Inflation is Taking Down the U.S. Economy as Many Prepare for Another Great Depression

welcome to sax Realty's Tuesday night podcast where we talk about anything and everything real estate each week we deliver expert information enabling you to make better informed decisions while keeping more money in your pocket if you're interested in real estate this is your show change that intro to uh if you're interested in real estate or anything politics or geopolitical and John Rabino we need to just had that that would flow really nice as an intro Happy Tuesday everyone we are excited about our guest tonight if you don't know who he is you're going to love him uh he has been live with us before we have also pre-recorded some shows with John and I just want to say and I'm not just plugging him I'm just want to say that you all will want to cruise over to his substack and we're going to talk about some of his his writing tonight uh but amazing guy amazing guest John welcome to the show man it is so good to see you my friend hey Todd hey bless it good to see you guys again yeah we're excited what's the weather Lake out west where you are uh it's getting gorgeous finally um where where I am in the Pacific Northwest um Winters are you know they're not scary or anything but they're dreary and we're just coming out of that right now so I I am so ready I I have 20 um trips all scheduled at least in my own mind for the next six months to get out into the into the you know pretty places that I haven't explored yet I thought you were going to stay all in your backyard it's nice back there too but uh but there's other things on the list well I have to tell you you know when I'm thinking about and this is totally irrelevant but Rachel Carlson wrote a book called Silent Spring and it's about pesticide you has nothing to do with the housing market but when I think of what's going on right now in the housing market I all I can think of is silence spr this is like the spring that isn't uh the weather's getting nice outside the housing market is terrible uh it's still unaffordable we are seeing where price reductions are happening in a lot of the country we're not seeing a whole lot of it here in Maryland uh we're still seeing an inventory shortage which is really u a surprise but we are seeing something very interesting that finally is starting to show up the um what I call um you know the the uh the Crooked media or mainstream media uh the one that suppresses information and only likes us to tell you things that are you know uh what they want to push out uh and you know it seems like so many things are hidden from us uh we don't hear about the uh the the loan defaults and the the loans being bundled up by Fanny May and sold off to uh you uh buyers of these at a discount of these bundles of non-performing loans or rep performing loans we don't hear anything about uh what's really going on with the economy other than stories like you know retail numbers have never been better and they don't say that along with that is everybody's throwing their debt on credit cards we don't hear the truth about we hear one-sided narratives and stories but it's very interesting and we will talk about it tonight that we actually and I have three articles pulled up where they're talking about the new housing market where cracks have finally showed up and inventory uh we are seeing a major downturn in new construction starts as well as new permits being pulled and for those of you that have followed along with us uh in this with this housing market stuff um you know that uh it always happens first in new construction so now that we're starting to finally see the cracks happening we at least they're reporting it it's been happening last October we saw one of the worst new uh construction uh statistics saying that uh that the uh the price declines were were really major last fall um but but they kind of smooth right over that uh those details and uh and you hear people like Barbara Corker and and uh and and and those like her that are saying if you don't buy now the housing market you're going to be sorry and uh that that as soon as these interest rates come down of course they're only going up uh right now with the tenure treasury hitting 5% which is crazy so now we we're finally starting to see what we've been telling you is coming for quite some time but we're going to dive into some other important top topics with John but Melissa good to see you as always good to see you like I haven't seen you in a while I know it's been just a little bit since earlier today yeah two hours exactly hi everyone um great to be here this evening and John Rabino so happy to have you back again so fortunate that you are our guests looking forward to seeing what you have to say especially about everything um political you know what's going on with our world there's a lot going on and it all trickles down um to what is we're seeing in the housing market as well um I know personally I saw gas prices on the rise today and I think that unfortunately we'll have more of that in the future drones being shot out of the sky yep yep to talk about terrible terrible terrible please let us know your questions for John and I'll be happy to um get them answered for you yeah so John tell everybody who you are man I could do it for you but I may miss a thing or two so just let everybody know what we are in store for here tonight okay I'll give you the super short version of kind of a winding story of my life I'm a you know Finance geek um I was on Wall Street for about 10 years as financial analyst then started writing and was a tech stock analyst during the tech stock bubble and um then set up a site called dollarcollapse.com ran it for about 15 years just sold it now I'm on substack with a newsletter that is um is aimed at actionable um ideas for getting through what's probably going to be a really crazy decade and there's no shortage of those either yeah the last time that we spoke we were talking about the debt crisis some of your opin on where things were headed it's been I don't know three or four months John has your outlook gotten better or is your uh you know sort of your your U your thoughts coming true yeah it's it's all the bad stuff coming true because we're continuing to borrow more money you know week after week year after year the U the US government debt is basically going straight up now it's going parabolic in part because we borrowed way too much money in the past um at extremely low interest rates and now we're raising interest rates and that's making the government's debt more expensive so we're paying a trillion dollar a year right now just in interest and that's going to go up to 1.6 trillion um in 2025 which means basically we're we're running crisis level government deficits just to pay our interest and there um there's a term called a zombie company you know that's a company that can't survive can't even pay its own interest out of the money it takes in um and we're creating governments around the world that are kind of in that situation now where um their interest expense is starting to approach their tax revenues and that's that's the death nail for government when it happens and it's starting to happen around the world and the US is marching along with some of the other ones heading in that direction so yeah so things are not getting better they're getting much worse and it's playing out kind of as expected because there aren't really that many other ways for it to play out you know once you start borrowing a huge amount of money that you can never hope to pay off you only have a couple of options and we're in the um the two option phase of this now where we have to decide between a 1930 style um deflationary crash where we we default on all our debt get rid of it that way or a some kind of ymr Germany is hyperinflation where we inflate our debts away and that's it those are our choices and one or the other is going to be picked in the next few years and it'll play out in the few years after that um and that's what we have to look forward to and it's a you know terrifying well it's fascinating from the point of view of you know an economics nerd somebody who really um is interested in how these things play out but it's terrible for everybody else you know it's going to be a terrifying five or 10 years and for a lot of people very destructive you know lives will be destroyed by the financial crisis that um are pass mistakes will bring into being pretty soon you know you you say it's fascinating for uh scholar Economist I just we were talking a little while ago and I was telling you that I had podcasted with Steve hanky he's a professor at John's Hopkins and um he had some very interesting things to say actually that video comes out this Saturday at 9:30 a.m. eastern time uh but he we were talking uh about um I was getting his opinion on whether he thought that the US was unraveling and he thought that it was and uh we were talking about uh exactly what you said uh when you look at the Great Depression when you have uh such an expansion of money supply like we experienced during 2020 2021 he said that there's only ever been since the creation of the Federal Reserve in uh in 1913 that we've only had four contractions of the money supply and of each one of those contractions we have had recessions or we had the Great Depression and um and this is the fifth time according to him that it's ever happened that we're now starting to see this contraction of the money supply but we also spoke about about things that were kind of kind of scary uh we were talking about how um Empires fall and and that's one of your substacks I want to cover you know how countries go bankrupt and and we're going to talk about that tonight the 10 steps that you wrote about um with that but we were talking about the dollar being the reserve currency and he referred to it as the dollar being the king and we've had Kings before in history and I think he said 14 Kings and basically talking about currency you know money and um and he was talking about the dollar and he said that with the US he was talking about how the dollar was being weaponized and with all these sanctions and now that we're seeing this unravel you know with Russia and China and you know I mean the bricks nation that are nation that is rising up to create this other uh currency to not to knocked down the the dollar and I saw another interesting fact and i' I've said it on my show before but when we looked at Gold I mean not gold oil trade in the in the global uh economy oil trade prior to last year for a very long time it was all um traded using the US dollar but in 2023 a fifth of it of the trade was not we didn't they didn't use used dollar currency so I thought that that was kind of interesting too any thoughts on that did you hear did you know that that that the dollar is losing its preeminence in well that too but just the fact that the oil trade uh in 2023 that a fifth of the oil trades weren't did not use the the US dollar where it had for what we would consider is Forever In Our Lifetime yeah that that's a a pretty big deal basically this the store story um with regard to the do to the dollar in oil is that back in the 1970s Henry Kissinger um visited Saudi Arabia and cut them a deal we we the US would protect them militarily and they would only take dollars for their oil and that created something called the Petro dollar which was one one of the reasons that the dollar was the dominant currency in the world ever since is that if you needed oil and you do need oil um you had to get dollars in in order to buy that oil so everybody had to have dollars so all the world's central banks loaded up on dollars as the reserve assets and every big Trading Company had to have a big dollar balance because they were going to need it and um and so the dollar was an incredibly strong currency because it was under it was in extremely strong demand around the world now we abuse that privilege having the world's Reserve currency gives you incredible power and we took that power and we used it like a club to bully other countries and um you we Ed it as a weapon if uh if you didn't did something that the American Empire didn't like they would kick you out of the um the Swift global bank settlement system or they would um sanction some of your products so they couldn't be sold in different places and they could just break your economy or they would send the CIA in to destabilize you and you know replace you with a dictator or something like that but but basically we did that and we have continued to do that since the 1970s and it's just getting worse so um Rising powers like China and Russia and India are kind of understandably frustrated by being second class citizens due to the Dollar's Reserve currency status and they're looking for ways around the dollar so they're they're cutting deals with each other where they use um rubles and Yuan for trade between China and Russia and um they they um use um the Indian rupes for other kinds of trade and you know it's kind of Patchwork it's not this big overarching global trade policy but country by country bilateral deal by bilateral deal they're bypassing the dollar so the Dollar's role in trade is shrinking it's still dominant and it'll continue to be dominant for a long time but um it's it's not as dominant as it once was and the trend is pretty clear that you know it's heading in the direction of countries bypassing the Dollar on on a larger and larger scale and that weakening the US's ability to use the dollar as a weapon so it's a long-term process and it's uh you know it's not going to complete itself within a year or two years or five years but we're headed in that direction so it's something everybody should understand and they should understand what the bricks Nations represent that's a really L loose Coalition of countries that are kind of frustrated with the US and would like to be out from under dollar hegemony so they're cutting those trade deals with each other and they're talking about maybe um setting up some kind of a currency that's backed by gold that they can use for trading with each other and they're buying a lot of gold uh right now one of the reasons that gold is going up is that central banks in the East not the west but China and Russia and India and and central banks like that are buying a lot of gold and that's pushing the price of gold up but they're still buying you know because they they have geopolitical reasons to own gold it's not a trade where they're hoping to make some money and then bail out they want to uh to accumulate something other than the dollar as a reserve asset to to back up their currencies and they're choosing gold for that so this is like I said long-term process not going to happen overnight but it's a very big Trend that's had heading in a really ominous direction from the point of view of us Global dominance any thoughts on what's going on in the Middle East right now it's terrifying um on a lot of different levels because all right first of all um the Middle East is where a lot of oil comes from now this is kind of weird for the us because we're we're deeply involved in protecting Israel and and uh and trying to suppress the expansionist plans of other countries in the Middle East but we really don't need their oil um the US is almost um energy self-sufficient ient um but Europe is not yeah almost but but and the reason we're not completely self-sufficient is isn't because we're not producing enough oil is that we're not producing enough of the right kinds of oil to feed all of our um refineries so we have to buy certain kinds of oil from overseas at the time same time we're selling some kinds of oil overseas so it's uh you know it's it's not really that threatening because if we needed to we could just set up refineries that use the kind of oil that we produce and natural gas of which we produce immense amounts and we could be completely energy self-sufficient so what we're doing basically in the Middle East is protecting Europe's um energy Supply which is kind of strange when you think about it you know you you would think they would be protecting their own energy Supply but um but that's what's happening okay that on on one level that's very scary because if we you know if the war spreads and um the oil supply from Saudi Arabia and Iran is interrupted then we could see oil Spike to $150 a barrel that would be a crisis for the global economy but that could happen very easily it's happened that would affect us right I mean that would even despite our ability to fund our own Supply or produce our own Supply what I mean however it would work its way through we're going to see it the pump yeah if if the global price of oil goes up then that affects us too it's it's true and uh you know that would be very really inflationary for us here right now which we we can't handle you know the the average American family cannot handle more inflation right now because their cost of living has already gone up by 30% in the past four years so more than that would be destabilizing and so that's one issue and it it would cause equities bare markets all around the world it would just crash stocks probably probably cause interest rates to go back up and now now what does that sound like it sounds like the 1970s doesn't it which was a you know most of um our listeners are not old enough to remember the 1970s and I I unfortunately am you know I I remember it pretty well yeah and U you know that that was a time when the dollar was tanking and inflation was spiking and interest rates went up to like 18% in in some cases uh and then the end of that um in in the early 1980s was a massive recession with a big drop in stock prices so that that would be really destabilizing too and that's totally conceivable if the Middle East blows up and oil spikes and the the final reason why this is so scary over there is that because because the US and Israel are becoming isolated around the world and um that's very dangerous you know we we kind of um we've been as safe as we have been over the last 30 or 40 years because we've had coalitions that we more or less could trust and they could more or less trust us and uh that that kept the world relatively peaceful it wasn't peaceful but it was less peaceful than the World War I World War II uh 50 years um and that could fall apart if the US and Israel are so isolated by this that um that nobody wants to be on our side geopolitically anymore so all of that stuff you know oil spiking and uh and a broader Mast War and the us being isolated that's all um at risk right now in the Middle East so that's a very scary situation well I know it's however this plays out it could be very bad for this election year for the current Administration no doubt I mean the last thing you want as a president trying to be reelected is uh an economy that's falling apart or inflation that's running away we know inflation isn't it's not it's not really coming down I mean you know uh I I don't know what you know you you can talk about how it it is coming down and we're at 2% or whatever it's not coming down I mean prices are high and people are strapped financially we're seeing it we're really seeing the housing market Tank Man I mean it is getting so slow we are seeing I started off talking about how we have like a Silent Spring going on the inventory is still not coming on the market and buyers are just so many of them are just saying forget it um we're kind of throwing in the towel for now so we'll see I don't know what's going to happen as the uh as we get closer to the election but um I want to go over some uh I tell you and I and I love your substack and guys if you if you don't know John Rabino get to know him um I subscribe to his substack which I highly recommend you do as well if you're interested in what John has to say you can tell he's he's very um up todate on what's happening right now you know current stuff that's affecting us Americans there there you go Joe pulled up his substack there but I want to talk about some of the when I'm reading some of it I'm like you know I see everything kind of deteriorating in around us and sometimes I feel like I don't know I just need to stop talking about it or maybe just go on vacation or something but I'll probably be disappointed if I do because I won't like the restaurants service that is out there right now or the food that's being prepared or the attitudes of a lot of the workers and it sounds very negative but if you guys I mean it's it's so much is going on it's it's like I I feel like something major is about to happen or change because it almost feels like it has to but when I read some of your substack it's it's so eye openening because what I'm thinking or what I'm seeing it actually gets confirmed in your work John and I want to and this has nothing to do with John we're not promoting this guy but I've known about this guy Martin Armstrong and I want to talk to him talk about him a little bit I've been trying to get him on the show if you guys are out there Martin you're listening I'd love to have you on our show uh but Martin Armstrong I'm John I'm going to let you sort of talk about him because you wrote about him last year and we started off this show you and I they put him in prison they locked this guy up I don't know if he was ever formally charged or whether he was just able to walk Scott free but tell everybody a little bit about Martin Armstrong and then I'm going to ask you some questions about what you have written here and sort of like his quotes um so what you told me the guy developed some kind of a like a algorithm or program that predicted bad events right maybe good events too but yeah he's an economic consultant who uh has a really good track record for predicting big events going back a couple of decades and um his you know you could call it an AI he calls it an AI and I I I don't know for sure you know exactly what form that takes but um he says it it puts us firmly in a war cycle right now which is a time when uh you know when when what's happening today happens you know only on a much bigger scale so um we're we're not going to settle the things that are happening out there right now they're probably going to get worse new new kinds of conflicts are going to come and that's basically just the cycle that we're in right now and he said say now here's where it gets interesting from I guess from my point of view because I I've disagreed with him over the years about this and I've always been wrong he's always been right but he says the um you know the US is the cause of a lot of the trouble in the world were run by neocons neoconservatives who basically believe that the US with 5% of the world's population should rule the world and their plan is for us to fight a series of wars in which we take out the other major players like Russia and China and then we basically just enslaved them you know we use their resources we use their workforces to run a global us-led Empire okay those are the people in charge of our government right now according to Martin Armstrong um and that's terrifying it is terrifying yeah now but but here's where it's counterintuitive he says that yeah this is all happening it's mostly driven by the us but it's good for the US Stock Market because um trouble in the rest of the world sends Capital out of the the place where there's trouble and into the us because we're still seen as the safe haven for Global Capital so somebody let's say we pick a fight with China okay the Chinese Millionaires and billionaires move their money out of China because they don't want to be there if there's a war well where are they gonna go they're going to go to the US so they're going to buy Blue Chip US stocks and that's going to drive the big us stock index indexes up so even while all this trouble is going going on around the world caused by the us we're going to have a rip roaring bull market in US equities is that what's been happening I mean when when you look at the stock market and you're thinking how could this possibly be we're going everything bubble you think that's why because everybody else is seeing what's happening and going on and they're putting their money in our stock market yeah and and in our real estate market you know they're out there buying us and Canadian Farmland hand over fist in Miami Hondos and uh you know the one of the things that's making our housing market so um so difficult for so many people is that there are a lot of absentee owners out there where they you know they're not trying to live in that Miami condo they just want to park their money in that building so they buy a condo leave it empty on the assumption that you know it it'll be worth something at some point because it'll it'll have a dollar value and that's more than you can say for um a condo in San or someplace like that in China or in Brazil or in Russia and um that Capital coming in raises asset prices in the US it makes it look like we're booming and and we really are but but that's why it's not because we're such a healthy economy it's because the whole rest of the world is in even worse shape and they're sending their money here you know and so far Martin Armstrong has been right about this and I I gotta say I I would have more money today if I'd listen to the guy because I I want to read a couple of these things huh everybody are you prepared for this I mean this is crazy stuff man I mean it's politics the volunteer military is collapsing so they are going to offer citizenship to illegal immigrants in return for enlisting if that doesn't work they'll just draft them they'll also start letting noncitizens vote to flip red States blue in 20 24 sounds familiar doesn't it that's that stuff is happening or it's on the verge of happening as we speak you know also says our computer says we'll be lucky to have an election in 2024 and there's no chance it will be legitimate Biden is just a placeholder the neocons are in charge now this is their Christmas Day Parade they they're finally at the point where they think they can break Russia and Conquer it yeah uh and clearly that's been our objective with Ukraine and everything you know we we've expanded NATO right up to Russia's border um after promising not to do that you know and then in um I want to say 1991 it's right around there we put in writing a promise that if Russia allowed the the two parts of Germany to unite that NATO would not expand one foot beyond that piece of land and immediately we started bringing in countries that were between Germany and Russia into NATO which is that's an anti-russia military um Alliance and so we've moved ukra or we've moved NATO right up to Russia's border and Ukraine is the last straw Putin has been saying all along listen you know we have a military base here this is this is the corridor through through which many invasions have happened in the past and Russia you get past Ukraine it's just flat ground all the way to Moscow so a tank army or horseback Army in the past um was able to basically sweep across Russia and almost conquer it over and over again so they need defensible borders and they've said this that's a red line so the US basically invited um Ukraine into NATO Russia in invaded Ukraine and we have the war that we have today but you can make the case that that's what the US wanted all along they pushed Russ Russia into a fight that the US thinks they can win and in that way take over Russia and then they get the the biggest Trove of natural resources that exists on Earth so it's a prize it's understandable that the uh the crazy people running our country would like to gain Russia's natural resources but it'll come at the cost of a nuclear war and they don't seem to care about that that's what's so weird about this you know it's not like they're going to survive and their their kids are going to survive a global nuclear war either although maybe they think they will they've got these bunkers and these um uh these compounds in New Zealand it could be that they just plan on taking us right to the edge of war and then disappearing going into their underground bunkers and then letting things work out and then reemerging to repopulate the world sounds like Dr Strange love that that movie that was way ahead of its time um but yeah I can't explain this from a psychological standpoint because it doesn't seem like the actions of sane people but it it is explainable their actions are explainable with that strategy in mind so it does seem like that's why they're doing what they're doing you know other than propaganda and maybe this is propaganda I have no idea but I've heard that Russia's all but one the Ukraine war oh totally yeah they kill like what a half a million men or something like that and I mean I don't know that that I it's just what I hear I mean but I hear that they're like on the they could take them over literally at any time at this point here's what's so creepy about this you got these monsters like Lindsey Graham and and any number of other people who are in charge of the government right now and they say things like this is a great deal for us because all we're doing is sending you know 1 eth of the military budget over to Ukraine but were we um using up half of Russia's military to fight this war this is money well spent but they don't include in their equation the half a million dead ukrainians right so that's just a proxy Army those guys are just Cen Canon fodder and they they mean nothing to the guys in charge of the US military industrial complex and that's terrifying because um you know to the extent that they don't care about the ukrainians as they try to engineer a nuclear war they basically don't care about our kids and grandkids either because they're the ones who will either be drafted into the next War who who will die in it one way or another and uh it's horrifying and anyhow Martin Armstrong gets that exactly right he he's been right about this for a long time he also says a real rate of inflation is 26% the CPI has been revised countless times they replaced home prices with rent then put in controlled rents for from New York City yeah here here's how INF inflation statistics have evolved over the past few decades back in the 1980s we we um created a basically a basket of goods that people use in their day-to-day lives and we monitored the price changes in that basket of goods and uh the numbers were kind of unacceptable so we we did what art Martin Armstrong said we took basically took housing out of the Consumer Price Index and that still wasn't good enough so we uh instituted something called hedonic adjustments where um if you buy a computer this year that costs a little more than the computer you bought five years ago but it's more powerful um what the government does is say say that the price of the computer actually went down because they monitor they they measure it in computing power and you know there's something to be said for that intellectually and intuitively but it's a black box so they can they can um make that adjustment any day way any way they want to and come out with any result that they want and then um another thing called substitution is where okay if the price of steak goes up they don't just report the price of steak and include that in the CPI what they do is they replace it with chicken or some other perceived to be lesser thing so that um yeah the the price of your life doesn't go up all that much but the quality of your life goes down so you add all that together and you get today's inflation numbers which are nowhere near as high as they would be if we were just using 1980s techniques um and uh there's there are a lot of different estimates of what it would be but a lot of them cluster around twice as high as today in other words today's 3.5% official inflation would be seven or 8% and that would be debilitating you know that that's a crisis level of inflation that would cause uh all kinds of financial collapses out there if we reported it that way but people who have to buy groceries kind of see it that way right the price of um the a static basket of groceries went up by about 30% in the last three years and that's why um that's why the the pollsters are so confused about why people are so frustrated with today's economy because you know the unemployment rate is low and inflation is only 3% but they they leave out that the actual cost of living is up by 30% and a lot of people um already in say 2019 were having trouble making ends meet you know putting gas in the car feeding the kids paying the rent that was already hard for them now the the cost of that went up by a third you got a lot of people out there who have to choose between paying the rent this month feeding their kids and putting gas in the car so they can get to work they can't do all of those things so now naturally those people are frustrated and that shows up in polling when people say you know we're going in the wrong direction it was better three years ago under Trump than it is now under Biden and and then somebody like Paul Krugman at the New York Times comes out and says well people are just ignorant they don't know how good they've got it but you know they know how how good they don't have it and uh and that's why it's um it's so frustrating right now but it's being hidden because our inflation numbers are being falsified basically yeah I think people are starting to wake up though and realize like you said that they just don't have any money and that they're financing everything I mean how does that food taste at five times the amount of its actual inflated cost when you put it on your credit card and you can't pay your monthly credit card bill and you're paying your minimum pay payment and you're taking your credit cards to the Max and that's what's happening I we're seeing a lot of it I talked to a lot of loan officers John and and they're telling me that they are seeing credit reports they've never I mean they this the debt is out of control the amount of credit card debt yeah you you basically nailed it there what people are doing who can't afford their day-to-day life is they're putting it on plastic so credit card debt is so in and a growing number of people are having to carry credit card balances month to month which means they're paying interest of 20 to 25% on their loans and that's a recipe for bankruptcy right you can't exist if you're paying 25% on your debts and your debts are going up every month so that's what's happening to a lot of people and there's a stat for that it's called personal interest expense and that in other words that's the um the amount of interest that regular people have to pay each month on the the various debts that they've taken on and that's going parabolic it's going straight up it was it was um $300 billion a year not very long ago now it's it's $600 billion a year and climbing straight up so it's not going to be long before it hits a trillion dollars a year of just interest that regular people have to pay and at that point Society collapses you know we it's not like we'll get to where a lot of these charts show us going because before we get there things will just blow up and and that personal interest expense stat is one of the key indicators of how much time we have left and I think it's not much well well give us some kind of an example when you say we don't have much time left I mean what are you talking about and look it was just announced Plan B of the student debt forgiveness uh you know where it's a little more narrow in parameter uh but certainly a lot of student debt to you know will probably be wiped away uh these are loans that I mean people took them out man come on you owe the debt you owe the debt we have a record amount of people living in houses that aren't paying their their mortgage that they agreed to pay I mean they sign a contract I I'd like to sign a contract for a house and then in a couple years have a third of the balance taken off and cast into the back of it when an interest free mortgage for 30 years hey why not that's a great idea um I get it we you know it's not nice to say to people n you're screwed up and you have to leave the house and figure out what you're going to do yet we have record levels of homelessness because we have no houses available um one of the reasons we have mental illness through the chart you know off the chart um but yet again we're we're saying hey well I get it because we have a you know we have a um we have people running the country that that there are no consequences for them I mean they can deficit spend all day long there's I mean you don't have to balance budgets anymore what what's that um we're just going to create these bailouts but when you say we don't have very long and we talk about things unraveling I mean what are you thinking I mean you think we're going to see something um at the next year or two or are you talking a decade from now what are your thoughts well there there there's no saying um that with predictions you should um name a thing or a time but not a thing and a time and uh I've learned that painfully in the past so so I I have no idea when this stuff is going to happen I actually thought that um around 2025 or no 2005 2006 was going to be the end basically when the housing bubble burst in 2008 let's say that we wouldn't be able to recover from that and we did you know we took on another 20 or so trillion dollars of debt in the US and we bought ourselves another decade but at the cost of being even more deeply in debt so that we bailed out Bad actors everybody were were you around in the business then Todd do you remember them bailing out Fanny May and Freddy Mack and yes these guys who should have been allowed to go bankrupt yes yes I remember AIG I mean we're talking about people that were taking vacations man they were taking bonuses they were celebrating I mean when it's it blows me away you know one of the things Steve hanky and I were talking about earlier today was um you know he was talking about how uh Silicon Valley claims that they're the savior of all of this economy right this debt uh that uh that they're going to add you know 6% uh growth basically uh where traditionally we're 2% annual that they're going to 6% growth through AI uh because they're developing all these programs and I I said to them wait a minute time out Silicon Valley was bust they were broke when svb was going down that was silicon Valley's money they would have been see you later bankrupt now they're going to save the world but their money was in a bank that was failing that did fail the third largest bank failure in the history of US banking I I'm just amazed at the bailouts I've never seen such a thing where you could be so fiscally irresponsible and yet we paying for your and then and then you know the fed and the treasury Department says that we're not penalized it's not tax dollars money taxpayers money that goes to these bailouts um th this is okay these guys are the smartest people in the world on Silicon Valley right um look listen to what they did they um well in US Banks there's a quarter million dollar worth of insurance for depositors beyond that you're not covered but these guys until Valley picked this bank that had you know they had friends working there and they were right there on on site and everything and so they put all their money they put their payroll into this Bank in deposits and there were there were um hundreds of millions of dollars in some cases of company money in there that was completely uninsured and apparently the guys putting the money in this Bank didn't know that didn't understand it and apparently the guys taking those deposits didn't inform customers that they were becoming unsecured creditors of the bank like giving them all that money and then the thing blew up and the US government immediately stepped in bailed everybody out because they they couldn't have Silicon Valley companies going bankrupt because their payroll money evaporated um and then here's where it gets really creepy um they sent Janet Yellen the treasury secretary um to Congress to testify about this and they the a congressman said so is everybody now insured you know are all the banks protected by this guarantee that you gave Silicon Valley Bank and Janet Yellen said no we're going to take it on a case-by casee basis which means theoretically any small Bank could go bus tomorrow and the government wouldn't bail out the um the the extra creditors that they have the guys who had left a lot of money in those Banks and and so it left the door open to all kinds of other Banks failing so it almost blew up the um the local and Regional Bank sector right there in that uh in that one conversation and that's a signal that Janet Yellen and the other people at the treasury Department apparently don't know how banking works because you if you guarantee One bank but you don't guarantee the other Banks then everybody takes their money out of the other Banks because they're not guaranteed you know and so they they virtually destroyed the banking system just by by not understanding what it was they were doing by bailing out some banks but not others you know and that's a scary sign that the people in charge I have a a series in in my substack called morons we should know you know Martin Armstrong is in the category of people we should know Janet Yellen got highlighted in morons we should know you but you know what you it's funny in one one aspect you know the it's like you think are they really stupid or are they just you know um are they controlled I you know I mean look at it look at it this way JP Morgan Chase had no problem with what they said right I mean they look they got billions of dollars overnight right of the money Bank of America was fed you know basically as they're taking all their money out of regional Banks they're putting them in Bank of America they're putting them in well their money in Wells Fargo so I hear you man I don't I don't know but it's like you can't make sense of it yeah um okay two two really important things there and uh hopefully I can remember both when I started talking about the first one but the first one is is that um I'll make a prediction that the commercial real estate market is so overleveraged and is in so much trouble that there's going to be a bust in Office Buildings and maybe apartment complexes things like that that's going to impact those local and Regional banks that got into trouble already because th those guys own a lot of commercial real estate paper and when that paper goes bad the banks will go robust and so the federal government is going to have to step in and bail those guys out at some point on a mass scale you know several trillion dollars bailout of the local and Regional Banks and part of that deal is going to be that JP Morgan Chase and Goldman Sachs and Bank of America are going to step in and buy those assets for pennies on the dollar and make trillions of dollars of profits from it they because they'll be the government's partner in the bailout of the little Bank and so we're going to end up with I mean there are predictions that we're going to end up with six PS consolidation yes consolidation they're going to destroy the the little guys so the big guys could get can get even bigger which is no surprise because the big guys own the government via the fed you know the the big Banks own the Federal Reserve hey and they also okay I just thought of something I don't want to interrupt you though but I was thinking this is a great plan let's get a whole lot of salespeople out there to go grab all of the assets that they can and lend money on them and then we'll just take them over so we'll just have other people work for free for us I mean if you look at if you look at the us we have like 4,500 Banks if you look at Russia which is much bigger they have 450 Banks right so why do we have 4500 Banks I mean maybe I'm off by 100 or two why do we have that well maybe just what you said may be the great plan of let's just have them go out and all these Banks start up go get all these assets lend money on them and then when we when they collapse because the people can't refinance them or they're not worth it then like you said we'll just come in and take them yeah I I hope that didn't interrupt your number two no no because it actually T it ties in to my second point because pre previously you mentioned you know that this must be a plan this they can't be this stupid and you kind of just spelled out what the plan is but it's it's on a much vaster scale than that they're basically um the guys in charge of the monetary printing presses are slowly destroying their currencies by creating asset bubbles with newly created currency those bubbles are blowing up and they're creating crisis and at the same time they're they're pitting regular people against each other with you know pro-abortion anti-abortion trans rights anti that whole thing where if The Peasants understood what was happening and that we're we being led to a gigantic crisis at which um the guys in charge can declare martial law and take away all our constitutional rights and our assets and then turn us into basically surfs for a handful of incredibly Rich powerful people you know that's coming that's what this plan is and if we understood that it's the aristocracy versus the working class in other words um white and black working people and um straight and gay working people you know the people who are pitted against each other now if we all saw that it's in our interest to recognize ourselves as being part of one class that's the Ultimate Nightmare for the aristocracy that's in charge right now because there's 99 of us for every one of them and we could take over so the key to their plan is to get us all deeply in debt so that we're at their mercy and to keep us um divided and pitted against each other which with these silly social divisions that people spend all their time worrying about right now uh and while we're not looking they they fleece us bankrupt us declare martial law and they're in charge and that's okay I'm kind of wearing my timf foil hat here but I think that's the only explanation for what's happening right now because they cannot be that stupid you know they have to be Evil Geniuses because nobody can be as dumb as the people running California and the treasury Department and the Federal Reserve and and the banking sector um they have to be doing this for a reason and I think that's probably some version of that is probably the reason you had said about the commercial real estate crashing and you mentioned multifam the sector you know uh being part of that and there will be a lot of people that will lose a lot of money in this multif family bust and the ones are I mean I watched it happen when I saw these operators syndicating deals and raising money from people like you and me you know ordinary investors promising I mean not promising but they promising I mean you know there there is no guarantee in invest ing obviously but emphasizing that the investors are getting double digigit Returns on their investment and their idea was to buy these B and C assets that you know were already at very low capitalization rates meaning that they weren't delivering a lot of money they weren't delivering the returns that they were hoping to give the promise the investors and this was working for a little while but their their plan was to go into these apartments buy these apartment buildings up and then enhance them make them nicer add amenities which cost a lot of money to do at very high inflation rates because building materials have been at a premium labor rates have been at a premium at the same time that millions of Millennials are moving back home with Mom and Dad because they couldn't afford the rent so they were buying these assets with very little profit that the current the sellers the seller operators were making very little but they were promising look give us your money we're going to buy these assets and make it raise rents and now we have all of these new units coming on the market by the tun like a million units in the next year of multif family buildings brand new units that already have these rich amenities with a lot deeper pockets in many cases to where they can give 15-month leases for 12 month rates and people that can afford $2,500 a month for an apartment and depending on where you are that may be low it may be 7,000 a month if you're New York City but my point is if you have the choice to move into this old outdated apartment or this brand new apartment complex you're going to go for the new apartments so these operators are in really bad shape a lot of these they refinance them they bought them they used the Investor's money they stuck that in their pockets they refinanced the property to the hilt and then use that money to start another deal and now these loans are coming due and these operators are having like Capital calls with the people that have already given them all their money saying we need more money or we're going to give these apartment buildings up for 30 cents on the dollar and that's what's happening and we're going to see a lot more of that at the same time that on white house.gov you could see the B Biden administration's plan to try and incentivize businesses to gobble up or take it pennies probably on the dollar these Office Buildings and convert them into Apartments I have no idea how we're doing all this here Joe's pulled it up here the fact sheet talks about how they're planning on doing it this is a day late and a dollar short in my opinion I mean which always seems to be the case I'm not picking on this Administration I'm just saying by the time I mean the government looks at such backward-looking data they probably didn't realize that there was already going to be a gut glut on multif family housing they probably were looking at the same thing that J Pal's looking at in company when when they're like you know going off of this trying to run our country on backward-looking data lagging data lagging effects things like that but we're going to get this is going to this is really going to be bad this is going to be really nasty this this Commercial Banking you know uh real estate crisis which is going to overflow into these Regional Banks I don't know how are I guess they're just going to bail them out like the Student Loan program well what will probably happen is that a lot of these Office Buildings will change hands at a big loss and that loss has to be reported by the people who are on the hook for it and a lot of local and Regional banks will be on the hook so they're going to have to report those losses which will spook their creditors or I'm sorry their depositors which will force them to sell more assets at bigger losses to pay off the depositors that are leaving um until the bank just collapses and then you know spread that across the whole economy because there's office building paper in every local and Regional Bank just about so 70% yeah so when it when it happens and it might be this year because a lot a lot of buildings are being sold at a loss now and if that spread then boom that's the story of the second half of 2024 I'm I'm not predicting that that that's when it happens yet but it could be it could be something that happen sooner rather than later here's what's happening though and this is I find this to be very interesting these Banks a lot of them aren't foreclosing on these assets what they're doing and I know this firsthand is what they're doing is they're saying you know your loan matures next month but we'll give you 120-day extension to figure it out so what they're they're what they're essentially doing is saying hey look send us in you know uh you know we're going to get some kind of an extension paperwork you know you're still bound to make the payments but we're not going to accelerate this loan right now until we figure out how we're going to deal with it because in a lot of cases John the money doesn't work anymore I mean if you if you had to underwrite that building the same way that you did your underwriting five years ago their vacancy rates are killing them because they don't have the income and the building isn't worth what it was 5 years ago in the eyes of the banks they're saying man we're really out there if we owe if you owe us $40 million on this building $25 million on this building we may only be comfortable refinancing for 60% of that and we want the rest in cash and these operators don't have it so that's where you know we're it that's coming when I can drive down we're we're close to York Road it's a a major road it's called York Road closer office here and I can tell you I was doing this um well I'm doing it everywhere I go now I mean I'm all over the place with uh seeing clients but I'm now starting to really take inventory of vacancy oh man it's bad I mean bad it's in in the um in the the shopping center uh Center uh industry there is a term called going dark and that's essentially what it is your lights are going out you know you get this business is out this business is out this business is out next thing you know they're falling like dominoes and that's really not good for the remaining businesses that are in there because you're relying on when you look at a convenience center or strip center and you have different stores you're relying on one tenant to bring business to multiple tenants right you're trying to assemble a group of stores that complement each other that somebody pulls into the park lot and they can go from here to here to here you know and spread their money well when you start to take that away that really decays the the remaining stores so we're seeing that I mean it's it's really bad really bad we're seeing brand new strip centers empty Le signs for over a year well well so many of the um the anchor stores are going out of business for the malls right JC Penney and Macy's and Sears and you take those guys out of the equation for a mall and it's almost dying right there because half the people um who went to the mall went to that store so yeah we'll have to figure figure out other uses for malls because e e-commerce is making them um obsolete in their original purpose so maybe you know illegal immigrant housing or something like that or um bulldozzer car showrooms you know that that could be like the auto Super Center a mall where you've got different dealers there in the same building I don't know and you know it's possible that there there's there ends up being nothing you can do with all these malls and they are just bulldozed like you said so these car dealers have all the money I don't man I tell you what I have never seen uh operators in business tear their buildings down and rebuild them every so many I mean they they depreciate these buildings and then they just Ren them so it amazes me I don't know man you know what I think we're we're going to see The Comeback of the used car that's an inflation thing because cars got so expensive that Millennials and and Zoomers gen zers can't afford a new car now so so you got to go for with something that's like eight years old and that's the best you can do if you're a 30y old making 40,000 a year you aren't going to buy a new car guys if you're just logging on John Rabino he's our guest here tonight he has a substack it's in the show notes um his information strongly suggest that you subscribe to his substack um he's great if you haven't already realized that uh but anyway Melissa the silence over here is really you're really chatty tonight man lots to say lots to say lots to say it's that Red Bull oh I know I know I'm I'm well aware of the Red Bull but I'd like to address I wonder why I can't sleep at night yeah I'm up late at night yeah um can we look at the poll Joe do you mind pulling that up so the poll um we've got 964 votes please vote if you have not had an opportunity yet what concerns you the most war in the Middle East where's the pole he's bringing it up no I'm just going to recap while he's bringing it up we're in the Middle East is at 6% World War III 8% US economic depression 32% and all of the above is at 55% John what do you think about that man what what where is you the most well I've got two draft age Sons so this is super personal for me I'm terrified of them you know being incinerated in a nuclear war because some idiot wants to take over Russia's natural resources or something like that so that's that's my big issue and I you know I think it should be a big issue for for virtually everybody because it's it's more possible than we're being told that it is so you know pay attention to geopolitics it's uh this is one of those times when it deeply matters but all the other stuff is important too I mean assuming we avoid World War I then what happens in the US economy is going to be front page news and front burner for most people because it's going to affect our ability to live if if you're trying to raise kids in this world right now you deeply care about you being able to keep your job and get a a good raise going forward and to be able to afford day-to-day life and none of that is guaranteed in the uh the world that's coming so people that are worried about the economy absolutely should be worried because um you know debt works the same way for a country as it does for an individual or a family you know you borrow too much money and your life becomes chaotic that's what the whole world has done now so um it's going to be a mess from pretty much any angle that you analyze it going forward and all we can do as individuals is try to figure out how to arrange our lives so we're resilient so whatever this U this crazy economy throws at us um we've got the tools to deal with it you know roll with the punches and then come out of it stronger than we went in and that's the real intellectual challenge I think what do you think World War I would really look like well you know you know that saying we'll we'll fight World War II with nuclear weapons and we'll fight World War I with sticks and rocks and things so I I think it would be inconceivable World War II because part of it is because we're developing all this we these weapons that have never been used we've got um autonomous nuclear powerered submarines with nuclear missiles and they're being run by AIS right now control you know patrolling the ocean and we've got those you know those robot dogs in the science fiction movies now they're they're actually a real thing you can take these four-legged robots strap 50 caliber machine guns on them hook them up with an AI to control them and send them out and the AI picks the targets and the machine gun kills them you know and that that's oh and then Hypersonic missiles um we've got missiles that can reach a Target on another continent in 15 minutes so there's no way to defend against them you launch those things your target is destroyed and that's all there is to it and apparently China has the ability to drop nuclear weapons from space on different parts of the earth so there's no way to weather balloons yeah yeah but so there there's no way to look at that that kind of weaponry and say well here's how World War III will go because you can't know oh and then don't forget cyber War we could conceivably shut down the um the Gen the power grid of another country leave them freezing to death or starving to death in the winter and that's the war you know that it just happens because we flip a switch over here they starve in the next three months and that's all there is to it so where they flip a switch over there yeah and and and that happens to us here yes you know the the um em attack scenario which is in a lot of science fiction books a post-apocalyptic science fiction books where they um detonate a nuclear weapon in the atmosphere that fries all of our electronics and we're we're right back in 1850 but with 10 times as many people as can be supported with 1850 technology so yeah you know that's all possible so the the solution is don't get into that kind of a fight you know we just need to avoid this because there's no way to guarantee a good outcome for anybody in a situation like this yeah we have a super chat here who keeps funding all of this bad credit are they stupid do they have some gain is it nefarious well you know as we were talking about before it's that that's a big question because there's evidence for stupidity out there anytime you hear somebody from the FED talk or something like that it it's clear they don't really understand how monetary policy or the broader economy Works um but the mistakes that they're making are so continuously on the side of chaos whether it's you know the people running a lot of States here and making shoplifting illegal and camping on the the streets legal or the people running monetary policy where they create so much new currency that inflation spikes and that's debilitating for half of the economy and you know they they they knew that was going to happen when they created 30% more money and dumped it into the system so I I think I'm coming down now on the side of it's a plan it's a very scary plan to um to create a world of debt surfs people that owe so much money that they're dependent on the government for their survival and they have to do what they're told and at at that point you get the you know the world economic Forum great reset kind of thing where um our betters the aristocrats who actually have resources still after all the the chaos step in and they reconfigure the world in a way that favors them and that probably means you know a lot fewer people because they don't need six billion or seven billion people when most of the tech that supports their Lifestyles is run by AI so you know it's a very scary scenario and uh and one that um that I didn't start out believing but as the mistakes keep being made and pointing in the same direction I'm coming around to the idea that that that's what they would like to see we just have to figure out that that's the situation and then take the necessary steps so doesn't sound like people are doing that yet though it there aren't a lot of signs that they are doing it other than populist politicians gaining a lot of traction around the world um Argentina um Italy the US to an extent with Trump um in several other places uh people uh the voters have elected guys who sound like just ideological bomb throwers they want to tear the system out by the roots because you know the popul the populace populism um sales pitch politically is that um a handful of Rich criminals are um basically stealing from the rest of us and I as your new president will step in and I'll get back what is yours from the guys who are robbing you and there are variations on that sales pitch that are selling in different places Germany and France could com totally be ruled by parties with that kind of a philosophy pretty soon the us could easily be again you know we could um reelect Trump and he could have learned his lesson and he could put a bunch of populists in charge of the administrative State and they might tear it out by the roots who knows you know these things are conceivable and that would be the solution if we um if we just accept the idea that that there's a small group of people you can call them an aristocracy or an oligopoly or any number of other names but that those guys are are basically um um harvesting the rest of us and that we need to get together put our differences aside and set that big thing right so um sorry it's long-winded answer but I think that uh that's the best case scenario it's not a likely scenario but it's still possible at this point got another comment here distract divide and conquer there you go that's exactly it that's that's what we're um being subjected to right now and I got to say it's uh partially working so you know hopefully we we learn more as time goes on and we still have a chance to set things right when a critical mass of people figure this out have you ever been on the World economic forum's website they put the truth they they say the quiet part out loud there don't they you know they tell you exactly what they intend man I tell you what but the biggest shock for me were their supporters if you go to their supporter have you I mean you're talking about every corpor major corporation in America I mean it's there there is uh I mean they have them all listed there alphabetical order I mean down to companies like Adobe you know you name it I mean they they have so many partners and there you go Joe showing it to you right now so um yeah this is not a secret it it's it's like they're so sure of themselves that they're able to communicate with each other in person publicly and say what they intend to do you know and and uh that's terrifying but maybe they're over playing their hand because it it a handful of people heading for a critical mass of people might see this stuff and um come to the right conclusion which these guys cannot be trusted and we need to take their power away from them well you know you talk about uh globalization and you know us being one people uh you know the human race and we are all very interconnected I mean when you're calling various companies you're calling other countries that are you know representing uh companies and so I mean obviously I understand globalization and the benefits of it but there are also a lot of um problems with it and I I see the biggest problem that we have here in the US is we don't make anything I mean what what do we do I mean we don't make anything I mean we're trying to get these uh you know uh chip manufacturing facilities built here I mean it's taken forever to do that uh I mean it takes forever to build anything here in the us but we really don't make anything what do we make yeah um globalization was an idea based on the premise um uh something called comparative advantage which is an economic term for um organizing a system where everybody does the thing they're best at and so everything gets done by somebody who's really good at the thing they're doing um and so they spread Supply chains out all around the world they they moved things that used to be made in the US they moved their supply chains to 10 different countries um culminating in China making the thing finally and shipping it back to us and you know this is another one of those things where did did they just make a stupid mistake or was this part of a plan because the effect of globalization was to basically eliminate a big chunk of the middle class in the US because it used to be that you could work in a GM Assembly Plant in Dearborn Michigan and make middle class money uh and that all went away when we shipped all our factory work to China or to Mexico or to Vietnam or to Indonesia or any number of other places and those guys who used to be assembly line workers and other kinds of people who worked with their hands and made real things um they lost their livelihoods and they lost their lives because before they were um you know they could afford a house and they could afford for one the spouse to stay home and take care of the kids and so the kids got raised by an actual parent and uh there was always food on the table and the neighborhood was reasonably safe and the schools were reasonably good because of the money that flowed from that manufacturing job take all that away and we took a whole category of uh Americans basically um High School educated men and we told them they were no longer needed so all they could get was you know stocking shelves at Walmart or something like that and then they their kids didn't respect them anymore and their wives left them and um spread this across the country and that's what happened to that whole generation of people um and you know big part of Donald Trump's presidency is the fact that he spoke that language he went to those guys and said you know what um that the system screwed you over and I'm going to get it back for you and and so he basically owned the high school educated white male vote because of that um and you know the U the guys who used to be middle class you know by destroying that group of people's livelihoods we also made them controllable because now they have a crappy job they can barely afford they're dependent on the government so they're not the people they used to be and they're not the political force and they're not the ungovernable category of people that they used to be and that looks like it serves the plan that we talked about before right you take that whole category of people who would be kind of hard toh control in any event and you break them and so that's what globalization did um and over the past decade or so people have figured out that globalization is very bad for them and so we're we're rolling it back now the US is trying to bring back jobs from other countries and we're going to start making stuff here again and that's a really good thing ant anti-globalization so they they call it friend Shoring or reshoring in other words bringing stuff back to either your own country or countries of uh countries that you trust like in the US case we we're bringing things back here but we're also bringing back factories to Mexico that used to be in China um and that's incredibly healthy but it's also very inflationary you know there's going to be a lot of factory jobs going forward they're going to be unionized they're going to pay well um but that kind of wage inflation is going to push the price of a lot of things up so it's not going to be an easy transition but it's a very good transition for for the things we're talking about for um you know for the the middle class to start expanding again and to want stability and not want to be controlled that's that's a good thing that's probably bad news for the world economic forum and the other globalists um but to the extent that it continues then you know it gives us a chance of coming out of this in good shape and uh not being debt slaves across the board well maybe we'll have products that we could actually buy once and have it for 20 or 25 years instead of buying a product and throwing it in a garbage can in a month and a half well it you know okay kind of uh something that's T tangential from what we're talking about is um the idea that we should become more competent for several Generations now we basically you know we've been come we've become college educated knowledge workers who really don't know how to fix anything physical so we we buy a cell pH La yeah we toss that cell phone away and get a new you know and um what we should really be doing going forward is becoming competent again learning how to make things there was a um um a South Park episode where one of the uh the storylines was that okay South Park was basically populated by college educ educated people who couldn't fix anything so they had to hire their handymen but there was more work than the handyman could cover so the handyman started Rising raising their prices and they became the elites of that Society because the college educated guys desperately needed them to their lives um working you know and I think that's in part kind of the world that is headed our way where um people who work with physical things the plumbers the electricians the handymen um actually have good paying jobs and the knowledge workers are all replaced by AI so there's going to be this this big flip in um social um position you know going forward where if you're competent you're actually somebody who's valued by Society instead of looked down on and I like that idea it's going to I tell you what though that's going to be a slow process because what I see I mean look when I was in high school I took drafting I took metal shop I took wood shop you know I mean we we actually taught kids how to make things how to build things and you know now and I I hate to say it but I mean even the ones that are working construction it's amazing I mean that's why we're one of the reasons why we're paying so much for things you know I was on a job um a couple days ago and um there were electricians working on this job and they had to dig a ditch man I got to tell you it was actually it was comical in one aspect and it was completely disheartening in another because these three I'm going to say 20 something year olds in apprenticeship you know to to Journeymen whatever to get you know uh you become electricians man it was painful watching them dig I mean it was you know they didn't know how to dig and you know and I was talking with the one and all he kept saying was he was a low man on the totem pole and he he can't wait until he all he all he can do is electrical work I'm like man sometimes you have to dig a ditch I mean come on but I mean trying to get our kids to dig ditches now is not going to be an easy thing to do in uh you know in light of like Instagram and Tick Tock and you know all these things that are uh robbing their attention and they don't want to dig ditches yeah PD that that's an actually really a hopeful story that you just told because that kid it sounds like is motivated to become an electrician and that's a really good thing I mean okay we'll find people to dig the ditches if we just have enough electricians later that's it that's it because you know a lot of his peers are motivated to be game designers or YouTube personalities or something like that your Tik Tok YouTube personalities sorry no well no you see I dug my ditches man come on I spent years digging ditches you you are major YouTube personality there a difference I earned this YouTube right man you know yeah I didn't want to become an electrician I want to become a YouTuber well but see I I think if you ask a lot of kids right now they would probably put being a Tik Tok influencer at the top of their um their aspirational ladder and so those are the kids who have to go back and become electricians at some point for us to have a healthy society and you're right that's not going to be an easy transition at all is it yeah not really I do have some um more Super chats here these corporate jobs reverse to engineer the quiet quitting basically telling folks you don't come back you basically fired with no benefits um there there's a lot of interesting Workforce stuff going on out there and uh yeah there there is quiet quiet crit quitting and then quiet firing and and lots of things like that and part of that comes from everybody being overconfident because if you're quiet quitting for instance that means you're pretty sure you're going to keep that job right and you're pretty sure you can get a new one if you lose that job or else you wouldn't be messing around with your boss like that and if you quiet fire people that means you're you're very secure in the workforce that you've got and I think over the next few years um people are going to lose that security and we're going to see and this is going to be one of the upsides of hard times is companies starting to appreciate their workers again and workers starting to appreciate a good job again and you know back in the 1950s um which is kind of what we're headed back to if we're really really lucky that kind of a societal attitude where where we know that bad times are possible so we take what we have seriously and we protect it so I I think that a lot of the trouble that we have now and a lot of the really societal dysfunction that we have now will be cured by all of a sudden people not knowing where their next meal is coming from or or when they're ever going to work again or when when they're ever going to be able to fully staff up you know stuff like that is going to be possible in the future and it's GNA be horrible but it's going to have a um a good side effect which is that people is gonna people are going to get a lot more realistic and a lot more appreciative of the things that they have and they're going to be a lot more ambitious across the board because of that because they don't just want what they have anymore they want to keep it and improve it instead of just blow it off as soon as they're uncomfortable John a little off topic but what do you think is going to happen to a lot of the uh I mean people that are relying on social security and Medicare and um you know their pensions and things like that what do you what do you think is going to happen with uh generation xers or you know uh the Baby Boomers that are still that are living longer um I I think a lot of people who think they have things will find out they don't have them like pensions are just going to be a brutal story because um especially for instance public sector pensions in a lot of older cities there are are um tens of thousands of teachers and firefighters and cops who uh you know did their job did it well um played by the rules worked hard and then they got these really nice public sector pensions but the governments of those states and cities didn't fund those pensions fully so there isn't enough money there now to cover their obligations and that's with stocks and bonds being pretty well valued you know they their portfolio of investment assets are okay right now but in the equities and um bond market um crashes that are probably going to come when when uh things really get bad those Pension funds are going to go from underfunded to catastrophically underfunded and people are going to just not get what they were promised and so that's going to be a big story going forward because it's going to be um horrifying for a lot of these guys who thought they were going to get you know $2500 a month for Life plus health care and and it turns out they're going to get um $1,200 a month plus no healthare or something like that which is the way these Pension funds are going to go so that's that's going to be a big story and it's going to be a source of incredible unrest when it happens because these public sector unions are really powerful and they're not going to let this happen without a big fight so our cities are going to be inflamed by uh the pension issue at some point in the future yeah I'm afraid you're right about that would you have some more um this one here from from Charles Charles thank you so much for your Super Chat Christina smallhorn you should have her on housing YouTuber has a theory that BL she did I know she did I know she did she turn me down but she has a theory that black rock may be using squatters to pick up homes for cheap she's a better dancer than me she always dances on her shows I would love to have Christina on but she she declined well maybe will rethink that she's not allowed on now I mean you know if you turn us down I mean well I've asked like twice okay not begging no we don't beg here that's that's not going on um then we have another comment here it's crazy American Patriots haven't reputated this tyrannical nonsense they are dividing us with social justice victim narratives yeah that's that seems to be the strategy and it is it is really working because I think if you look at what people spend most of their time um arguing about it's the um these issues that don't really matter to how much you have to eat the next day or um whether you're free to exercise your constitutional rights we don't walk around thinking about that stuff we walk around thinking about uh you know what the the last video that we saw where where people were arguing with each other with each other over over some social issue and who's right and who's wrong about that and that's exactly the way the guys in charge want it so hopefully um shows like this um wake enough people up that it really starts to change and it is really starting to change you're seeing it in politics so watch how the um the populist political candidates do and that'll be a good gauge of how many people are starting to wake up and see what the real strategy of the aristocracy is do have some more questions here um bear with me one moment just need to scroll up here so the question is with crude dollar and decoupling the dollar from gold how much of the 70s economic nightmare was based on those two um a part of it was uh because basically what we did was we we took gold off of the um the gold or we took the dollar off the gold standard in 1971 but we did that because we were trying to fund simultaneously the the Vietnam War and the Advent of the Great Society social programs so put those two things together and it was incredibly expensive we were having to borrow more money and create more currency and that spooked the dollar holders in the world and they started um demanding gold for their dollars and that's what caused us to go off the gold standard um and the expense of the Great Society programs and the Vietnam war led to the inflation of the 1970s and that was just a really tumultuous decade and it was our um only real currency crisis that we had where we were actually worried about the dollar dying you know because inflation was spiking and and there was turmoil around the world and prices were going so it was one of those times when we lost our self-confidence and a big part of that loss of self-confidence was part part and parcel to the monetary system at the time so that's why the 1970s is a a really good template for what's coming it's much much worse now than it was back then but a lot of the mistakes we made back then are being made again just on a much bigger scale so a lot of what happened back then could be um what happens in our future only on a much bigger scale so it's a good learning experience to study the 1970s we also shipped 4 million manufacturing jobs offshore in the 1970s too MH well that's when H globalization began yeah and uh it it it really ramped up in the the 80s and 90s and and 2000s but but yeah because that that was back when um we made most of the cars in the world and then Japan came in with Dotson B210 and and little Nissans other otherwise and um Honda Civics and things like that which um didn't seem like a big deal at the time but ended up decimating the US car industry so yeah a lot of those jobs were shipped to Japan inadvertently we didn't realize it was happening we didn't understand the process but that's how it happened and that's how it began and then globalization was off and running you know it seemed like everything was stamped made in the USA back then I mean I know it wasn't not everything was made in the USA but it's so weird to see it now you'll see you know a Manufacturing Company a local manufacturing company and they'll be they'll advertise you know 100% made in the USA and it's like it's weird yeah from China well it's like we committed industrial suicide we uh we thought it wasn't important to actually make stuff and it turned out it was incredibly important to make stuff so yeah and now you're going to see maid in the USA um on more things because we're making more stuff and because it's um it's a selling point people understand that we hurt ourselves by shipping manufacturing to China and that we're helping ourselves by bringing it back so um you know I think there was a long stretch there when made in the USA say was actually a negative for something because you you would have thought oh I can get the Chinese made version cheaper or something like that and now you see it and think okay this is high quality because it's made right here by people I know and I I this is a good Trend you know there there are good Trends we're uh I'm I'm saying a lot of Gloom and doomy things but there there are positive Trends out there and the idea that we're bringing back manufacturing to the US is one of the really good trends that are happening another um question here for you I want to get then into this is what a death spiral looks like this is John's look if you guys are just logging on John Rabino here uh we're talking about some of his work on his substack which is in the show notes you'll have to cruise on over and subscribe to his substack um I'll ask this question really quick is that good okay cool how does Wall Street roll in profits with inflation and interest rates Rising while people are spending less uh Wall Street doesn't so much care about what people spend they care about asset prices and they care about deals getting done so as long as stocks bonds and real estate are getting more valuable um Wall Street finds ways to make money from that now the reverse is true when uh you know when we have a massive equities bare Market or bond prices just collapse or something like that Wall Street stre loses a lot of money because they own a lot of those assets and their favorite customers own a lot of those assets so one of the U the nice things about a financial crisis is that it hits the guys who've been making money all along off of the backs of regular people and you see the the rich get much less rich and Wall Street um a lot of jobs on Wall Street go go away and the money that's being made by the guys who run Wall Street Street um goes way down you know so that's that's one of the upsides of the coming financial crisis but in the meantime they're still making lots of money you know they're they're rolling up the Housing Industry and they're looking around for other things they can buy up like doctor's offices and and uh Farmland they they're they're still making lots of money um by converting a lot of the necessities of life into tradable assets that they can speculate on and and make fortunes by manipulating markets so um Wall Street is still there it's still making tons of money it's still basically running the show in Washington but in the next big crisis um it it will suffer disproportionately because the crisis will be in assets that they own so they'll lose a ton of money Joe let's pull up uh this Fred chart on government interest expense and this was in one of your uh uh writeups John referring to this is what a death spiral looks like and uh you're you begin referring to the US government's Rising interest expense and I just would like for you to explain to our audience what is going on in this chart okay government interest expense here let me me see it okay there we go okay um basically the government's been borrowing money year after year since the the 1980s really is when it got going under under Ronald Reagan we ran big deficits and we found out that there was no political cost to running deficits so the government's been borrowing money ever since so who have they been borrowing from well they they um basically create treasury bonds and they hand those treasury bonds to Banks and then the banks hand those treasury bonds to their big customers so for instance bond funds will buy treasury bonds or um foreign central banks that want dollar denominated assets as their Reserve assets will buy treasury bonds and then just Rich guys you know they they put part of their money in super safe government bonds so there's always a demand for US Government paper out there because there's always a demand for dollars um but in the 1980s and 1990s we ended up with a lot of extra debt and then in the 2000s um it looked like that debt was going to cost us a lot of money because we got to pay interest on it right so part of the um the financial strategy of the US government was to respond to every um crisis then and in the future with easier money they would push interest rates down to a lower level and that helps bail out the big banks that are in trouble but it also makes the government's interest costs lower so governments could borrow money um without having to pay a lot of interest which means that their budget was closer to being inbalance and so they did that for going on 20 years they just pushed interest rates down and then there was a crisis and they pushed interest rates down even further until we got down to pretty much zero so that for the US interest rates were low enough that the government could borrow money and not really see its interest costs go up and in Japan they pushed interest rates down into negative territory so get get this the government could borrow money and its deficit went down because the bonds that the government was issuing actually paid the government instead of the other way around you know the bond had a negative point5 interest rate um and so the government would get um positive Cash Flow by issuing more bonds now that um worked beautifully for about 10 or 15 years uh until inflation started to hit you know all the debt that the governments of the world were taking on and all the currency they were creating uh that went along with the debt caused inflation to spike and that was 2022 that's when inflation went up to almost double digit levels in the US and then we had to respond to that with higher interest rates so what we found then was that okay we've taken on all this debt over the last 40 years didn't hurt us a bit but now that interest rates are going up it's suddenly starting to hurt us we're suddenly having to pay interest on that debt and the numbers are breathtaking like the US went from having interest on its debt of around three or 400 billion dollar a year to a trillion dollars a year in no time flat the chart as you can see went almost straight up and this year the us is going to issue1 trillion worth of government paper of its rollover of existing debt some of its new debt and it has to pay interest on that now too so the U the interest cost of the US government will be like $1.6 trillion dollar a year in 2025 and there's no end in sight so we're looking at a you know potential government bankruptcy unless we fix this but they have no idea how to fix it I mean looking at this chart I mean this is crazy you can see I mean like you said this line goes straight up it's higher than they've been track ever uh since they've been tracking It Dating back before the 1950s into the 1940s I just I kind of Wonder like where does it go from here well that's the question because it it doesn't go anywhere good because there's nowhere for that chart to go that's good because for instance um the government could lower its interest costs by um pushing interest rates back down into negative territory and then its interest costs would go down because its new debt would be um actually paying the government but that would cause massive inflation so you'd see you know 2022 on steroids maybe inflation would go up 10% or 15 or 20% and then everything would go crazy because um nobody wants to lend money if they're going to be paid back in currency that's depreciating at an accelerating rate so the bond markets will totally flake out if inflation spikes again so the government can't do that because they'll crash the U the financial markets but if they keep on having to pay more and more interest they're they're in a death spiral where their interest costs go up and that money has to be borrowed and then they have to pay interest on that new borrowing and so on into Infinity basically so you get a death spiral and either way the system breaks down and those are our only two choices we have have no other choices right now until we do a currency reset so the the big crisis that's coming the next stage of the process after that is some kind of a Currency Reset where we go to a new kind of monetary system and we just screw over everybody who trusted the government their their old dollars become way less valuable and we Institute some kind of a new currency might be a gold standard that that would be the most logical thing to do is just announce that henceforth the dollar is just a name for one 10,000th of an ounce of gold and then going forward gold is exchangeable at the at US government offices with dollars you can you can go in and buy gold or you can go in and sell gold for dollars and that controls the money supply it links it to the supply of gold so going forward zero inflation nice smooth economy but to get there you have to um impoverish all the people who kept big dollar bank accounts and things because you got to Deval the dollar to get there and that's the next big hurdle how do you do that without causing a revolution and there history says there is no easy answer yeah well I I think U I think we're realizing that where do you think the bonds will the bond rates will go I mean if they if they they obviously need more money to pay the interest on their debt and I I've I've heard a lot of people say that pretty soon maybe by 2030 2050 that the uh the debt the interest to satisfy the the the debt uh will exceed what they collect in tax revenues but what they're obviously going to need to entice more investors into the bonds where where do you think the Bond Market will go well see the bonds depend for their value on the currency that they pay you an interest right so bonds will go in the same direction as the dollar if the dollar loses value then bonds are worthless so you'll see bonds go down and when bonds go down the interest rate on those bonds goes up it's a reciprocal relationship so interest rates will Spike um in a way that's out of the control of the government the government will try to force interest rates down but find out it can't do it and so you get something that's like the what I was talking about in the 1970s the dollar fell in value inflation went up and interest rates went way up and that's that's one scenario for what we might see this time around because and we've got historical precedent for that it it already happened once um and we're making those same mistakes so maybe the same problems will happen happen again but every you know the old saying that um each crisis or know history doesn't repeat it Rhymes so it might be similar but it won't be identical and um you know there are lots of other problems or lots of other ways this could go and some of them could include geopolitical crisis where we we were in World War II and then what happens to the financial system and who knows you know and um or we have that gigantic Cyber attack or something like that we don't even know where it comes from what does that do to the bond market these are unknowable things but you counter them you counter that risk by getting out of the bond market you know just don't own things like that um so personally you can protect yourself by owning gold and silver and farmland and really good rental houses things like that that governments can't inflate away and that protects you but the guys who just own bank stocks and bonds and bank accounts are the ones who will really be hurt by a monetary reset you talk about uh how a country goes bankrupt do you I mean do you think that's really possible that the US could go bankrupt well see the US is kind of a special case because everybody wants dollars there's so much dollar denominated debt out there that everybody has to get dollars which means dollars kind of hold up relative to other currencies on the international exchanges and that prevents us from just spiraling down to zero like other countries do because you know Google um lists of hyperinflations and you'll you'll find a whole page of countries whose names you recognize who had hyperinflations where they they screwed up their currency the currency went to zero and then they had to do a reset and that's basically National bankruptcy when that happens so yeah it's completely possible that a country can go bankrupt by um creating too much currency and having everybody lose faith in the value of that currency now that's that's more of a uh that's a Japan thing you know Japan could do that and Europe could do that um you the US would be the last to do that just because there's so many people out there with dollar denominated debt where they got to get dollars in order to pay the debt but um you know once this starts going I don't know if we can differentiate between which country goes first and and second and which Domino knocks down which other Domino because it'll be Tak too chaotic for that too many decisions will be made Under Pressure that change the course of this you know reading your uh your paper here um on your substack you have the 10 steps and you're referring to Japan but it definitely I mean it's the same what we're experiencing here Step One is build up massive debt step two is lower interest rates to minimize interest expense right so we've been there we've lowered the interest rate to just about zero step three continue to borrow at virtually no cost you have step four experience sudden sharp inflation experience a plunging currency step five step six reluctantly allow interest rates to rise step seven get swamped by interest expense which is what we're seeing that sharp line right step eight desperately tried to lower rates right it be too late at that point step nine basically watch it implode and step 10 is game over I I I mean it's amazing I mean you see because other countries are making or have made the the same mistakes yeah that all sounds very familiar doesn't it and Japan is a little further ahead of us now because they're at the point where their currency is tanking the um it's now like 155 Yen to the dollar and not so long ago it was a 100 so they've lost like 50% of their value versus the dollar now and they don't know how to stop that decline in Japan because normally to stop a decline in currency you raise interest rates to make Bonds denominated in your currency more attractive but if Japan does that then their interest cost spikes out of control and that bankrupts them so that's where they are right now their currency is tanking they cannot raise interest rates to fix it and so that's it you know they uh their their currency is in very real danger now of just ceasing to function as a currency so and Japan's the third biggest economy in the world it's not some little Banana Republic it's it's a major entity in the Global Financial system so this is a very big deal and that's a a stat to watch you know look at the um the yen versus the dollar and watch where it goes from now on some final questions here as we wind up tonight sure do another Super Chat US Government allows Market theft and manipulation exceptions to rules look up failures to delivers and re hypothecation of shares little transparency yes that's part of the scam that's being run is that all kinds of things are being borrowed against more than once in other words rehypothecation means use something for collateral for one loan and use it for another loan and uh and so you end up with when some of those loans start going bad you find out they're not actually collateralized after all and then the system breaks down so that is one way this could go and that you know that could be kind of what we've got going with commercial real estate where a lot more people think they have a stake in this thing than they do you know I got to say something very interesting here because as we've been talking you know and it's amazing you know you you you hear about and I know a couple of our videos we've we've been suppressed uh we did a uh video about the power grid going down and that was suppressed but it's amazing to watch here tonight where we had 2,000 viewers at one time and now we're showing like 64 and there is a there's something because on YouTu something either is going on with YouTube right now or we're being majorly suppressed because of our content it's one of the time which could be it's very interesting it is I know I notied the same thing no I mean we've never I mean look we it's you go from 2,000 viewers to 70 viewers that's something's going on mhm and you know I I'm sorry if I screwed things up for you no man look a lot the kind of thing but this is what gets censored a lot of what we're talking about exactly exactly which is which is really interesting because you know we founded the the United States was founded to get away from the Kings right the rulers we we were founded so that we would have you know freedom of speech right and um so it's we now with uh all of the the overreach U you know it's something because the the transparency we don't have transparency I mean things are censored and which isn't right I mean we we should be entitled why wouldn't they tell us what's going on why wouldn't they give people freedom of speech without censorship uh but they they they don't and you know so it's up to you guys that are watching the video to actually share this video and get it out to more people because that's the only way that we can make it happen a lot of times right if we want to talk about just you know how everything is great um you know and and cruising right along and our economy is great and the job market numbers are right and the unemployment reporting is accurate and everything is just fine and dandy and you guys really have more money than you really think that you do in your bank account even though it says almost negative and you don't have enough to pay your bills or you have to pick and choose what bill that you actually pay this month do I feed my family uh or put fuel in my car so I can get back and forth to work or you know do I um do I decide to do uh you know pay my credit card bill so it is amazing but guys this just this really just kind of fuels me to say share this video get it out there um get you know I mean what John is talking about I mean where else do you go to hear these kind of things right you're not getting this from even Fox I hate to say it I mean it's anyway what are you laugh so I just refreshed the YouTube page and now it only says 49 are watching 49 are watching right it is amazing we've never had this before in three years we've never seen 45 viewers watching at a time um so it's amazing so um anyway you see this Rabino is a good egg we can just go go go through this truth is strength um yeah uh my what did that say my my connection to your live stream keeps getting shut down oh man there's the problem yeah this is great this is great that's what they're doing they're just stopping us John they're just shutting it down yeah oh well we really didn't talk much about censorship here but that is a big part of the plan is to make sure people don't hear um the uh the the whole oh it's a class thing not a race thing or a gender thing and um I I obviously YouTube is part of that process so you know you guys ought to consider um a presence on Rumble so far so good that that seems to be uncensored yeah actually uh would it say oh I could not open a link I signed off clean went to go yeah I mean look I know uh we've been talking about it and um in fact I mean we I think uh that that's probably a good that's a good option but uh anyway John man we love you brother we thank you so much for coming on and and uh sharing uh what you know uh John's information is in the show notes visit his substack subscribe to him he doesn't just you know it's not just Spam he's not spamming you I get these uh emails with his uh his new work and um yeah we'd love to have him on we're getting ready to record a show with him um later on this week that will probably air next Saturday so please stay tuned if you haven't subscribed to our YouTube channel if you're one of the 74 that are watching right now uh please you probably already subscribed but uh again share us with your friends it's it's it's interesting to see this uh censorship taking place as we are rolling out this video but John thanks so much man for joining us oh thanks I really enjoyed it once again you guys are an excellent interviewers I appreciate it well thank you and guys we Melissa yeah thank you John very grateful and um we'll have you back anytime even if the numbers are five people we're we're going to have you back they'll find us they'll find us they'll find us share this video get it out there let's get these numbers up and uh you know John has great things to say here and they they certainly can't stop you from sharing so let's get it out there guys if you like this video you can let us know that you did by hitting that thumbs up and if you haven't subscribe to our Channel we always love when you take the time to do that hit the alert Bell you'll know when we upload content just like this we also have an amazing referral Network all around the country and probably a City close to you um our network is growing if you're looking to buy a house or sell a house or rent a house or uh you're a landlord and you want uh us to represent you for that too we can do it if you're in Maryland we're your we are your company but if you're anywhere outside of uh Maryland you can click on the map of the US and if you like our gear our cool gear we'll plug this show brought to you by sax realy dotshop you can buy one of these cool uh quarter Zips yeah that Melissa and I support every week just about yeah awesome almost every week almost every week anyway we love you guys we appreciate you and until next week see you soon see you soon [Music]

Channel: Sachs Realty

Views: 176,887

Keywords: recession 2024, us economy 2024, us economy news, us economy news today, us economy 2024 predictions, us economy crash, us economy collapse, us economy recession, us economy today, us economy explained, us recession news today, us recession coming, us recession prediction, us recession history, us recession 2024, housing market, mortgage rates, mortgage rates today, mortgage rates 2024, mortgage explained, mortgage rates update, housing market news, real estate news

Id: w0MteVPipjA

Length: 119min 39sec (7179 seconds)

Published: Wed Apr 17 2024