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Key Factors RealEstateAF
Educational Podcast for Consumers, Mortgage & Real Estate Industry Professionals. We'll Talk About It All! Key Factors podcast, powered by https://ReviewMyMortgage.com . Your Host Mark Jones invites Industry Pros to help uncover & educate on the key factors of various topics. There’s something for everyone so let us be your guides and get educated. Subscribe & Follow on Spotify, Apple Podcast, Facebook, Instagram, & all other podcasting platforms. Host : Mark A Jones Founder of ReviewMyMortgage.comProducing Branch MangerSr. Loan Officer. NMLS ID# 513437NMLS Consumer Access: http://www.nmlsconsumeraccess.org/Powered by ReviewMyMortgage.com
Key Factors RealEstateAF
The United States Couldn't Even Qualify for a Mortgage | National Debt Crisis Part 2
Ready to tackle the $35 trillion U.S. national debt? Join us as we bring in Kevin O'Leary, renowned Shark Tank investor, to present his ambitious proposal: tapping into the Arctic National Wildlife Refuge for oil extraction and channeling the profits towards debt reduction. We dissect his plan, drawing parallels to Norway's sovereign wealth fund, and debate the legislative safeguards necessary to ensure these funds are allocated correctly. With hosts Mark, Andy Hilger, and John Hudson, we navigate the complexities of the U.S. debt clock and its economic ramifications, stressing the urgency for viable solutions and fiscal responsibility.
Ever wondered why the stock market’s success doesn’t seem to benefit everyone? We break down the staggering economic disparities where the top 10% reap most of the benefits, leaving the bottom 50% with barely a sliver of the pie. We challenge the misconception that a booming stock market can offset the national debt, analyzing the economic policies of political candidates and the critical need for spending cuts to combat inflation and safeguard family finances and retirement savings. This chapter underscores the pressing need to reevaluate our economic strategies.
Shifting gears, we scrutinize the ways the U.S. government generates revenue and the effects of "printing money" on inflation and interest rates, examining how these policies impact consumer affordability and the housing market. The conversation pivots to the BRICS coalition's efforts to establish an alternative trading system, the historical petrodollar agreement, and current geopolitical tensions. Finally, we tackle the challenges of financial literacy and the importance of staying informed in an era rife with misinformation. This episode is a treasure trove of insights, perfect for anyone eager to understand today’s economic landscape.
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Host: Mark Jones | Sr. Loan Officer | NMLS# 513437
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All right, and me, you knew this.
Speaker 2:You wouldn't be listening otherwise, Kevin O'Leary. O'leary Investments, Shark Tank fame, friend of the show. I believe we got you mic'd up Now, Kevin. Thanks for being back with us here on the Hill. Appreciate your time. Sir, as always, I only have a couple here with you, so I'm wondering what you make of this $35 trillion number. Put it in context for me. How big of a problem is it?
Speaker 3:Big, big, big, big, and I think it's time to start addressing it. I mean, everybody has an idea. Here's mine, and I hope we can pull this off we have to open up the ANWR. The annual federal royalty on any wellhead is 16.23%. If we open up the ANWR, sell the oil to the Asians. We can reduce that debt by 20% in five years by just making sure the law says that all 16.23% of the royalty goes to reducing debt. That's just the ANWR, that's oil. I think you can sell that because people will understand. If we don't do this we're screwed and, frankly, even if you hate hydrocarbons, you hate oil. You hate debt more. So this deal would be a piece of legislation that says there's no pork. The 16.23 off ANWR goes to national debt. By the way, the Norwegians did it in 1976. And within 11 years they had a trillion dollar fund. They're now the largest sovereign wealth fund in the world. We can do it too.
Speaker 2:If that doesn't happen, though, I hear your idea and I understand your idea, but that's your idea and if Washington doesn't take you up on it which is, let's be honest, probably unlikely, right? You know how things work in this town. What do we do? What happens next?
Speaker 3:You know what I say to that. Give me a better idea. What do you got? Because right now, with an economy that's probably getting a little softer you guys have just been detailing the consumer may be getting softer the McDonald's data people are worried about that, but this deficit is so huge that now we're at a place where we've got to have new ideas. If you've got a better idea, bring it, but I'm telling you it's got to be addressed with legislation. Other countries have done this where they say OK enough, it's so big that we've got to pass a law that makes sure the money doesn't go somewhere else. The biggest problem we have in Washington is pork. It's back in a very big way, and two or three trillion of this debt has just been spent in the last 36 months with chips and science, ira infrastructure, yada, yada, yada, woof, woof, woof. It doesn't matter what party's in place. This is just too crazy and I think lawmakers are starting to get a little uncomfortable about it.
Speaker 2:Kevin O'Leary, I wish we had more time. We know we'll have you on back soon. We got to run out of break here, but appreciate you coming on Well.
Speaker 4:Ladies and gentlemen, fans, listeners, supporters, we are back with another episode of Key Factors Podcast Real Estate, af and the AF stands for, and finance, and that's what we're going to be talking about today. I brought along two intelligent gentlemen that would like to share in this discussion, because the topic is so big you can almost call it the national US debt. So, real quick, let me introduce my guests. I've got to my right, andy Hilger. How you doing Good Mark? How are you Doing very well, very, very well. And then I've got John Hudson how you doing Good Mark. How are you Doing very well, very, very well. And then I've got John Hudson how you doing.
Speaker 5:John Mark, it's great to be back, and I've got Boo Boo Bear here with me today too.
Speaker 4:And that is officially the second miniature Yorkie, mini Yorkie, we've had on the show. That's awesome, mini Ozzie. My apologies, I have one. Yeah, they're great dogs. They're super, super smart. Oh, she's awesome. Pain in the butt sometimes, though.
Speaker 5:Yes, she could be a whiner there you go Great to be back.
Speaker 4:Well, guys, today we're going to be talking about this bad boy. I'm going to throw it up here on the screen, jc, if you could. We're going to be talking about this US debt clock. It's very nuanced. There's not a lot that you see out in the media regarding this, this website. Anybody can go to usdebtclockorg and, briefly, I'm going to run through what these little things mean and then we're going to talk about each one of them, or we'll go off on tangents and rabbit holes, because this is such a big topic.
Speaker 5:Yeah, it's a death spiral. It's like a black hole of stuff.
Speaker 6:There you go Exponential growth in the wrong direction.
Speaker 5:Right.
Speaker 4:This is what we're dealing with. Yeah, so there may be folks out there. Both John and Andy have been on the podcast before, but if you could, andy, tell us a little bit about yourself, and then, john, you can go next.
Speaker 6:Yeah, andy Hilger. I'm a local real estate broker with the Lafayette Hilger Group and we work with your company for the mortgage side quite frequently and appreciate the invite from time to time to participate in cool content like this Absolutely, john.
Speaker 5:Yeah, no. Co-founder of H&M Mortgage Group and been a mortgage professional for doing this for 26 years. Student of the business, fierce advocate for home ownership. I love it. So, yeah, and I love hanging out with you and sharing my hot sports Always.
Speaker 4:And you can't spell home without H&M? No, you can't spell home without H and M no, you can't. I love that. Um. Well, gentlemen, this topic today, um being so massive we're we're like I mentioned to you guys, we're going to have a second part to this where I'll have some other uh give their feedback on this, but I want to kind of hone in on this um right out the gates. Um. So just to go over some basics for the folks at home listening, I want to focus on this top quadrant here. This now, mind you, I have to preface this is not real time. This is actually an equation that they do that projects the real time. It's pretty accurate. Um, they make adjustments from time to time, but it is pretty accurate.
Speaker 4:We're currently sitting at about $35 trillion in national US debt. This is the total debt, matter of fact. Let me just run through these real quick. We've got the debt per citizen. If that were to be divvied up per citizen in the United States, then they have the debt per taxpayer. As you can see, that increases substantially, almost threefold, and we'll give our opinions on this stuff as well. This is the US federal spending, officially, and I want to say this is annually right here, then you've got your US budget deficit right here and you can skip those. So down here at the bottom, this is the US federal debt to GDP ratio and, as you can see, in 1960, we were at 52 percent, then 1980, 34 percent. Basically, we got our stuff together for a little while there. Then it started to creep back up, but now we are currently sitting at one hundred and twenty two percent in the red, meaning we are spending way more than what is coming in.
Speaker 5:If households treated their finances like the government does, we'd all be out on the streets.
Speaker 4:Yeah, we would all be bankrupt. We would all be out on the streets. Absolutely, that is a great way to put that bankrupt. We would all be out on the streets. Absolutely, that is a great way to put that. There's quite a few different things that hopefully we'll be able to tie together on this. For example, if we have $4.9 trillion in revenue coming in and then revenue per taxpayer 14,000.
Speaker 4:And you've got let's see here this matter of fact, let's see if I can zoom. I don't think it'll let me zoom, but you've got some statistics on here that don't fully jive with what we're actually doing or coming up with, especially down here at the bottom. In simple terms, if we are spending money on these three items at the bottom, you can see Social Security, you have Medicare and you have liabilities. So this is basically interest and things of that nature. That is just continuing to compile and compile. Now there was another huge number that I want to find on here Interest paid, boom. Total debt $101 trillion. Then there's another that is about a $600 trillion number. Where can I find that Right here? Nope, nope, that's not it. Yeah, currency and credit.
Speaker 4:Yes, right here Currency and credit. What this means. This number, $629 trillion, is a figure that we owe to other countries and or have in debt. That's just on paper.
Speaker 6:Right.
Speaker 4:Treasury market? Absolutely. It's just like a fugazi of money that is trickling to steer these numbers. So at what point? I mean guys, tell me your observations on just what we've discussed thus far.
Speaker 6:I'll start with exactly what John said here. Mark, this is like me saying I owe you $10 billion. I owe you $10 billion. We'll work out a plan and we'll pay it back. Well, at some level, you know, andy's never going to be able to pay me back $10 billion, and that's exactly what you're dealing with here.
Speaker 6:I level you know Andy's never going to be able to pay me back $10 million and that's exactly what you're dealing with here. I mean you see the numbers and what. The debt is growing at a rate far faster than what. We're bringing in money through all sources of revenue, which would be mainly a combination of tax revenue, and the government brings in money through the bond market all the treasury bills, t-bills, treasury notes. The way that bond market works is they take lump sums of money from other countries or anybody that wants to invest in the United States. And the funny thing just a little side note, fun fact is these are by the United States credit agencies rated some of the safest investments in the entire world for what that's worth, and you know you want to collect that interest rate.
Speaker 6:You loan the United States a billion dollars and then, if it's a five percent yield, they're going to pay you that percentage every year. What would that be? Fifty million?
Speaker 6:dollars a year for 10 years and on a 10-year bond, on year 10, you get your initial investment back, and so the United States government makes a lot of money from that bond market or borrows a lot of money through the bond market like that, and it's gotten a little out of hand. We've borrowed more money than we're ever going to be able to pay back. That is just a fact, I believe, and other countries are starting to figure that out. If you do any look into it any at all and track what holdings are of US bonds, japan's always number one.
Speaker 6:China has been number one forever, but they, for the last few years, have been aggressively selling US Treasury bonds to the extent they can, and that's another thing that people don't understand. When you're talking about billions and billions and billions of dollars, it's not that easy to just go sell a billions of dollars. Somebody has to buy it. There's a liquidity aspect to this as well, and so China now is below 900 billion in US bonds now, and they've been the biggest holding for a very long time, and many countries are selling, and there's a reason for that we can get into, but it certainly doesn't bode well for this. One of those reasons is probably at some point, you know, just in that scenario that we gave earlier, if I owe you $10 billion and that debt keeps accumulating long before we get there, you and Kristen probably have a conversation and go man this guy, andy, that we've loaned all this money. I don't know if he's going to be able to pay this back Right, and I think at some level that conversation is being had or has been had, and maybe it's time to peel back some of these US dollars.
Speaker 6:That on another fun fact we'll get into later, fun fact we'll get into later most countries in the world have had to keep on hand, due to the way OPEC and Saudi Arabia worked, the petrodollar agreement from many, many years ago, and we can go into that later. But they have to have access to US dollars because US dollars is what oil is traded in only up until very recently, and the bond market is the way that they retain that large amount of money in a liquid form, where they can sell some and use it for commodities and have access to US dollars in real high dollar quantities. But I think that's changing actively actually right now.
Speaker 4:Yeah, I'll ask you why you think it's changing after Okay, or not after the podcast, but shortly so, john, what are your thoughts?
Speaker 5:Well, I've got lots of thoughts, right. You sit there and you watch that and it's hard to not just be mesmerized by this calculator that's just running and running, and running, and running and running. You almost think it's fake, right? You almost think it's fake. And the real problem, in my honest opinion, is not enough people talk about this. The talking heads in the media right now would rather distract you with other items.
Speaker 5:There is a very important election that's happening in a couple of months, absolutely, and the only way that this gets fixed is you've got to get your spending under control. That this gets fixed is you've got to get your spending under control. And what I hate is or what really kind of chaps my rear end is what the talking heads will kind of allude to on television and whatnot, or even on the radio, is oh, the Dow is this, the Dow is that. Oh, and debt is okay, because then stocks are going to go up and trust me, I am the farthest thing from an eat the rich kind of guy, but check this out. So the top 10% net worth households in the US own 93% of all stocks in mutual funds.
Speaker 4:Wow, that's a. Not only is it, yeah, that's correct the top 1% own 55%.
Speaker 5:So who benefits if we continue to run up debt and their equities just continue to grow? Right, that's the top 10% which I mean. That doesn't help anyone else.
Speaker 4:So safe to say that it is a clear indicator that the stock market is not how we should base our economy.
Speaker 5:Correct, and so many people they just get led that that this is what you should believe. It's the same reason why people think they need to put 20 percent down to buy a house. Correct, yeah. So check this out the bottom 50 percent of America own just one percent of all stock in mutual funds in this country and those are typically in 401ks for your employer.
Speaker 4:It's not as though they made a conscious choice to say I want to invest in this and that and that. No, they put it in a fund or I fund of funds.
Speaker 5:They don't even know what's going on, it's just happening. So then I started going down this rabbit hole in show prep. Right, so to be in the top 1% in this country, your household net worth needs to be worth $13.7 million. Now check this out. And then this was actually fascinating me too Deporation To be in the top 2%, it drops down to two and a half million, which is still a big number out there. But that's a big difference. It's a huge difference. The top 5% is only 1 million, and then to be in the top 10% is $855,000. Wow, so again, this notion that, hey, us debt is okay because the stock market's going to do great, that doesn't benefit most people out there. No, not at all by far. And so then you get into what's happening with the selection.
Speaker 4:And I don't want to really take things political, but you have, and it's difficult not to with this type of topic.
Speaker 5:Correct, because you've got somebody that is clearly hey, we're going to continue to spend money, versus somebody that's a business person. Now, I really don't care about any social issues, same, I don't care what you want to do or how you identify yourself. There's only one thing that is a concern to me, and that's my wallet, and it's because I mean I've got a puppy to take care of, I've got a daughter, I've got a family, right, I mean these are the things that we should be worried about as a society. And again, I'm not a tax-eat kind of person because, check this out, the top 10% of earners pay 75% of all taxes.
Speaker 4:That's right and to not to combat that, but to add the educational piece or the data behind it. Jc, if you could throw that reference back up Right in here. This shows the average or median income nationally, thirty nine thousand, and then it shows to do. Where is it? I'm looking for taxes paid per individual. If it was a fair budget or if everybody paid their fair share. I think it was something along the lines of 13.5. Let's see if I can find it. Tax revenue, blah, blah, blah, blah. Where is that?
Speaker 5:Either way, you know it's going to be a number that is really. It's still inconceivable that people don't have Right. So then you think about this right. So all this does is continue to contribute to inflation, which continues to increase interest rates, which increase costs, which obviously makes the debt clock spiral go faster. Right, because now your debt service continues to go up, but even back on the family side. So Primerica released a report about a month ago showing that 40%, 44%, 46, it was 46% almost half of all middle income earners in the country have either severely cut or cut out altogether contributing to their 401k. That's right. So how in the hell do we help these people?
Speaker 6:Okay, that's right. So how in the hell do we help these people? You know what comes to mind, john. These statistics you share are pretty eye-opening. The concept of a Ponzi scheme is what comes to mind. There's a debt spinning out of control. That we all know, and anybody with any education level knows, is the numbers simply don't add up for it to ever get paid back. Meanwhile, the top 10 percent are making a huge you know money, hand over, fist out off of equities within the same system that are going through the roof.
Speaker 4:It's very true, and it's a bit of a conundrum. You have to recognize that that's.
Speaker 5:Yeah with that, without a doubt. So, so, just the reality is, the only way you fix this is, ultimately, you've got to cut out spending.
Speaker 4:Yeah.
Speaker 5:And slowing it down doesn't even do anything, because your debt service is still so high.
Speaker 4:Well, let's do that. Let's break down real quick for the folks, and what I was looking for was right here. So essentially, we've got 4.9 trillion in revenue and we're going to talk about what revenue is generated, how they can generate it, but per citizen, revenue is 14,783. Do you pay more net in taxes? Pay more net in taxes.
Speaker 5:The key word there is citizen, which implies legally.
Speaker 4:here too, that is correct. That is very good, and they separate a couple of these things. That's not one of them. Now, the concept that I'm articulating here is, if people say everybody needs to pay their fair share, well, everybody's fair share is $14,783. So if you paid over that, then technically you are paying more than your fair share into this thing called taxes. Correct, right. If you didn't pay anything or you got a tax refund, anything along those lines, you're a part of the folks that are not paying their fair share, logically, right. This is not an opinion, this is just using data.
Speaker 6:You're using common sense. That's not fair. You can't do that anymore.
Speaker 4:It's so true, it is so true. So, guys, what ways does the US government generate revenue? Because when you're dealing with, we'll call it a P&L. The only way to get your P&L back to black is increasing revenue substantially or lowering your expenses, which creates a bottom line for you Taxes?
Speaker 6:Yeah, and I would include all fees and taxes. Driver's license, hunting license All that is ultimately tax that is just renamed differently for different purposes. And then selling US bonds. And even when you hear the term and it comes up frequently because apparently we're very good at it or like to do it you hear the term printing money, you know that we're going to print more money. It's not actually printing money. Money prints take place all the time, currency's redone and up and renewed all the time and you go to the bank and get fresh currency, but that's not what they mean. Printing money is the United States government buying its own bonds. When they buy its own bonds, they buy it from themselves and put it in this system where it's going to get paid back along with everything else.
Speaker 3:That's right.
Speaker 4:You know what I mean.
Speaker 6:And that's what they call printing money, the Ponzi scheme. The Ponzi scheme, yes, that one. We would have thought of that, john.
Speaker 5:No, I'm kidding, I'm kidding, there's definitely some multi-level marketing.
Speaker 6:These are the real pros.
Speaker 4:And that figure that Andy is referencing is this large number right here, $629 trillion. That is out there in bonds, out there in debt. That is propping us up and it leads to this idea of okay, if the only way for the US to generate revenue is taxes and fees and selling bonds, well, what happens if nobody wants to buy our bonds anymore?
Speaker 4:Well, right, because all this does is it devalues the dollar, yes, sir, and makes it worthless that actually leads to another topic and I don't know if you guys are ready to get into it just yet, but the idea of this inflation yeah, if inflation stays higher, essentially it runs off some of the paper debt, essentially, which hurts us but helps that budget. You guys ever think about that?
Speaker 5:Yes and yes and no. I mean it really does. I mean, look, there's going to be pain, regardless, absolutely. And it really is across the board, Because you know, we saw it, and probably the greatest example for people's short-term memories is what happened when mortgage rates dropped to two and a half percent. It was a frenzy. Where was the inflation? Inflation was, yeah, absolutely Right. I mean we got 10 to 12 years worth of property price appreciation in two. That's right. And then who did it hurt? It hurt the American people, people trying to buy a house, yep, and at the same time, too, I mean, who did it help?
Speaker 4:Us Well, yeah, I mean, we'll be honest.
Speaker 5:It was temporary, it was short term. We paid a lot of taxes because of it. Absolutely yes, that is correct. So it is a chess game, and that is a chess game that the Fed is in a very tough position, because you're right. Because you're right, the longer that they keep rates higher for longer, the more that there's going to continue to be a runoff of government held treasuries. Sure, you know they're ultimately going to be paid off. It's going to run off of that. You're also going to have more inventory coming back in, right, so you should be seeing some suppression on home prices, which I kind of believe were there.
Speaker 5:I mean, the American consumer is tapped out. I mean, every loan application I see right now is they just can't afford the payment anymore. We finally hit the X mark, right, I mean, it's Finally crossed the line. Yeah, yeah, so higher for longer is good. But at the same time, too, now you run into this potential of well, if we drive into a job loss recession, well, now there's less revenue coming in the door. It's absolutely correct. But the only good part of that would be that rates are going to be forced to go back down, correct, which is going to lower the debt service? It is Right. But in turn, what is that going to do? Forced to go back down Correct, which is going to lower the debt service? It is Right.
Speaker 4:So but in turn, what is that going to do with properties again?
Speaker 5:Well it'll, the freeding frenzy will come back. There you go, the supply and demand that basic concept.
Speaker 5:So more fun fact for you, right? So 22% of all US mortgages right now that are outstanding are below 3% on a fixed rate. 57% are below 4% on a fixed rate. 76% are below 5% on a fixed rate. Now, honestly, if we ever see two, three, even low four interest rates again, then there's something really, really wrong with the economy. I agree, I hope that we can get down, maybe into the mid fives, because maybe that might be enough to get some people off the ledge to go. You know what? I'll go ahead and sell my house and maybe buy something else, right, because the more inventory that we're also able to get out there into the marketplace, that's right Is going to bring, you know. It's going to put pressure on home price, you know, increase, right, and then maybe we get some affordability back.
Speaker 4:Well, I to use as an example I just finished a Zoom call yesterday with a good close friend of mine and they reached out to seek advice for their situation. He's getting ready to go back to school to become an attorney and taking that, that, that lunge, is going to set their finances in a different direction than they have been. Mind you, he makes good money now. He's just life change. Uh, I want to seek something that has more meaning, et cetera.
Speaker 4:So their goal, or their idea initially was to sell their current home 500,000 plus, uh, purchased it with a 5% interest rate, so the payment you're looking at about 4,000, 4,200 on 500,000, plus purchased it with a 5% interest rate, so the payment you're looking at about $4,000, $4,200 on $500,000. Coming to the conclusion and I'll make this story short is if they were to sell their home currently, yes, they'd get a little equity out, which helps their situation cushion-wise, but that wasn't their goal. It was to lower their monthly expenses. So the idea behind selling 500 at a $4,200 payment so that they could downsize and hopefully get a lower payment, leads them all the way down to a $300,000 home. Or else, if you want 400, it's going to be the same payment you have now.
Speaker 5:Right Literally.
Speaker 4:Right, so the advice that was given there, where do?
Speaker 5:you find a $300,000 house Touche.
Speaker 4:Yeah, advice, given there was guys, it's probably best to look at other assets, other factors in your budget to save that monthly. Let's take some of these savings and pay off this auto loan so you can relieve $800 a month in your actual monthly debt and just buckle up because the idea is you just bought this house two years ago, so is there equity? Sure, there's a little bit of equity, but not enough equity to justify the downshift and the lateral move in your monthly budget. Yeah, bottom line.
Speaker 5:Not to go too far off a tangent, but you just said something that this is something that does actually concern me is. I mean, you and I have this conversation all the time. We see the new home sales counselors not licensed advertising 3.99% rates, whatever you know, I'm going to continue to troll them and ask them where their NMLS number is, but, but where I'm going with that is, we all know where that money is coming from. Well, the consumer doesn't, but they're financing all of their incentives in the price of the house. That's right. So we are moving towards a recession. Mortgage rates will be coming down over the course of the next year two. How are those people going to be able to refinance and into a lower rate, if they don't have the equity in that property Because it's all been built?
Speaker 4:up. That's a good point. It truly is. And what John's talking about with the new construction model is they are pushing for these two one buy downs heavily, which most, if not all, of us mortgage professionals can do that loan for anybody. Does it fully make sense to do that? You're taking a temporary rate buy down where you're paying all this money up front, you're just paying the interest for the first year and then two years if it's a 2-1 buy down, so that you can go potentially next year to refinance. But then when you go to refinance there's no equity. Why? Because you bought the rate down already.
Speaker 5:Yeah, Because you finance $30,000 of incentives in there. That's right, so I mean, and that has definitely played into an inflationary impact on housing.
Speaker 4:But and people will ask well, what's the justification for them charging 300, I'm sorry, 30,000, 40,000, 50,000 over the sales price? Well, they're not. They're the ones that are controlling the sales prices and the comparables within that neighborhood.
Speaker 5:Until they want to close it out.
Speaker 4:That's right, that's right, and then it's fire sale.
Speaker 5:Yeah.
Speaker 4:Yeah, so you mentioned something that actually is on here, and it's employment. Let's see here this figure, right here and I'm going to zoom in so people can see this a little bit better US workforce and official unemployment. So right now it's sitting at 6.8 million in unemployment, and that's the statistic, or the data, the figure that is being portrayed to the public on all these media sources. Now see this number right below it, the actual unemployment 13 million essentially. So double almost what. Yeah, it is double what they're portraying. So if it says 3% unemployment rate, it's probably at six. And if we were basing our Fed decisions on unemployment, what number should they be using? Well, right now they're definitely using this one, which is why rates are higher, but if they use this one, we'd have to see rates come down because essentially, that would put that indicator in their scope of what it is that we need to move this needle. Essentially.
Speaker 6:And I don't know if you guys have noticed the cool trend lately on this topic, because I do look at these numbers every month when they come out. And now, when the numbers come out every month, they provide you with that lower number that we all know. That's not correct. But then there's also a revision made.
Speaker 3:Have y'all seen that?
Speaker 6:We looked into it and last month actually is this Well, that's not on purpose and that's psychological. When you're looking at the data right now for June, nobody cares about May anymore. It's behind you. You know what I mean. And so the information comes out and down the road it's going to be there, but when people actually read it and process it and make decisions off of it, you are being provided with inaccurate information.
Speaker 5:That's correct, just is bottom line and it is 100 percent political 100 percent politically motivated. I mean it's, which is a shame, right? Because, again, I really don't care what side of the aisle you are, as long as you get that under control and stop spending money.
Speaker 6:That's a complaint I've made for a while now. You know, most recently with the situation in Ukraine. It was eye-opening. I've complained for years that politicians can't agree on anything. They can't agree on anything. They can't agree on a budget, they can't agree on how to spend money. You know you need ten dollars. Nobody's going to agree and they're going to be deadlocked on that ten dollars. We need one hundred billion dollars for war. Everybody can agree today to send one hundred billion dollars out for war Without question. Don't need it. The bill doesn't need to be read. We all agree. We're good, Send the money now. That should be very concerning for people.
Speaker 5:Also in that bill. How much of that is also pork.
Speaker 6:I will refrain from speculating how much pork and how much side deals and money is being made within that $100 billion. I just think I don't want to know. I'm certain it is astronomical Right.
Speaker 4:Because, in the end, this money that they are using to pay for all this stuff, it's our money. Yeah, it's our kids. Absolutely. It's our kids' future and our current money. If you look at it grand scheme. Now, that being the case, man, there's so many different ways that we can go on this sucker. There really is. So we were talking about the ways that revenue comes in. I'd like to hone in on where the money is being spent, because you hear a lot of stuff like Social Security is going to be cut and Medicaid is going to be cut. So, if you look at it, grand scheme, that's the totals. Let me get to the average due to do. It's got to be here somewhere. That is the totals. Twenty seven. There's got to be one where it shows how much we actually spend each year. Uh, to essentially balance this budget, so to speak. So, if we've got a 4.9 trillion coming in, what we spend is those three factors that I had mentioned before, and they're on there somewhere.
Speaker 5:Yeah, but like if you go up to the top left all the way there, you see US.
Speaker 4:That's exactly what I'm looking for. Yep, so this right here, guys, these four boxes one, two, three, four is literally where the largest budget items go. You've got your Medicare and your Social Security, two of the biggest talking points that they're going to cut this. They're going to cut that. Well, I mean, that totals up to just these two. In itself. We're looking at uh, what is that? Uh, three, almost three, three, little over 3 trillion, 3.2 trillion. Well, what we have in revenue coming in covers that, no problem. What we're looking at here is our defense and war. Do we need to be spending that much each year? I don't know. I don't know. I mean yes, no, maybe. So there's a lot of bad guys out there, guys, and I'm okay with that if we are safe, right, I feel safe, no problem. Yep.
Speaker 4:So the last piece is this interest on debt yet again.
Speaker 5:That's crazy yeah.
Speaker 4:Yeah, is this interest on debt yet again? That's crazy.
Speaker 6:If you weren't looking into, though that was a very valid point, Mark, as long as you're safe, how much money of that is sent elsewhere, which is the question you should be asking? I bet it is. More than half of that is sent elsewhere. Oh yeah.
Speaker 5:Absolutely, oh for sure, absolutely. But the mere fact that we're, I don't know, six months away, maybe, from actually spending more on debt service than what we spend on our military, that's nuts.
Speaker 4:That's insane. In addition, this debt is basically stuff that we are buying, and at higher rates, because we need the revenue to inflate the dollar in itself. Am I right there?
Speaker 5:Yeah, no, no, no, you're absolutely right. We're devaluing the dollar in itself. Am I right there? Yeah, no, no, no, you're absolutely right, we're devaluing the dollar.
Speaker 4:There you go yeah.
Speaker 5:Right. And that's causing rates to go up because, again to Andy's point, you still need people to buy your debt and the only way you're going to do that is if I'm going to get a decent rate of return. That's right.
Speaker 4:That's right so it's doing it for free. Nobody's doing it as a favor amount at a large interest rate and then, when the decision comes that we need more boom, it jumps up again.
Speaker 5:And the Fed should be probably a 90% chance now that the Fed will cut rates. I mean, they're not going to cut them tomorrow, but I think in September there's a 90% chance that they'll cut rates, which you'll see. The clock slow, but not stop.
Speaker 4:No correct.
Speaker 5:And you really just need to get. I mean, I believe that.
Speaker 4:Let's pause and talk about that for a moment. Yeah, because we've got three gentlemen that follow not only politics but the economy and things of that nature. How true do you think that September prediction is? Because they've said it many times before and it didn't happen. I've got my beliefs. Matter of fact, I'll go first. I believe that there will not be a rate cut until after the election, simply because you've got one party that if rates are cut, essentially inflation will go up. It will look bad on the party and it will instantly be a negative view to the public, because we feel inflation quickly as consumers and if they are keeping them higher or not moved, it essentially compresses that inflation, thus faking the consumer into thinking that the economy is doing fine. Our inflation is steady, we've got it under control.
Speaker 5:Now you just need to elect us so that we can continue moving this forward, type concept that's just my thoughts.
Speaker 6:Might have a tin hat on, but what are y'all's thoughts? Go for it, andy. Well, I've had plenty of opinions on this over time. I watch all the Fed meetings. I'm a super nerd. I listen to all the Jerome Powell's, you know Fed conferences and Q&As afterwards and I can tell you this much I do track it every time. He, you know, they talk about a prediction of oh, I think you know at the end of last year they were saying we may start reducing rates by September of 2024. And then in an earlier in the year meeting that moved up. It was going to be sooner than later. Then it moved back. I don't. I think managing the Ponzi scheme is a hard job. You know what I mean. It's very complicated. I think it comes with you being very good at manipulation and smoke and mirrors and I don't think it matters anymore one word that's spoken. I don't know that there is any way to predict it. That guess you have is as good as any I would make. I really don't know.
Speaker 4:How about you, John?
Speaker 5:See, I'm on the other side of the camp and I will put my. You know, I'll wear my tinfoil conspiracy hat with pride and I'll say this right Weathermen and economists also are the only two that could you know be wrong and keep their jobs, yeah, but, but I I do believe that that they will cut rates by a quarter point.
Speaker 5:Okay, the Fed has kept, you know, a very tight monetary policy I mean that's higher for longer. It's been going on for a long time. There they are. The data is showing that inflation is slowing. We're not seeing deflation, but it's slowing, slowing. We're not seeing deflation, but it's slowing. Even the job openings report that even came out today was a little hotter than anticipated, but it was very slightly hotter, right, and so there's not as much job hirings that are going on.
Speaker 4:Well, what I'm seeing and I don't want to break it, but I think it calls for it A lot of the data that we're seeing includes folks that have two and three jobs.
Speaker 5:Yes, it does.
Speaker 4:And that's where it's kind of a skewed figure.
Speaker 5:We created a million part-time jobs. Well, they say a million jobs. They leave the part-time out, right? No, people get second and third jobs to pay the bills.
Speaker 6:You're right, it's manipulated, very similar to that jobs data you pointed at earlier, something that a lot of people don't realize when inflation first started to go up and it went to whatever, it went up to 7% or 8% or 9%, I don't know, and we had to start cutting rates and it happened at a historical, or raising rates at a historical rate to offset this inflation. And then now we're getting the news stories oh, that it's better, it went down to 5. That it's better, it went down to four. That's a year-over-year comparison, right, correct.
Speaker 5:It's going up, correct.
Speaker 6:People use the language and the media uses the language that inflation is coming down. This is a year-over-year comparison. So if last year it's 7% and now it's only 4% more than it was last year, we're at, you know whatever 10% above what we were two years ago. And nobody ever explains it to the public that way, and that's. They don't ever, but that's the reality of it.
Speaker 5:And see and that's where my tinfoil conspiracy hat thinks believes that they will cut because this administration also needs a victory lap. Yeah, they want to be able to say what we've done.
Speaker 4:We've done this for you absolutely, and I don't disagree with that at all. Um, but I do think that that will be a last ditch effort and probably september makes sense.
Speaker 5:Yeah, if that is the case yeah, and, and, and and and mortgage rates. Right over the course of last month we've seen them improve a little bit and I believe that's because the market is already kind of pricing in this idea, right speculation absolutely that's what that is.
Speaker 4:And for you guys listening the idea behind when the Fed cuts rates, chances are, more times than not, the mortgage lenders that you get your loans from have already cut their rates in anticipation of that. It's very typical for the announcement to come out that they say, nope, we're not going to be cutting rates, and all of a sudden your mortgage rates then start to trickle up because we made anticipating moves, thinking that it was going to come down, et cetera.
Speaker 6:It's called the Fed funds rate and it's a benchmark rate. It just sets the market. The free market is going to come down, et cetera. It's called the Fed funds rate and it's a benchmark rate.
Speaker 4:It just sets the market.
Speaker 6:The free market is going to make an adjustment. You know what I mean. And the Fed is very rarely going to actually borrow the money because there's so much competition to step in and do so. That's right, you know what I mean and they'll price accordingly.
Speaker 4:The Fed essentially lends the money to the institutions that are getting that money to lend to the consumer, correct? So I mean that in itself. And, andy JC, if you can throw that reference up just briefly, we've got right here. It was May of 22 that we reached 9% inflation. This was at the end of the pandemic. In my opinion, living in Texas, this is after the pandemic was over already.
Speaker 5:But think about that. We heard for a year that this inflation was quote-unquote, transitory, transitory yeah, yeah, yeah, it's just yeah inflation's going away.
Speaker 4:Don't, don't, don't look over here yeah, and you also hear that, uh, this side inherited inflation at x amount, etc. It's just using data and stats to make your own opinion. So, as of May of 24, we're back down to 3.3%, but I think this has already gone up, if I'm not mistaken. Obviously, inflation in itself contains some things that should be used to calculate that figure, but there are also other things, not in that figure, that should be used to calculate that inflation that most people do feel in their daily lives, but that's a different conversation. Home prices.
Speaker 5:There you go. Look on the debt clock here. A median new home in 2000 was 165 000. Today it's 408.
Speaker 4:According to that uh, where are you looking?
Speaker 5:right there in the middle, go up to the right, to the right, down in the green, to the left, to the left, to the left, to the left. There you go, boom, right, there you go. So yeah, I mean, wow, wow, I mean, that's Wow, I mean, that's 24 years, right, I mean. And that that, I believe, also shows why it's so important that, man, if you could manage your own personal debt service on a mortgage, you need to be buying a house versus renting for sure, because you know we do. I mean, at the end of the day, america does have the best mortgage product on the planet, right, it is the ultimate hedge against inflation. There's a 30-year fixed rate.
Speaker 6:That's right.
Speaker 5:So I mean, like, if you get in today and rates are, you know, six and a half to seven and a half I'm just using that as a ballpark figure, I'm not quoting anything, right but that's fixed for 30 years and if rates do drop down low enough, then you have an opportunity to refinance and take advantage of that. But it will never go up, right? So you know? I mean, think of all the people that you know again are stuck sitting on a two and a half percent mortgage with seven percent inflation everywhere else. Yeah, they're hanging in there, that's right. They're doing all right, that's right.
Speaker 6:So it's, and you know it comes to mind when you're looking at this insanity. You have a physical asset too. They can't get caught up in the you know. If you know the Ponzi Z breaks down, you've got a physical asset that's not impacted by that Right.
Speaker 5:I mean, you know, and if inflation has hit my household enough and I have to stop contributing my 401k, at least there's still savings.
Speaker 4:Absolutely yeah. I have to stop contributing my 401k. At least there's still savings. Absolutely yeah. I think the only fear in that is if it were to be such a breakdown that there is no way to extract the equity out of the property in itself. What would that be? I mean the collapse of the dollar, maybe. I mean, what do we gauge? Now we can put the tinfoil hats back on.
Speaker 5:Well, I mean, look at your brick buddies.
Speaker 6:Yeah, yeah, there you go Something. I had taken some notes on.
Speaker 4:Can you take us through that? We're going to go down for the last 15 minutes here. Yeah, we're going to go down conspiracy island, and I don't even think it's a conspiracy, but matter of fact, let's just do this. What does the acronym uh b r I c?
Speaker 6:s? I c s brazil, russia, india, china and south africa, and what?
Speaker 4:Is it? Let's see, boom, there it is. So, if I make this bigger, this is a concept that I did not know about, was not privy to, until Andy brought it up to me, and then I started doing some research and it was almost one of those aha, epiphany moments of clarity in what's going on essentially. Andy, if you could explain to us what this is.
Speaker 6:So I've looked into it a little bit. Brics is an organization that was started by other countries. The ones mentioned, the five mentioned there are the initial countries. There's since been five or six ad that are added on. You can look those up publicly. And then there's the hardest thing about the world nowadays is getting real information. There is somewhere I've heard numbers as low as 40, and I've heard numbers as high as 120 countries that have applied and are trying to enter the program. It started in 2009 by other countries.
Speaker 6:After our 2008 financial crisis, a lot of these countries became very concerned with our finances as a country. You see what the debt's doing. They underestimated our bailout game. You know what I mean. We'll just pay it all off and add to the debt and keep it going. And while they were actually concerned that we were maybe dealing in the real world, they started another alternative to buy commodities with and to trade, because right now, the petrodollar, or previously the petrodollar agreement with Saudi Arabia, is the only way you could buy oil and commodities from OPEC and Saudi Arabia and countries like that. So they started working on their own system to be able to buy large commodities with without being dependent on the dollar.
Speaker 5:They're like the mean girls they're jealous of the US Correct.
Speaker 6:And then we just, you know, we threw it in the Ponzi scheme. We bailed everything out and that whole concept got tabled. We threw it in the Ponzi scheme, we bailed everything out and that whole concept got tabled. Well, it was reignited recently vigorously when Russia invaded Ukraine. The United States put multiple—if you haven't read the sanctions that we have as a country and the West has as a country on Russia, you should do that just to educate yourself.
Speaker 6:Some of them are extremely intrusive, to the point where somebody in another country you know just takes it away does any kind of you know exchange with anybody Russian, we have the right to seize everything they own, you know, and we seized, just like every other country. Because of the petrodollar agreement, russia had three hundred and something billion dollars in US bonds and treasury notes and we seized all that. And not only did we seize all that, we convinced our counterparts, our minions in Europe, to do the same thing. So anybody that owned European bonds for diversification or whatnot from Russia, that money got seized as well. Well, they went back to the draw.
Speaker 4:I want to make sure that this is clear, what you just mentioned. So, essentially, the US said hey, is that your money? Great, it's now our money.
Speaker 6:But we called it a sanction.
Speaker 3:But yes, I mean we had a term for it, we're going to.
Speaker 6:I just wanted to put it, we are going to sanction this money because we don't agree with you know how you're handling this situation with Ukraine, and that's, and whether that's right or wrong is not the fact here. The point is that they have since worked with these other countries to reignite this BRICS idea, kind of under the premise of you know, hey, if you're on the wrong side, if you're on the wrong side of a disagreement with the United States, they just might, you know, seize all your shit. You know what I mean and nobody wants to deal with that. When you're talking about billions of dollars, and now that it has actively happened, other countries are seeing that, and I think that's why you see a huge pullback in our bond market. And why would you want to have that much money tied up in US bonds? If there is a chance you're not going to get paid back because you have some kind of bona fide disagreement. Yeah, there's the numbers of who owns those bonds.
Speaker 4:Throw those up there. Jc reference real quick. There's the numbers of who owns those bonds. Throw those up there, jc.
Speaker 6:Reference real quick while he's talking. Brics has now gotten, like I said, to where they are actively buying and selling commodities. They've figured out an exchange where, if you're in India and you want to buy a commodity, you can use your rupees to buy that commodity from Saudi Arabia and they'll exchange it, or OPEC typically.
Speaker 4:Whereas before you had to exchange it to the US dollar. Then purchase.
Speaker 6:Before you had to use US. It was the only thing. So there was a petrodollar agreement that went into place. Oh gosh, it was 1973. Henry Kissinger, the secretary of state at the time, was sent by the president, richard Nixon, and met with King Faisal of Saudi Arabia off the coast of you know, on an aircraft carrier, and they came up with this deal. I sent you the picture that they came up with it. They came up with this agreement that the United States and this was shortly after the United States went off the gold standard for what they tell you and ultimately, we agreed to provide protection to Saudi Arabia.
Speaker 6:Do you wonder why we have military bases scattered around the desert we don't use? That's why we agreed to protect them militarily in exchange for them, requiring all countries that buy oil commodities from OPEC have to use the US dollar. Well, that's huge for us. Every country has to have liquid US dollars, and billions of them. Correct? That's why our bond markets thrived for so many years. And that was a 50-year agreement that some people think expired on June 9th of 2020, from back in 74. You can't find real data on that here. You can find news articles from other countries that insinuate that. Yes, that is the case. We have not shared that here publicly. No, no. And as a matter of fact, I showed you that, yeah, I hate the term when people say I'm going to Google it, I'm going to Google that shit. I'm just like, oh man, I don't want to say you're not that intelligent, but you don't know how it works. If you knew how it works, you would not do that. And there's a big difference.
Speaker 4:I always say if you Google something, you're going to find exactly what you're looking for.
Speaker 5:Wrong, or right, or what Google wants you to find.
Speaker 6:They're going to tell you what they want you to see. Once you know how it works and you understand it, I use it all the time for the sole purpose of I want to see what they are showing everybody else. You know what I mean. That's really the only reason that information is valuable to me. But I know it's not real and there's a good example with this topic here. I showed you that you Google the agreement. You know. You can see there's newspaper articles about it. You can see the pictures of them on the aircraft carrier marking out this deal, how great it was. I've actually read the document. There's plenty of information out there where you can read info on this deal. And then, if you Google, did it go away and was it not extended in this year? You get a pop-up that says there was never an agreement. What are?
Speaker 6:you talking about there was no such thing you know too much. It's all pretend, yeah, they're over here. There was never an agreement about a petrodollar. So very odd, right I mean it, that maybe having all your eggs in this basket isn't so smart if they're willing to seize all that money if the circumstances come along, that you find yourself on opposite ends of some type of conflict and many, many countries are looking for alternatives to that system.
Speaker 4:I think many Americans are also trying to find different solutions like crypto. But at the same time, if crypto is becoming regulated, is it really an alternative method at the end of the day?
Speaker 5:Well, I was just going to say. The only thing I would add about the BRICS too, is that a lot of those countries too, they're not exactly our friends either. No, no, between China and Russia there is absolutely you know, it is a form of warfare, that's right. Economic warfare. And because they want to weaken the dollar. Yes, which drives up inflation here Now.
Speaker 4:is it weakening the dollar, or is it putting it on a stage to show that it is not as strong as they're representing it to be?
Speaker 5:by doing so, Does that make sense? Yeah, it does, but I guess overall technically if you look at this bad boy.
Speaker 4:Right here we've got six hundred and twenty nine trillion dollars that we'll never pay back.
Speaker 5:I guess you could equate it to a home price, right? What is a home price? It's whatever somebody is willing to pay for it, that's right. So, yes, it does weaken the dollar in that, you know, by putting it on the stage, perhaps that, oh man, okay, well, america's got their problems. But at the same time, too, these other countries, I mean, yeah, we have inflation issues. There's no doubt. I mean, yeah, we have inflation issues. There's no doubt A lot of these other countries, though, they have like, hyperinflation and whatnot. So they're in well off, worse shape than we are. You know, I mean, it was, you know, just 30 years ago. I mean, russia had bread lines for crying out loud, right. China had famine, right. So, but, but, but, but, these guys, they're not exactly our friends. It is a form of warfare, and, but these guys, they're not exactly our friends.
Speaker 5:It is a form of warfare and they are trying to weaken the US leadership and dominance in the world. So that is something absolutely that we need to continue to be aware of. And you know, I don't know what the answer to that is. You know those countries and BRICS. They're not strong enough to challenge the dollar by themselves. They're having to do it as a group.
Speaker 4:That makes sense, that does make sense.
Speaker 5:But we need well, that's a good picture, oh Lord Jesus but we do need a stronger dollar.
Speaker 5:This is why we got to get our spending under control, because if we do have a stronger dollar, then costs do go down, right.
Speaker 5:We're not having to pay more dollars for goods that we're importing which then ultimately get passed on to the consumer, right, it brings everything down. This is why I go back to you know, and quite frankly, I don't believe that it was because of his genius, but during Trump's term, we did have some of the lowest oil prices, I mean, for economic reasons, in history, and what it did was it lowered the cost to move goods everywhere, right, and overall lowered the cost of goods, and so that's why you had extremely low inflation, coupled with a sustained period of low interest rates. I mean, I'm even going back before COVID. I mean we still had a you know, almost a zero interest rate policy, right, and low inflation, so you could see that it is sustainable and it can work. I mean, all those loans we were doing in 2018, you know, 2017, those were 4%, 30 year fixed rate mortgages, absolutely, and we didn't have hyperinflation in home prices.
Speaker 4:Not at all. I thought we had a pretty healthy market.
Speaker 5:It was healthy right Five 6% per year. Mm-hmm. Not Steady growth, 30% in one year. Yeah, that's unstable. So this is why we've got to get you know coming full circle. You got to get that under control so you can have a stronger dollar, so you could continue to push back challenges to our currency Correct, and then this way the consumer is actually able to get into something that they can afford.
Speaker 4:Yeah.
Speaker 5:Which, if the consumer is able to get in something and afford, they can build net wealth. So that way, when they pass away 30 years from now, there's an asset that they're leaving to their heirs, that's right, that's right.
Speaker 4:Right, that's right. So I was putting together the totals of just those top five that own, that have, united States debt. We owe them money. It only totals up to about 3.2 trillion, so what that tells me is the remainder of all that debt we own ourselves.
Speaker 6:Yeah, we own a lot of it ourselves, right, that is correct. So it's just this big old.
Speaker 4:Fugazi.
Speaker 6:Yeah, right.
Speaker 4:Right, right, yeah. So to close this thing out, because we're probably at the hour mark, yeah 15 seconds away from it.
Speaker 5:Alright good time Perfect.
Speaker 4:And this is a crazy question. You guys can answer however you'd like. If, at a certain point, there is a continued revolution of countries doing what BRICS is doing, doing things that undermine the US, based on the fact in my opinion, on fear that we will not attack because of our military Obviously, how much we spend each year on that let's say that fear goes away and they decide to continue to do this. Let's say crypto does do what they're intending to do, or they find another source. How do you prepare for that? Or what does that mean for the US and the dollar? Because we can all see transparently that it is propped up on paper. Yeah, we, somebody like I think one of you mentioned it before If we were in, personally, in the same situation as what we're seeing here, we would not be allowed to do what we do.
Speaker 6:This is like me owing you $10 billion. Hey, Mark, hey, can I get another $2 million? I can put something on it. I'll put it on the list.
Speaker 5:What's that line? If you owe a million dollars, it's your problem. If you owe $100 million, it's the bank's problem.
Speaker 6:Yeah, it's not my problem anymore, because it's never going to happen.
Speaker 4:So if that were to come to pass, I mean, what does that mean? What would I think? Odd question, but go for it.
Speaker 6:I think it's significant and I think it's worth tracking and I think you probably will this BRICS thing Now you mentioned cryptocurrency, what they're working on actively and you can monitor this. You have to understand you can't do it from here. You need to be on Twitter or X and all my everything I track are embassies and officials of other countries and that's really the only way to get good information. But they are actively working to create a cryptocurrency platform that they will own. That'll be a BRICS cryptocurrency. So all these different currencies can buy the cryptocurrency from. You know dinar, rubles, rupees, whatever it is you want. They can buy that cryptocurrency and then they use that to buy the commodities. So this thing is growing very quickly on a very high level. What it means for us?
Speaker 6:I've thought about that a lot and I don't know. You know, 60 percent of American dollars are not in the country. 60 percent of our, of our float is outside of the United States, much of it being used by other countries for all these various things. If that goes down and half of that money comes back here, what does that mean? I don't know. I mean I really don't. I know it's not good. I know that much. If us three ended up on an island and we wanted to be able to exchange. You raised animals and you caught fish and I hunted and we wanted to be able to exchange stuff, and so we came up with some tokens to trade, you know what I mean, so we can make change.
Speaker 6:Yeah yeah, your fish is not as worth as much as your animals, so we've got something to hedge the value. That would be pretty standard. That's how barter and currency works. But you can't just come in and say, well, this is cool, why don't I give, why don't we all get an extra 2000,000 coins? You know what I mean? We can buy more stuff. It wouldn't work that way, right? And that's exactly what's happened here, I think. Or is what is happening here, as some of that money comes back home, how it's going to work. I don't know. We're really good at, you know, just adding it into the red numbers here and moving on down the road. That's true. So I assume that's what's going to happen, you know, but I don't think it's good. Yeah, right.
Speaker 5:Well, you know two things there, and I would say, with regards to the red numbers, I mean, yeah, you've got to stop spending and also finding alternative ways to bring revenue in, right, I mean, as managing profit loss statements. I mean you could only cut back however many staples you need to buy, that's right. You still need to get revenue in the door there. Now the other thing, too, with the crypto stuff. I'm not 100 convinced on it just yet. I mean it was, it was what. Less than 15 years ago, some dude bought a pizza for 10 000 bitcoin, right? I mean, so what's backing it?
Speaker 4:um, and and if there is a significant it, would, I think, essentially be the faith of the people, which is the same concept that's backing the dollar and our faith in that dollar. Yeah, because what happens one day when you go to the store to pay for your groceries and they say, I'm sorry, we're not taking that?
Speaker 6:We're not taking that anymore, yeah.
Speaker 5:You know well. And the other thing too, right, I mean I was at a, I think, 7-eleven or Circle K, a gas station, and there's now a Bitcoin vending machine. So I, I, I, just I get very suspect when it's like the dumb money is coming in. Somebody has Bitcoin now that they're selling, yeah. Now you've got all this hype out there and the dumb money the quote unquote dumb money is coming in and now you get a Bitcoin vending machine, yeah, and I get suspect. You know you get back into the tulip thing from from, from Holland, so I'm not a hundred percent convinced on it. What's backing crypto? I mean, it is the faith of the people. But if people lose faith, I mean it's not like they're shiny gold right.
Speaker 5:There's not oil. That's backed it. Backing it so. So what is backing it, other than some countries that hate the United States?
Speaker 4:And, honestly, you have to use US dollars to purchase that Bitcoin anyway.
Speaker 5:Right.
Speaker 6:So no, but you had a good, really good point about what backs it. Well, what backs the US dollar? I mentioned that earlier. You know we got off the gold standard. Everything you read says you know 1973. You know we got off the gold standard. Somewhere right around there we got off the gold standard, and maybe that's true to an extent. But in April 20th of 1933, fdr signed an executive order that said if you want to collect your US debt, we will no longer pay it in gold. Up until that point, you could say I want some of the gold or I want US dollars. Well, as of 1933, you could no longer collect the gold. So to me that's kind of the same thing, right? I mean, you can't. Actually, from 1933 to 1971, we said well, we won't give you the gold, but trust us, it's in this big fort, it's all there in Kentucky, it's right there, you're good to go. And then at some point, all those years, 40, whatever years later, we said, oh, never mind, we're just not going to don't worry about it anymore.
Speaker 4:Would it be a little nutso if the whole time the idea was the money is in the vault, secured, et cetera? Fast forward, you open the door. There's nothing there.
Speaker 6:I don't know it's all a fugazi. In 1970, gold was worth $35 an ounce. Now it's $2,500 an ounce. You know what I mean, Jason.
Speaker 4:If you want to throw that reference?
Speaker 6:up, it's right there. I mean since 73, like you said, yeah, yeah, there was $35 an ounce in 1973. Yep, and we go off the gold standard and it rips like that. That's weird, that's so weird. Yeah, I know a lot, but I know when something's really weird, right, yeah, that's really weird yeah.
Speaker 4:Well, gentlemen, this has been a great conversation. A lot of doors have been opened, and I don't think that there was intention of solving the world's problems here.
Speaker 5:No, but people need to be thinking about it Absolutely, especially if they have kids, should be looking at it, should be understanding.
Speaker 6:It Should be trying to yeah, trying to learn. I hope everybody is trying to make an effort to learn how to gather real information. You know what I mean. What steps need to be done? What do you need to look at to get real information? Because if you're looking at news articles and making decisions, you are being manipulated on a level that you cannot understand.
Speaker 4:You know what I mean, that's right, absolutely. And a lot of things tend to fall on the feelings versus fact. Um, and for those listening, watching um, utilize the us debt calculator clockorg and you will see plenty of additional statistics, like your mortgage loan calculators, home sales, auto sales, energy output, gold prices, all of the things in addition to it's a really cool website.
Speaker 4:It really is and utilize this website if you're making any kind of points or decisions on the future, because the data is here. It's not like this figure all of a sudden increases substantially. It is pretty accurate. Now, is it exact play by play? It is not there's. I don't think any way to actually do that. But yeah, there's just so much here that each one of these is a topic of discussion.
Speaker 6:Yeah, Another good topic to go down in the future, mark, is you see how that? Currency and credit derivatives. You know Warren Buffett has been screaming this for 10 years that the derivatives market is going to blow everything up. You could do a whole podcast on this, but once upon a time you had all those rich people that own stock. Once upon a time you've got one stock and it was a paper certificate and somebody owned it. Well, now the brokerage house keeps it and off that one stock. They've got people shorting it. They've got people buying options on it. That's right.
Speaker 6:Falls and puts, falls and puts, and we're talking thousands of them that go out on chains, for some that expire tomorrow, some expire next week, some expire next month, next year, and it never ends. Well, warren Buffett has the best question of all. So let's break it down to one piece of paper and one person that owns a stock. And if we get a statistical anomaly event outside of any normal standard deviation, you know what I mean that happens up or down. Standard deviation. You know what I mean. That happens up or down who owns it?
Speaker 4:You know what I mean. Who owns that? You know what I mean. You're saying that if you are a company owned by BlackRock and you make a hedge or a bet to essentially bet that Donald Trump media is going to crash the day before the assassination attempt, and you're incorrect. You can't just say that it was an error. Right, it's just an error. You think about that.
Speaker 6:Yeah, yeah, yeah, yeah, right, yeah. Yeah, I just stumbled into some put we changed our mind. We changed our mind. Now I don't want them anymore, that's right. They don't let me do that when I make bad breeds. You know what I mean. Yeah, but I wish, but you know, yeah, that's quite interesting and should be looked into. Go for it.
Speaker 5:I was just going to say. You know, and for folks watching the show, you know, if you're currently renting, just remember this the median net worth in this country is roughly $400,000 for homeowners, correct and for renters it's $10,000. Yeah, that's so different. We've got to find a way to get you into a house so that way you can start saving and building long-term, responsible, long-term generational wealth. And according to the Texas A&M Research Center real estate center, the median net worth or median sales price in San Antonio is 300, or in Texas, I should say, is 340,000. So if you're just doing an FHA loan, you need almost $12,000 for down payment. There's lots of down payment assistance programs out there that will help you there. You don't have to worry about being low income or even being a first time buyer for that matter. There's great programs to get you in a house today.
Speaker 5:So take advantage of them and check out, I think mortgage or what is it? Reviewortgagecom.
Speaker 4:Or you can go to H&M no big deal, there you go. So, guys, gals listening, we will be coming back next week with a couple of different other folks to be talking about this same topic, but yet there will be different rabbit holes that we will definitely go down. I want to thank John and Andy for joining me today. This was not an easy topic, Um. It kind of puts you out in the open, um, uh exposed, so to speak, with not only how much you know, um, but also, uh, how little others know essentially.
Speaker 4:And that is a very um, I don't know. It's a very uh thing to come to terms with when you realize it and the numbers start turning into a story.
Speaker 6:Yeah.
Speaker 4:You know it paints a picture. That being the case, guys, again thank you so much for joining me Great discussion and you guys out there, if you get something out of this, make sure to like, subscribe, share with a friend. We are continuing to grow our audience. We're now, I think, at over 7, 7,500 subscribers something like that and growing. So apparently we're putting the sexy into mortgage, because it was never there. Guys, we will catch you on the next one.
Speaker 6:Thank you, Mark Adios.
Speaker 1:Someone has already done and is already doing what you want to do. And no, they didn't fall into a rich family to do so. They were not born lucky. You know you can be more, you can have more, do more, can be more. You know this. You wouldn't be listening otherwise.
