle in the world. And the title is deceiving, and it’s by Michael lebeau or lebeouf. I don’t know how you say that. But I think it’s all about this brilliant book. It is about management, but it’s about so much more than management. And you’re probably know what I’m gonna say this brilliant nugget. It’s so brilliant. And I want you to think about it in everything, everything. I have many things that I talk about that it just apply to everything in life completely. To what, right, the Jason Hartman question compared to what? Right? It’s an amazing time to be alive. That is true even with all the crap that’s going on in the world and the country, no question about it. And then the concept of the profound impact of things unseen, or things that the profound impact of things that didn’t happen, how about considering what never happened? But what could have happened when we analyze things, and those are concepts that just can be applied everywhere in anywhere in life. We talk about them in economics and investing mostly, but they can be applied anywhere. Oh, hey, by the way before I go too long on my tangents, we have the second half of hedge fund manager Hugh Hendry Today on our weekend edition, so we’re gonna do part two of that today. And then tomorrow, back on our weekday schedule, we’ve got a bunch of great stuff coming at you and not the least of which Is our client Ross Warden, who I did an interview with, and I’m not sure we’ll run that one this week or next week. But I gotta tell you, he shared with all of you. And thank you, Ross for doing this, a fantastic little spreadsheet that he uses to show how he is going from zero to 93 properties in 10 years, a very realistic, well considered plan. And we are going to make this available as a calculator. He shared the basic spreadsheet and we are already enhancing it. Doug has been working on that for us. And Doug is like the master of spreadsheets. You know, you give that guy a spreadsheet and what would take me a day to figure out he can do in like seven minutes. So yeah, I just worked up the little genius spreadsheet for you. Okay, Doug, thanks seven whole minutes of your time, but people speak different languages, some speak English, some speak spreadsheet, right. So, anyway, Doug is enhancing that spreadsheet and we’re gonna make it available to all of you and you’re gonna love this. So that’s coming up on a future episode here, not too far away, but the greatest management management principle in the world. And does it apply to police brutality? does it apply to idiot looters and rioters and they are idiots by the way? Listen, I’m in favor of a protest. People have the right to redress the government, of course, but these people are morons, losers, idiots destroyers. There’s two basic kinds of people in the world. Those who add value and those who destroy value. These are the destroyers of value. Okay, and listen, all you have to do is watch any of the videos just turn on TV or go on the internet and watch the videos and look at you know who the destroyers are right? They’re the lefties. They’re the over entitled people. They’re these idiotic University brainwashed white kids who think they have a cause and they don’t and by the way, all this is coming from someone who actually supported, at least in principle, the Occupy Wall Street movement several years ago, remember that? Yeah, I was actually in support of that because Wall Street is a scam. It’s the modern version of organized crime. So I’m not being too dogmatic here, right? I’m not being an ideologue. I’m looking at the specifics of the situation, these morons who are destroying all these places, you know, it’s the greatest management principle in the world. And we’ve created the problem, the responsible people in society have created this problem. Because we did not follow the greatest management principle in the world. What gets rewarded, gets repeated, what gets rewarded, gets repeated. And look at all the places in life where that applies, does it apply with your spouse, your kids yourself? does it apply with yourself? Do you reward yourself for things that are not necessarily good for you. Yeah, we all do that sometimes right? overeating, smoking any, any form of any kind of addiction whatsoever. What gets rewarded gets repeated Just think of it internally, externally interpersonally, you know, in a company in a nation in a world, and we’ve created this disastrous welfare state, the left has decided, let’s just import people from foreign countries illegally, and let’s let them overrun the country and get a bunch of free welfare. Let’s attract them here. And so we’re just going to make the economy turn it into this meemic disaster. And it’s a mess, and they just want to do that so they can increase their voters. Right. The government has a big incentive to make people dependent on it. And Hugo Chavez in Venezuela. This is exactly what he did. And this is why for a time he was so well liked. He just doled out the goodies. You know, there’s the song I think it’s by sticks from years ago, it’s called too much time on my hands, and the guy’s unemployed. And that’s what the song is about. And he’s in a bar buying everybody drinks or something like that is part of the lyrics. And you know, you can have all the friends you want if you just give them free stuff. So this is the game plan of every politician. And this is why we will be enriched as real estate investors, because politicians always have the incentive to dole out the goodies and to spend, spend, spend. So look at none of us like this, or at least not none of us smart people like this philosophically, but we can align our interests with it and benefit from it. Okay, we can benefit from it. And that’s what we’ve got to do. Because the likelihood of changing it is very, very low. Before we get to you one more thing. So remember, what gets rewarded gets repeated. And if you want to get the right things rewarded. Go to Jason Hartman calm and check out our properties. Join our way webinar, Jason Hartman comm slash webinar, check out some properties in more detail on the webinar. And this one’s a real short one, just about 30 minutes long. So I think you’ll enjoy that. Okay, this article is from CNBC. I want to just share this before we go, maybe we’ll take a deeper dive into it later. But just quickly, Millennials are fleeing big cities for the suburbs. Now, the interesting thing about this is this was actually an old article. It was published back in September of 2019. This was pre COVID. I did not see this article until just now but breaking news Millennials are getting older. And as they enter the next stage of life, marriage, kids higher salaries, Gen Y is beginning its exodus from busy cities, just like generations that came before data released from the US Census Bureau earlier this week. Show that some 20 7000 millennials between age 25 and 39 left big cities like New York, San Francisco Houston in 2018, for greener and less expensive pastures, you know, I would argue that Houston is not it’s nothing like New York or San Francisco and Houston is the suburbs. What are they talking about? I mean, I guess you know, just downtown Houston. Sure. But Greater Houston, which is a very large Metro and hundreds of our investors have purchased properties there. I certainly have done very well with them. I would consider that the suburbs. But hey, listen, this is the mainstream media, right? You’re never going to get a granular take on things. Okay. So anyway, in 2018, they left these places for greener, less expensive, expensive pastures in New York and San Francisco. Certainly that’s accurate, but putting that in the same categories is Houston is crazy. Chicago, Las Vegas, Washington DC, and Portland, Oregon, are also seeing large numbers of residents leave now interesting. Some of these have the big government, high cost of living big taxes problem, Las Vegas. It’s kind of an odd bird. That’s sort of a different category. Anyway, whatever. that marks the fourth year in a row, that there has been a noticeable decline in millennial populations in major cities. And where are they moving? To combat ever increasing housing costs and lack of access to family friendly amenities? They’re moving to nearby suburbs, mostly as axios reports. So that’s pretty interesting. So that trend, I guess it was already happening to some small degree but now, like everything else, COVID has accelerated everything. Everything has accelerated with COVID. Well, except business, the restaurant business has certainly not accelerated, the spa business has not accelerated, those have been decimated. Sadly, so many other things have really accelerated in by the way on the good side, these efficiencies and we’re going to be presenting some of this in our upcoming meet the Masters virtual conference, these new technologies for self managing properties for showing properties, the virtual leasing office, wow, there’s some great things coming your way investors, you’re going to love this stuff. I’ve really been trying to look at the cutting edge of this, of these technologies, which by the way, are not like some new technologies. It’s just that now they’re making them better. They’re refining them, they’re making them easier to use, and the adoption rate is through the roof. What does this mean to you more efficiencies for your real estate portfolio and that means greater return on investment for you, more money for you more financial security for you. So lots of good stuff like that coming up at our meet the Masters conference, and also on future episodes of course. Alright, without further ado, let’s get to part two of you.
Hugh Hendry 20:04
Give us some predictions gold, Bitcoin, the dollar asset prices, consumer prices.
Hugh Hendry 20:12
Okay. So predict predictions of for the birth, okay until the invent a time machine. I mean yeah, and you know, we’ll have to get Elon Musk on here once he has conquered Mars, we must reroute his intelligence to designing a time machine. They don’t exist currently. And so I have not been to the future. And and predictions. I just higher predictions are from morons. And I’m an oxymoron as I stated earlier, but what can I say? I feel as though the I’m guessing the majority of your listeners are based in the UK or kind of have an affinity to to calling themselves American majority. I mean, we have listeners in 189 countries. So I’m waiting, you know, whew, I’m waiting to get North Korea and Cuba online, but Oh, well. Why is they’re probably using a proxy server and with their VPN, and they’re probably listening right now. Yeah. So I want to say that I feel as though actually America has been taken hostage, and that if you’re a US citizen, you are a self. You’re always like a slave to external forces, the external forces being other economies. I want to say China is kind of one that China has pimped America. And secondly, financial speculators have pimped America.
Hugh Hendry 21:36
speculators for sure. No question about that. China? I don’t know. So you’re bullish on China ban. Hmm.
Hugh Hendry 21:42
didn’t say that. Okay. I said that the US by its own admission, it had an ambition to have the dollar serve as the reserve currency answerable to no one. The currency or commerce is the US dollar and through a whole series of crisis in Southeast Asia in the late 1990s, they really reinforced the point, if you’re going to run the Thai economy or the Malaysian economy, or indeed the Chinese economy is run effectively on US dollars, that’s amazing. And for them to grow, profanity creates a desire for more and more dollars. And it’s the Federal Reserve that has to produce those dollars, right. And when there’s a crisis that emanates a crisis that begins, like a hurricane that begins offshore, offshore to the United States, is the US that has to react is the US that has to print those $60 trillion of annualized dollar bill issuance and one week in March because of a crisis that began and move on. Yeah, I’m not in Detroit, if you will, okay. So probably you get what you want. And so the US policy Have a load the each step along the road the twisted world of history. And decisions got tougher and tougher and tougher, though fac in the, in the late 1920s policy makers were zealots. Okay? And so you’ve got a choice, okay, your choices this, you can have policymakers, like we hired in 1930 at the US Federal Reserve, and kinda like Paul Volcker at the Federal Reserve in the late 1970s. And they are, they have an ideology, which is hard money, the dollar has to be strong, and it has to protect the purchasing power of the US citizenship right at all costs. And if we use the language, kind of which was there around the US elections in the 1890s. Effectively, those policymakers were willing to sacrifice the US, household and to Christmas. Fire on a cross of gold on the on the ideology of hard money.
Hugh Hendry 24:05
Yeah, I agree that goes too far. It doesn’t seem practical nowadays.
Hugh Hendry 24:08
And I at its peak, you had Andrew Mellon, the Treasury minister, treasury secretary for the US 1930s and his famous thing, let’s raise interest rates and purge the system of its rottenness. Let’s clean the stables. Yeah. And what happened? You had 20% unemployment. Yeah, you had a generation deeply psychologically scarred by the human tragedy.
Hugh Hendry 24:32
Okay, multiple generations actually.
Hugh Hendry 24:35
Yeah, that ended so or you can have today and really today began. I mean, it kind of began in the cloud with Greenspan, like you said he’s he was a smoke and mirrors guy. He didn’t reveal himself. There was there was a lack of democratic check on him because he refused to reveal what he was doing. And Bernanke he really is the architect and really the person who might The beginning of the polar opposite, there’s nothing in between. and the polar opposite is blanky. I want to say, at the bottom of the bear market after the TMT crash, but Bernanke, he put his hands up, he said, I am here on behalf of the Federal Reserve to apologize to the US household. I’m here to apologize to your grandparents, to your families that were made to suffer for generations, because my predecessors pursued a hard money doctrine at the expense of everything. And
Hugh Hendry 25:33
he was out of the depression to you know, that was his thing.
Hugh Hendry 25:36
Absolutely. And he said, if it happened, or into an ideology that wasn’t necessary, so here we are, now, we’re in another world, and you can do fair and fair and the fair. And the notion of a great depression and that human tragedy, and that’s what the Federal Reserve Purdue, and they’re getting it, they’re getting a backdrop for it.
Hugh Hendry 25:58
And they’re getting upset. Rap from is that sort of from the Peter Schiff type camp of the hard money, the ron paul Peter Schiff type of camp, that
Hugh Hendry 26:08
it is a huge contingent of the financial base that was owning Bitcoin and gold shares are very much older. I know, like passing judgment. I’m simply saying that this is ideology. And the, and it’s like this kind of strategic game. And what people forget is that it’s not checkers on a board. It’s real people. Yeah, okay. And the performance, or the fiercest critics of the Federal Reserve can really offer a solution they can’t, they can’t offer an alternative or find two words in their mouth because they don’t really offer the alternative but the if you’re to the parch, the system of the rottenness that means enormous bankruptcy. And again, it means it means a redox of the 1930s that’s What it needs, right?
Hugh Hendry 27:01
And the thing about it is all of those sort of hard money crowd. They’ve been saying that stuff since Well, I mean, probably forever. But Howard Ruff, if you know that name from back in the 70s, I remember and through the 80s 90s 2000s, and he was on my show, and they’re just always wrong. These guys are just always wrong. They make like really interesting arguments. I love listening to them. But it just seems like we are actually in a new world. And when you have the reserve currency, when you have the biggest military, you can kind of defy the laws of math and physics, at least for a long time.
Hugh Hendry 27:41
I am not here to cast judgment on who is right and who is wrong. And I think actually, that when people form opinions, and maybe more people are entitled to their opinions, I’m not expressing your opinion in terms of the veracity or smartness of anyone elses. argument I have my own problems. But what I want to say is that we make geniuses of people or mostly going to circumstance and and the time in the cycle. And these cycles, kind of the almost the run as long as an adult life, which is to say 40 or 50 years ago, we spent 2025 years being kids and being too stupid. And then we spent 4040 to 50 years kind of trying to wizened up and and so that’s that’s like one of the one of the outer planets going round I think is I said this before someone corrected me as a Saturn or something. It takes it takes us one year to grow in the sun, some planet CNC to be 200 years, you might never see snow. If you saw snow. You’d be like, Oh my god, what is this stuff? You know? So we’re conditioned by a very slow passage of time. The thoughts with regard to hard money and you name some people like Peter Schiff. They’re kind of relevant today in the sense that gold has got a post Gold’s been trending gold changed its behavior in the year 2000 to 2003 exited a bear market, and it kind of has heralded and told you that the Federal Reserve was changing from this hard money ideology to we will do, we will go to all Lance to save the American household. And there will be consequences. The consequences are being fell at the political economy level, where again, when you feel you’re being taken hostage by the overseas sector, then the greatest fear is that we get closer and closer to conflict. Just know the conflict seems to be over over trade nature, but God forbid that would like carry over into military conflict, but that becomes a potent risk at times like this. This is one of the unpleasant side effects of the Federal Reserve’s policy. The other one is again, when you are when you’re being pimped by the finish nancial community, then, again, it’s the 1% debt to only economy, that will that is fomenting political revolution. You have Donald Trump today, we have Brexit in Europe, we probably have the inevitable breakdown and failure of the European project because of the Federal Reserve, the Federal Reserve and other central banks ideology of avoiding all crisis.
Hugh Hendry 30:26
Again, I think you should try and avoid all crisis. But let’s understand the pitfalls are really, really hard. And one of those pitfalls It sounds like you’re saying his concentration of wealth because you know, what seems to happen and it’s so hard to work out. I mean, you know more about it than I do for sure. But is that whenever you have all of these stimulus plans, just the people that are just kind of closest to the money, you know, the people that are in that system, they get most of it and, you know, the little guy gets A couple of shekels, and that’s about it
Hugh Hendry 31:02
with Assad. And it’s just not free enterprise. Yeah, I struggled. I hesitate, because this is, yeah, this is a global pandemic, you know, where the statistics kind of say that really, I know it’s not influenza. And but you know, we have developed a mindset where just one life is worth sacrificing the US or the global economy. And we’re kind of the wrong way round. And so our thinking, what I’m, what I’m struggling to see is that 50 years ago, we were on the transition point from chaos into order. And the hardest thing about our life today, 50 years later, is that we’re at another pivot point, but sadly, we are pivoting from order the accepted belief system today is one of order, right? And we are pivoting into a war of chaos. That’s the challenge.
Hugh Hendry 31:59
Okay, so before There you go. Just enlighten us a little more as to what that chaos looks like, if you can I know we got to wrap up here, but
Hugh Hendry 32:06
that’s on to that in the in the inverse. What was chaos? or less? What? What did we do to reimpose order, we gave central bank’s independence. And we said, hey, look, you know, bring on a recession to you, we are central banks, to control and to constrain the creation of dollars. That’s just two examples of what we did. Another example would be, we liberated the world, we use the great poster of the American dream. And we projected that onto this blank canvas of the rest of the world and said, Look how wonderful this is. And in doing so, we brought down the Berlin Wall, and we liberated literally billions of people from tyranny into a war more recognizable as our water Okay, and, and then let’s think of where we’re heading. We’re heading into a world where the central bank is less and less independent. The central bank works for the man and works for them. The chief of state, right? We’re looking at what are this, the central bank is not trying to reduce inflation, it’s trying to increase inflation. We live in a world where rather than reducing the money supply, they are desperate to increase the money supply. And we’re living in a world where that whole liberation of liberation from tyranny is being rolled by and this awful virus thing is perhaps going to make us less of a connected world and more of a disconnected world. And so that’s, that’s what I call the early signs of the chaos which awaits us and that chaos within you have this portal of time which is no wing upon us. A flight path like a chaotic world that I could see is the you know, the dude like the boy and put his finger in the down. The Fed put their finger in the dark In March, and they stopped the cascade this they stopped the prices from falling by the pressures, I think gonna mount and mount because, you know, it’s so bad for commerce. I mean, here I am in sin bars Do I go forward and invest in my mind, but I’m gonna make a decision in the next two weeks whether to go forward with a $4 million construction project. And I don’t know if there’s going to be any airline to bring my American clients from New York
Hugh Hendry 34:28
to say, boss, it’s a fair question. Yeah.
Hugh Hendry 34:31
So and if I don’t spend that $4 million, I’m just one guy. Yeah, okay, one can a rich guy been just one guy? Yeah, I think what you could see and let me I’m not saying this is gonna happen. But this is the chaotic world. The Fed and its finger the pressure against the s&p, which is rally to where’s the s&p today like 2750. Let’s see the s&p it could plunge again and then the two 2000 are less than 2029 55 2015. You guys underestimated 2950 the high was 30 to 50. So we’ve always gone back to the high. You need you got the biggest investor in the world, you’re buying up assets. The Federal Reserve, the biggest investor in the world is when you and I become fearful there is a central bank that can hold us back. Because you and I, and our resources and our access to leverage and when we have fear, nothing can take us on. Okay, this is all just a game of confidence. So anyway, I can I can see the world. I could see financial markets getting slammed and falling again and then the Federal Reserve and the US government come in with another package. And then everyone gets loans from the government and then they say, you don’t have to pay is and then we start really printing money. And then everyone goes holy. I can’t own 10 year treasuries at zero and interest rates start moving in hola so I can see a word. I hear the world that I could see would entail the s&p trading at five or 6000 in the next five years 10,000 in the next seven or eight years, and then that would not be pretty. That would be a tragedy. Yeah. Wow.
Hugh Hendry 36:14
That’s something Yeah. Who knows? Well,
Hugh Hendry 36:16
I don’t know. For sure. I don’t know. Okay. But my franchise for the last 30 years was like this capricious, there’s always like weird things happening, not just the financial markets, in day to day life, your work, you always hear that expression. Who would have thought, you know, who thought well, kind of my own little world, I’d be like, I kind of thought that in 2008, I kind of thought that gold actually could embark on like three decades of a dramatic bull market back in 2002. Back in 2012, I said my role is no longer to be this moral curmudgeon commentator on the moral philosophy of the US Central Bank. And so my role was just to Be contentious. I am not claiming any ability to see the future. But I would want I would counsel your audience. And I’d ask them just one thing in terms of preparation, think of the most chaotic events and begin to think of them becoming normalized and then trying to think how you can profit from chaos as opposed to order and that’s going to be very difficult because for 50 years we have trained our sing our minds to think or do it yeah. And now you and that’s fine. Look at me like people want to hear me Look at me. You know, I look like a financial dilute like Jimmy Rogers. No,
Hugh Hendry 37:39
you don’t know. I was your bow tie.
Hugh Hendry 37:43
This is the face of the future. This is chaos, my friends. You heard it here first. That’s pretty good.
Hugh Hendry 37:51
Sammy that 20 seconds.
Hugh Hendry 37:55
That’s a good clip right there. I love it. That’s perfect for your Twitter feed. Just this is chaos.
Hugh Hendry 38:01
So the last chaos decade was the 60s or into the mid 90s. Chaos comes. It’s the transition between 40 and 50 year cycles. So I’m seeing that we had a cycle of access, a cycle of exuberance, which facilitated and enabled the US economy to leverage up. And typically the ratio is up to buyers. They’re three times incomes. Yeah. And that concluded spectacularly with the crash, right? The crash was made 10 x worse by the ideology of the Federal Reserve. I then say to you, we spent 40 years de leveraging at the bottom of a deleveraging cycle, everything is cheap. So here I am, the Caribbean, as you know, Richard Branson, the virgin entrepreneur, he buys an Ironman. Yeah, I’ve been there twice, once a billion dollars, but at the bottom of a deleveraging cycle, he says, I’ll give you 100,000 the guy says, Thank you very much. I think Necker Island he paid $177,000 400 but he wanted a new one and he agreed on 177 Yeah, that’s what happens at the bottom of the cycle Okay, and you get the chaos. The Chaos is the UK goes bust it has to call in the IMF. The Chaos is the Latin American crisis that chaos is the Petro dollar currency crisis is queuing for oil. The Chaos is inflation. The Chaos is the backhoe of the American hostages are suddenly thing we used to be America we used to be great. What happened? Yeah, that’s the chaos right there and you say well, give me Titleist kick these morons out let’s kick harder, right. Let’s bring in Reagan. Let’s bring in Volcker. Give me your turn. Right. That’s 7980 but today is 2020. Right. And today, it’s like I’m caught I’m so rich that I don’t punish me with higher interest rates. So you know what? We’re going to punish you with chaos. Baku up. The right is going If he is going to be doctress interesting don’t punish me with higher interest rates so the pressure to leave these negative interest rates or you know real negative interest rates so you probably agree out there it’s a funny time you agree it really is well, it’s the Chinese curse May you live in interesting times. We may be imposing or you may be imposing trade restrictions on on their products entering their states but they have imposed interesting times on us so
Hugh Hendry 40:30
no question and that quote used to circulate a lot around in 2008. May you live in interesting times and in here it’s back again. So you have some good stuff out there on Twitter etc. share link or wherever you want people to find you.
Hugh Hendry 40:44
I am defying convention, because I know financial freedom don’t like Instagram. I don’t wear a bikini and I may have to bet I’m desperate. I become a social influencer. I think a lot of those guys went out of business and Instagram. Well, I like I said I want to read chaos so everyone I want people to be training people to think chaotically My passion is my Instagram account which is Hugh Hendry official and but really my fault my followers my tribe if you will to be found on on Twitter and it would be the inverse of my name to be asked Hendry underscore hue. And you will find me there to come is I’m soon to come is my my YouTube. My YouTube page is not finished up.
Hugh Hendry 41:31
Yeah, good stuff. But folks think about how chaotic what he just said is how many hedge fund managers do you find on Instagram? That’s for 20 something girls in bikinis, you know, and social influencers right. So yeah, very interesting. You thanks so much for joining us today. It’s really been fun talking to you.
Hugh Hendry 41:50
No, thank you. Always a pleasure.
Hugh Hendry 41:57
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