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The 3 Dimensions of Real Estate, Inflation’s Impact on Price Discovery

Jason Hartman



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Jason Hartman and Naresh co-host the show to talk about inflation and deflation. Jason shares the rate of change in inflation rates and maintaining yield with income and expense ratios. They also discuss the impact of technology on inflation, the effect of deflation on real estate markets, and the three dimensions of real estate.

Announcer 0:04
Welcome to the heroic investing show. As first responders we risk our lives every day our financial security is under attack. Our pensions are in a state of emergency. A single on duty incident can alter or erase our earning potential instantly and forever. We are the heroes of society. We are self reliant, and we need to take care of our own financial future. The heroic investing show is our toolkit of business and investing tactics on our mission to financial freedom.

Gary Pinkerton 0:39
Hello, and welcome to Episode 107 of the heroic investing show. On this show, we focus on the unique challenges faced by members of the armed services and first responders. But we also focus on those common to all investors, we aim to provide the tools that enable our listeners to secure their family, their future and their retirement, we helped them put in place passive income, a foundation with protection, and then a passive income to both protect and grow family wealth, but free up their time, so that they can focus on providing those services where they have unique genius, whether it be a product businesses, you’re going to start to produce a product or service you’re going to provide. He gives you the opportunity either as an entrepreneur in your own company or an intrapreneur in somebody else’s company to focus on those things that inspire you, all the while not having to worry about whether your family is going to make it through the next crisis through the next economic downturn, because you’ve put in place, successful, confident sources of income that will continue to produce through good times and bad. That’s the goal, right. And that only comes from having education from having educated yourself from having surrounded yourself with mentors who provide insights into when conditions are changing, that provide you advice that you can act on, to continue to succeed to continue to leverage changes to your own benefit, there were people who were wiped out in 2008. But there were many people who were made multi multimillionaires, from knowing the right actions to take both leading up to that event, but then also prospering from the opportunities that the correction provided. I was really late to the show I came in in 2011, but had the advantage of not owning properties that I lost value in 2007, and eight and nine. But in 2011, I was two years late to buying properties at an inexpensive rate, or an expensive purchase price. But I was still buying properties at $40 a square foot now 140 dollar $140 a square foot is the norm. And they still cashflow there, by the way. So I’m very proud and happy that I purchased those earlier properties. But it almost came by chance for me next time around it won’t be by chance and listeners if you continue to learn from lessons, even those from distant past and this one is a flashback Friday for from Jason Hartman. That goes back over three years. But it’s a discussion about the impact of technology on inflation, about what to expect from inflation, the impacts of deflation and how you protect yourself from that. And what we were talking about just a moment ago, the staying power that you have when or that you must have to be able to sustain ownership through good times and bad. And, you know, Robert Kiyosaki talks about having positive cash flow, that if you have negative cash flow, he said his rich dad asked him on the first condo he purchased that had a negative, you know, $100 a month cash flow, he chastised him for it. And he said, how many of those Can you buy? And Robert, you know, said not very many. And then he said, What if it had a positive cash flow? How many of those could you afford? And the answer to that is an infinite number, right? So just having staying power, having the ability to make it through good times, and bad because your property pays for itself is enormously important. I’m not saying that everything you do has to have positive cash flow. But you have to be really close to positive on a portfolio. You have to be positive on the full portfolio, which means that you need to be really close to positive on all of your investments, to really make things work out. Listen, there are others out there that will tell you that appreciation is the play that if you if you timed things correctly, you will make millions and it’s true. If you do have good timing, you will make a lot more a lot faster than depending on cash flow, the tried and true method to true to permanent wealth. The problem is is that those who get lucky with good timing also get unlucky with bad timing and they end up losing isn’t everything. And so that’s gambling, that’s not a path to true success. So all of you out there that are listeners of Jason’s podcast and that have listened to my podcast, we have consistent themes, consistent messages, as do most people who have done have grown wealth through successful real estate investing, you cannot gamble, right? You have to have staying power. And that comes from cash flow. And so, you know, Jason talks about inflationary periods deflationary periods, and how you make it through it. And following the His commandments, having the staying power of cash flow are some of the really important aspects of that. He talks about his three dimensions of real estate ownership, you know how to buy rent, and maintain those properties. And that’s extremely important. And he takes an opportunity to take a jab at gold. So I think you will really enjoy this episode. Like I said, it’s a couple of years old, but there is very little. That is that is out of date in this discussion. This is timeless wisdom, about some topics that you’ve you’ve heard, Jason, I think talked about before, but they’re packaged nicely here, and some issues that are contemporary. Today, we’re talking about these issues. So thank you so much, and enjoy this episode. And if you haven’t done so yet, please give us a rating at iTunes heroic investing calm, or on my website at Gary Pinkerton calm. And on that website, you can also find information about my new book, the one thing that changed everything, please head to Amazon, pass some money to our very worthy charity. Get that book in your hands and learn the lessons from those 26 amazing stories. Thank you so much. And until next time, to your prosperity.

Jason Hartman 7:03
Thank you so much for joining me today as we talk about several issues with my temporary co host and that is Mr. Naresh is back on the show for is this the second time no rush.

Naresh 7:14
This is the second time this month. Jason, it’s a pleasure to be back on looking forward to some good discussion, discussion.

Jason Hartman 7:19
Are you on the show a long time ago? I think you were right.

Naresh 7:22
I was on about two years ago. And I remember that show very well, because we had an inflation deflation debate. And I told you some things that surprise you. I told you that I was a huge Bernanke key fan. This is one Bernanke he was leaving the Fed. I think he was leaving, like within the next two weeks that we ran that interview. And I also told you that deflation was coming. And you gave me some some heat for that. But I was about two years ago.

Jason Hartman 7:47
Well, so the question is, who is right now that we look back? I mean, I don’t know. I almost want to say I’m wrong. But I’m not because we’ve had a little bit of inflation. But man, it’s been so mild. You know, I hope I’m not like totally wrong on this prediction about inflation, because I was pretty much an inflation bug A few years ago, and it boggles my mind that they’ve been able to just, I mean, I know it’s baked into the cake. We know the inflation is baked into the cake. I mean, you’re you’re well at least you were a bit of a gold bug. We’re going to talk about that today. So we can we can address that one in a moment. But, you know, it’s it’s definitely from a monetary and fiscal perspective baked into the cake. The only thing that could overshadow that could be the I’m gonna say the trump card, because we’re going to talk about Trump today is technology, as I’ve talked about many times, that’s the one that’s really hard to understand, you know, how big that impact of all of this incredible technology in this progress, that we’re on the verge of what that impact will be. But, you know, I mean, we haven’t really had real deflation, right? I mean, I mean, you’re not going to try and like collect on our bed, are you?

Naresh 9:06
Well, we didn’t we didn’t, we didn’t make a bet. But if you look at the inflation rate, so we spoke in probably late 2013, early 2014, and I’ll give you some data, January 2014, or we’ll take December 2013, the inflation rate was at 1.5%. So not no major inflation compare that to when we actually saw major, not major, but we saw some inflation in 2011. After it appeared, we came out of the recession, we saw the effects of the bailouts and the stimulus packages in 2011. The inflation rate hit almost 4% September 2011.

Jason Hartman 9:42
Okay, but but we do i do have to interrupt you, of course, and our vast majority of our listeners know but in case you are new tuning into the show, those official stats are always understated, even in this environment. So I would say and you know, feel free to disagree with me on this. Suresh, but I would say that you, you have to assume that the real inflation rate is 50% higher than the official number. So they tell you, it’s 4%, it’s really six. If they tell you it’s two, it’s really three. Okay, that’s what I’m saying,

Naresh 10:17
Yeah, I’m not gonna argue with how the the numbers are calculated, and said, on a percentage basis. If you just look at the improvement, or, you know, the the decrease in inflation, that’s kind of what I look at look at rather than the actual number itself. So same thing with unemployment, of course, the government calculates it their own way. And then you probably have john Williams on your show, who runs shadow stats calculated, we have his own way. When I look at his I’m more interested in the I guess the chart rather than the actual number itself,

Jason Hartman 10:49
you’re looking at, you’re looking at the change the rate of change,

Naresh 10:53
exactly the rate of change.

Jason Hartman 10:54
Okay, so So tell the listeners why. And you know, of course, this is massively important to real estate investors, you know which way this goes. And I’ve shared my scenarios and my plans. And you know, with income property, being a multi dimensional asset class, the beautiful thing is you can adjust your strategy, regardless of the environment, inflation being the home run, the best thing, especially a lot of inflation being the home run for real estate investors, deflation, being something that you’re, you know, By comparison, you’re going to do probably better than most everybody else. But again, it’s not going to be a home run in stagnation, where just kind of nothing happens, then you’ll be better off than everybody else. But again, certainly not a home run, like the inflationary environment as the home run. Well,

Naresh 11:43
it that we had our little debate back in, I think, December 2013. Now, fast forward, today, I gave you the number back then it was at 1.5%, the inflation rate,

Jason Hartman 11:54
maybe this needs to be a flashback Friday show. We’ll have the audience vote.

Naresh 12:01
Yeah. And now fast forward, the latest number that the government put out for June of this year 2015, the inflation rate is almost at zero. That’s the official numbers at point 1%. Most of 2015 has been in negative territory. So there’s actually been a good amount of deflation in 2015. And the latest projections for the July number. They were they’re saying that July was the most deflationary month that the United States has has faced since 2009. So we’ll see what that number ends up being. But I think deflation is is the worry right now, not just in the United States, but globally. That’s why China is doing all sorts of stimulation and to its economy, Greece got another bailout. And all this could end up or it will end up, in my opinion, delaying when the Federal Reserve raises its interest rates. I think they were supposed to do it in September. Now it looks looking like that’s going to be delayed because of this deflationary pressure. So I’m curious, Jason, what are your thoughts on this? And what does this mean, for real estate? moving forward?

Jason Hartman 13:19
Yeah. So first of all, interestingly, and I just read this this morning, believe it or not, Greece, the Greek economy actually grew in the last quarter. I mean, it’s amazing, right? You know, you look at what’s going on, and you think, Well, you know, how can the economy possibly be growing in Greece, it actually did grow slightly. So that’s incredible. But my thoughts are that, like I said, it’s baked into the cake from a fiscal and monetary perspective, the fact that we haven’t had more inflation. It kind of amazes me, the fact that we still are the reserve currency of the world amazes me, but at least I understand why that is true. And it’s because we have the biggest economy, the biggest military, and a lot of weight to throw around in the world and, you know, forcing other other countries to take our dollars and keep it as the reserve currency. But in terms of real estate, you know, in a deflationary environment, the whole game is about yield, or a stagnation environment, either one, or stagflation, I should say, it’s all about yield. So then the income property asset becomes a cash flow type of asset, a cash on cash return asset. And if you look on the performance at Jason hartman.com, in the Properties section, just pick any property in there and you’re likely to see cash on cash returns projected at anywhere from you know, in this I’m just kind of guesstimating here what they are because I’m not looking at it, but anywhere from maybe eight to 12% annually. As a cash on cash return, maybe even 14% annually on some of those performance. But if you see that, you know, that just shows you nourish as long as you maintain the same income and expense ratio on a property. Even if the property goes down in value, even if it’s the value is cut in half, you still have the yield. And in that environment, remember, economics is a relative game. It’s it’s not that you need to make, you know, 100% annually, you just need to do better than everybody else. Because the the marketplace and the entire economy, although there is a lag time, and by the way, the lag time concept is what kills people. Okay, everything ultimately adjusts. It just takes time for it to play out. And the people that get killed are the people who don’t in real estate have staying power, or in any other investments have staying power. And it reminds me of that sort of famous old quote, you know, where the the stock market investor complains, well, the market is irrational, I’m right. And someone says to him, Well, I have news for you, the market can remain irrational a lot longer than you can remain solvent. And so so so that’s the key. So for the real estate investor, if you can maintain somewhere close to that income and expense ratio on your property, regardless of the value is going up or down. Now, I mean, it’s hard to argue, I mean, it’s pretty much impossible to argue that real estate has been deflating, because it’s been inflating a lot over the past few years. So there’s definitely inflation there. But real estate prices aren’t directly in the consumer price index, I believe it’s called This is from memory, the rental equivalent value or something like that. And they have this equation for working out how much housing expense influences the CPI. But now you might be thinking, well, Jason, this is a good question. Okay. Well, Jason, if we do have a lot of deflation, and say that deflation affects real estate prices, which, by the way, the trend has been the complete opposite the last several years, coming out of the Great Recession, there’s been quite a bit of real estate inflation, especially in the cyclical markets that I believe are in a bubble. They’re in bubble territory, I believe. And those will adjust to maybe they’ve overstepped. So you know, what happens? Well, if the value is go down, won’t the rents go down? And the answer to that question is, maybe here’s why. You got to really dice this up. Remember, when I talk about, if the creating wealth seminars, I talk about my three dimensions of real estate, and there are really more than three dimensions, but that just sounds good. So I call it the three dimensions. Two of those dimensions are rent, in other words, what you can rent the property for, and another dimension being the value of the property. So if values decline, all the renters out there think, Well, I’m not gonna buy because the markets declining. And this is the way markets act in stocks and precious metals and real estate. This is just the nature of markets in general, where the little guy always gets in or out too late. If if we were looking at a chart right now, and you like looking at charts and rash. And you see, you know, you see the chart go up and you see it go down, you know, the little guy never buys in the trough, and never sells at the peak, it just does not happen. That’s not the way markets act, because there’s this lag time of media. So the there the little guy is all bathed in the stew of media out there. And they’re reading articles, oh, Real Estate’s going through the roof. It’s the best market in years. And you know, they got to get bathed in that for a while before they react. Okay. And by the time they react, you know, you’re you’re approaching a bubble. That’s typically how it works. So the little guy always acts way too late. Okay, that’s just the nature of the beast, it happens in pretty much every market. And every cycle, you can see it over and over, it just always repeats itself. And similarly the thing, same thing happens on a downturn, you know, as, as the price of whatever it is widgets, houses, stocks, precious metals is going down. The little guy always says, Well, you know, I’m gonna hold on a little longer, see if it comes back up. And then you know, they usually end up getting discouraged at the you know, at the trough near the bottom, and then they sell and they lose money. Okay, so this is what happens. And this is why you need to practice what I call sustainable investing. Because if you have cash flow, then you can weather the storm, you’re never forced to sell it. inopportune time, and similarly stay married. Because if you are married, and I’m not, but I’m looking, and I know you’re looking to write in a rush.

Naresh 20:09
I don’t know about marriage. I don’t know about marriage that’s for that’s for a different so.

Jason Hartman 20:14
Okay, okay. Well, you seem to be pretty motivated, you know, when you talk about your life, so, but what was I talking about? Now? We got off on a tangent? Oh, yeah, do not get divorced in a down market. That’s my lesson, because it forces you to liquidate assets at the wrong time. Okay, only get divorced at the peaks, right. So time you’re divorces. That’s what I always say. But that’s what happens. So the little guy as the market is going down, usually continues to quite happily rent. Okay? If they’re a renter, you know, and what I’m talking about is the little guy that’s renting now, and you move into a market cycle where the real estate prices are going down. And the little guy stays and says, Well, why would I buy now prices are going down, and that guy has to get bathed in that media bath for a long time. And then he hears Oh, now prices are going up, you know, a couple years later, the cycle switches. And here’s prices are going up. And he says, oh, wow, maybe I should think about buying in and he thinks about it for a while. And he hears a lot more news and time goes by. And then you know, everybody’s making multiple offers on property, things are going nuts. They’re going absolutely crazy. It’s getting frothy, you can you know, if you’re paying attention, and you’re smart, and you’re educated, you know, it’s a bubble, right? And then the little guy finally jumps in. And it’s not at the top, usually, but it’s near the top that the largest amount of people get motivated to buy. You know, you saw this in tulip mania in Holland, what, a couple centuries ago. It just happens in every market. This is the way it works. This is the way you know the way markets interplay with human psychology. So the answer to the question, that was really the question is, you’ve got to make sure you follow my commandment number five of the 10 commandments, Thou shalt not gamble, the property must make sense the day you buy it, or you don’t buy it. And that cash flow is pretty reliable appreciation and depreciation, they are darn hard to predict. And I have never met or heard of any guru or known anybody that can truly accurately predict those cycles. Nobody. Okay, not Bruce Norris, not the guy in San Diego, Robert Campbell, I think his name, you know, not any of these gurus, not Harry dent. Okay, who’s been on many times, but I tell you, though, maybe his oil prediction is coming true. And maybe his gold predictions gonna come true. So we can go off on those tangents if you like. So the answer to your question is, it becomes a game of yield in a deflationary environment where you just sit back and you collect your yield. And in that environment, every other investment is probably not yielding. So, you know, economics being a relative game, if your net worth is $100. Okay, and your neighbor’s net worth is $75 or $50. You’re rich, okay. It’s not about the the the nominal prices, it’s about the relative prices. Okay, and the relative yields. So if everybody else in this deflationary environment is only getting basically what they’re getting now, okay, in the bank, you can get a half a percent maybe give or take in the stock market. You know, most people can see that’s a bubble. Of course, you have dividend paying stocks, precious metals are down, you know, where are you going to get yield? And this is why everybody is rushing toward income property. It’s becoming this giant cottage industry, because it’s the only thing that makes sense. And I don’t think we can say we’re in a deflationary environment. But we’re, we’re in an environment the past couple of years of very low inflation,

Naresh 24:14
surprisingly, now, I don’t expect the Fed to raise rates when they come out in September, but I do think in early 2016, there will be a rate hike. What will that mean to income property investors. Okay, so

Jason Hartman 24:29
if there is a rate hike, first of all, the Fed doesn’t control long term rates, okay. So they don’t control mortgage rates directly. But of course, the tone of the Fed does set markets there’s no there’s no question about it. I don’t think anybody could argue with that. But they don’t directly control mortgage rates. Okay. So if that happens, remember that three dimensions of real estate concept people that are in marketplaces only have three choices. They can buy They can rent, or they can be homeless, maybe have three and a half choices they can live with their parents. Okay. Which is, is a definite truth of your generation generation wide rash, right? Yeah, it

Naresh 25:13
is it is pretty common 30 year olds living with their parents? Oh, yeah, no, I

Jason Hartman 25:17
know, it’s way too common. But But anyway, so you have that situation. And that’s the choices they face. So if rates are high, that means that puts housing affordability is usually lower in that high rate environment. So it’s harder for them to qualify harder for them to buy. It definitely has the effect of overall softening real estate prices, which, you know, if you’re a capital gains investor and a speculator, you definitely don’t like that. But if you’re an income investor, usually when housing affordability is low, we see upward pressure on rents. And the reason I say usually not always is because of this. I know, I’m hedging that a little bit, I get that. And maybe you notice that in my language, is because during the Great Recession, I’ll start this in about 2007 for three years in there between 2007 2010. Oddly, because of all the workouts and the loan modifications, I mean, that was bad. Usually a recession is not going to be that bad. Okay, that was the worst economy we had in seven decades, everybody knows. But in that time, we didn’t see much upward pressure on rents. In fact, we saw some minor softening and rents, because the government stepped in too much. And we had an election in 2008. And all the talk was, Oh, we’ve got to keep people in their houses. But no one ever asked the question, are they living in a house that they really can’t afford, don’t deserve. And it’s too much house, ie, the school teacher who got a no income dock loan, and they make $65,000 per year and then somehow bought an $800,000 house like explain that, to me. It’s psychotic, of course, right? But that kind of stuff was happening. So the talk was, well, let’s just keep everybody in their house. And so there was so much pressure on the banks to do loan modifications and workouts, and short sales after, after all, was considered that, you know, you have a lot of people living in their house for free, there are still people living in their house for free in the judicial foreclosure states, like Florida and Illinois, right, that it’s just insane. I mean, they got to kick them out and let the market clear and let price discovery occur. That’s a key term price discovery. Okay. So remember, multi dimensional asset class always gives you an opportunity to play the game in different ways. You didn’t ask what if the opposite happens? So I just want to talk about that real quickly. So what if, what if rates stay low, and housing affordability is good and say the economy improves and wages actually go up, which hasn’t happened in quite a long time, in any real way. And so say that houses look cheap, well, then then the rents soften, but the prices go up, see non correlating indicators on the multi dimensional asset class. So when that happens, tenants rush out, and they try to buy a house. And so you lose your tenants, your rent soften, and you got to accept lower rents, because there’s downward pressure on rents when it’s a market where everybody’s trying to buy. So if that happens, your strategy is paid, my value is going up, I feel good refi till you die, or even sell the property if you want. But, again, I don’t often recommend selling. I definitely like the buy and hold philosophy, but you could sell into a 1031 exchange, and defer your taxes into a lower price, more linear type market. And the example there would be that, say, for example, in 2004, you bought something possibly from you know, from me, right? Okay, for my group, it was in Phoenix, and then those prices went way up. And then you sold Phoenix got a capital gain, although your rents were softening and Phoenix at the same time, because everybody was buying, okay. And you sold on a 1031 tax deferred exchange, and then you bought properties in other more linear markets at that time, we would have had you buy in Dallas, Houston or Austin, right? Or maybe Charlotte or Atlanta or Indianapolis, and you would have you would have moved into the more linear market with better cash flow, stronger rents, and you would have had a nice capital gain. So you, you probably would have been able to take that one Phoenix property and buy two in these markets. And you see how this is just such the ultimate wealth. grater, you got you had no tax consequence, you improved your cash flow took a capital gain, win win win. Okay, boom, real estate investors, just that’s why that’s why you know, so many people who got rich in real estate, and nobody seems to know anybody who did it in the stock market. That’s not an insider. Does that answer the question?

Naresh 30:23
Oh, yeah, that was a great answer. And I think it was complete, because he also talked about if rates stay low. Now I don’t expect rates to, to stay low. But it’s good to know, kind of what would happen if that if that were the case,

Jason Hartman 30:34
we’ll see. Hey, we’re, of course, going long as we always do, I want to postpone the talk on Mr. Donald Trump. But I do want to talk about because it relates to this discussion more gold, and oil and China just for a few minutes if we can. But first, I definitely want to encourage listeners to join us in San Diego, if you like these concepts we talked about, we’ve got Jason Hartman University live a two day event in San Diego in the Mission Valley area, and it’s coming up quickly. Okay, so go to Jason hartman.com. Register for that my ethical bribe is, if you want 30% off of that two day event, email a writer review on iTunes or Stitcher Radio for us. And email the screenshot to us at reviews at Jason hartman.com reviews with an S it’s plural reviews, reviews at Jason hartman.com. And we will email you back a promo code for 30% off, we really appreciate your writing reviews for the shows. And we would much appreciate that. So do that. And then right after that, you can go to Jason hartman.com and register for the event with that 30% off promo code. And then of course, we’ve got our super high end luxury event at the end of September about a month later. That is the venture Alliance. The second trip for the venture alliance in stunning, spectacular, Newport, Rhode Island, some of the biggest mansions in the world, definitely the biggest mansions, or the most ornate and incredible and opulent mansions in America. And, wow, that’s gonna be a great event. You know, we’re gonna be hanging out with real estate entrepreneurs. And I’m lining up a couple of good speakers for that event. And we’re going to tour the mansions we’re going to have five star dining and venture alliances my mastermind group, it’s pretty exclusive. It’s real high end. So you can check that out at Jason hartman.com or ask your investment counselor about that. And we can give you more information about that. But those two events coming up. Okay, no rush. What about gold oil China in just a few minutes here, what do you want to talk about there?

Naresh 32:55
Okay. Yeah, that’s a lot of stuff. So let’s start with gold. Gold gold ties in more with what you just you just discussed on inflation fed rate hike and all that gold right now is out about the prices at about 1115. That’s $1,115. And I’m curious to hear your thoughts in general about gold because you’ve been pro inflation I pro inflation, but you’ve been of that thinking that there would be inflation and gold is generally tied to inflation. So if you look at a chart of inflation, and the chart of gold, you see that there’s a very strong correlation between the two. Of course we talked earlier about right now being a very deflationary deflationary environment, which is why Oh, no, I’m not gonna let you say that on the show. It’s not a very deflationary environment. It’s a we are in an environment with very modest inflation, except in real estate. Okay.

Jason Hartman 33:50
I mean, real estate in the cyclical markets has been inflating a lot Atlanta, is this even? You know, that’s a linear market that went up 10% last year. Okay. You look at some of the really cyclical markets like South Florida, California, the northeastern the expensive areas northeast, and there are way more than that. Okay. So, we it’s not, we don’t have deflation. Okay, I’m just, I mean, do you think we have deflation? Really? I mean, was is that your stance? I’m just curious, like, we didn’t really settle on that.

Naresh 34:22
So compared to 2009. The deflation not even close. Now. I guess I was wrong and saying we’re in a very deflationary environment.

Jason Hartman 34:33
But he let me interrupt you though. In 2009. Food inflation was high consumer products inflation, except for technology based ones was was pretty high. Okay. So we had real estate. Now that’s interesting, by the way, counter cyclical, maybe real estate deflation from the Great Recession. But inflation in a lot of other items. I mean, food inflation was was pretty bad in 2008. 2009 oddly,

Naresh 35:01
yeah, well, again, I guess I’m talking more about the rate of change. And overall, deflation as a whole and inflation as a whole. And what you said was, I guess, stagnant inflation or low inflation environments. And so going back to gold, I’m curious to hear your thoughts. Why if inflation is supposedly coming, or if we even had inflation? Why has gold just been tanking so much over the last four years? And why

Jason Hartman 35:29
am I not telling all my listeners to go out and buy gold? Right? Well, first of all, I gotta say, Oh, my God, do we really need to talk about gold again. And the reason I say that, and you may not have even listened to some of these old episodes, but we have talked about gold. So extensively, I even told my listeners, this was a while back, that I was going to shut up and stop talking about gold. But I haven’t talked about it in a while. So it’s kind of worth talking about. And, you know, gold is, is a measuring stick gold is money. I don’t think it’s a very good investment. There’s a good blog article on Jason hartman.com, you can probably find, you could just probably Google it. I think it’s called like seven reasons real estate is better than gold or something like that. It doesn’t produce income. It’s just not a good asset class in any way. I don’t know. We don’t have time to really go into it in much detail here. So just understand. Let’s let’s take that up on the next episode, Naresh. We’re at 32 minutes already. There’s just too much to tar. It’s gonna take us too long to talk about agree.

Naresh 36:31
Like you said, gold oil, China. There’s too much so we’ll say that.

Jason Hartman 36:33
Yeah, absolutely. Okay, so listeners, we got a lot coming up on that. And I definitely want to get to that. And we’ve got a lot of stuff in the back catalogue on that topic. So there’s a lot there on gold, and I’ve talked about it extensively. And you know what, it has been a while no rash. So I am glad you brought it up. And you know, next couple episodes, we’ll get to the gold oil China topic. And by the way, it’s interesting because oil is down again. And that’s been fairly deflationary. So we’ll, we’ll talk about that. And we’ll see if Harry dent is going to be right about that stuff. Okay, listeners. Thank you for joining us today. Go to Jason hartman.com. Join us for our two upcoming events. Jay Chou live Jason Hartman University live in San Diego. And also, you can talk to us about venture Alliance, our mastermind group. We’d love to talk to you about that, and we will look forward to talking to you on the next episode.

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