Fed drops a BOMB … but will it work?

You probably heard the Fed just dropped their interest rate target 50 basis points … which is economic geek speak for half a percent.

If you’re a devoted market observer, you’ve probably seen a dozen reports with as many interpretations about why they did it and what it means to everyone … except YOU.

That’s because mainstream financial media doesn’t talk to real estate investors. In fact, they barely acknowledge we exist …

… and they surely have NO idea how we think or what we really do.

They just look at investing through their “buy low, sell high” paradigm …

… and are therefore understandably obsessed with trying to divine which direction the next bloviation from the Eccles building will send the paper trading lemmings scurrying.

To Wall Street, “investing” is sprinting in and out of positions faster than the crowd. Miss a step and you get trampled.

And MOST of what they think and say means NOTHING to Main Street real estate investors.

Meanwhile, issues critical to real estate investors (and syndicators) go completely ignored … leaving you to read between the lines for clues in the news.

Not to worry! Your friendly neighborhood compulsive-obsessive newshounds here at The Real Estate Guys™ radio show are here to fill the gap.

So … what’s a real estate investor to think … and do … in the wake of this latest extraordinary tactic by a clearly concerned Federal Reserve?

Let’s break the topic into bite size pieces …

First, the CONTEXT …

This is the Fed’s first “emergency” action …

(at least in terms of a big, unscheduled rate cut … pay no attention to the billions in “not QE” printed to plug the ongoing problems in the repo market)

… since October 2008.

Hmmm … that date seems oddly familiar … didn’t something big happen back then?

And if the economy is really as strong as everyone claims, WHY is this “shock and awe” unscheduled cut needed?

We’re being told this is in response to the Coronavirus threat to the economy. Some say the Fed’s move validates the fears of a global pandemic.

Weird. Weren’t all the recent press conferences designed to calm such fears?

But there’s a MUCH bigger question to consider …

If the threat of a pandemic has closed factories and broken supply chains, how does printing more money fix that?

Hint: It doesn’t. But it does create some other side effects investors … real estate and otherwise … probably want to pay attention to (more on that in a moment).

We think there are a couple of issues at play …

First, as we’ve been saying for the last few years, there’s an important difference between economic activity (the speed of the vehicle) and the financial system it runs on (the vehicle itself).

If your car is zipping down the road to riches at 75 miles per hour, you’re feeling like you’re making great progress.

But if you don’t notice the oil pressure dropping and engine temperature rising, you won’t know the vehicle is breaking down … and your trip is in jeopardy.

Make sense?

Gold, oil, the dollar, and interest rates are all important gauges on the financial system dashboard …

… right alongside the speedometer and tachometers of employment and GDP, which measure the speed of the economy.

We think there’s a possibility the Fed is injecting liquidity trying to lubricate an engine that’s on the brink of breaking down.

Remember, the repo market crisis all happened BEFORE the coronavirus showed up.

The second major issue helping put the Fed’s latest move in context is a variation on the same theme … interest rates.

But not the “let’s lower interest rates to stimulate this already red-hot economy” use of interest rates.

More like the “let’s put a bid on bonds to prop up fragile credit markets” kind of interest rates … the “black hole event horizon” kind (which is a much bigger discussion we’ve had before).

For today’s discussion, here’s what you need to know …

The Fed doesn’t “set” interest rates. They simply set a target at which to aim their “open market operations”.

This is a confusing way of saying the Fed will buy or sell bonds in the open market in order to manipulate interest rates up or down.

When the Fed sells, it adds to supply, driving bond prices down and interest rates up. That’s clearly NOT the plan right now.

So the flip side is the Fed plans to BUY bonds, bidding UP the prices, and driving interest rates DOWN.

Here’s the important point …

Bond traders KNOW this. And they also know the Fed will pay ANY price to make it happen.

Rising interest rates would be like SAND (or worse) in the financial system’s engine … triggering a wave of defaults, margin calls, and a liquidity crisis of biblical proportions. It would make 2008 look like a bad hair day.

So what do bond traders do? (And yes, you should care …)

Bond traders FRONT-RUN the Fed and PILE into Treasuries, bidding them up, driving interest rates DOWN … to ALL-TIME lows.

Yes, we realize many headlines claim “scared” investors are fleeing the “dangers” of the stock market to the “safety” of bonds.

Maybe … but we think not.

Our guess is it’s not fear, but greed driving the flurry of Treasury bond buying.

Meanwhile, let’s now quickly consider the potential ramifications for Main Street real estate investors 

The most obvious is what we discussed last time … low interest rates create a big opportunity to restructure debt and acquire new cheap debt.

We also think TRUE safety-seekers will start migrating into real assets … like precious metalsoil, and real estate.

Of course, we’ve been talking about this for years. But these macro trends roll out slowly, so we’re pretty sure there’s a lot of room to get on the long-term trend train.

And while we could (and probably should) discuss what the rise of precious metals and oil say about the dollar, we’ll probably save all that for the Summit … when he have all big brains with us.

The more germane discussion for real estate investors is the effect of low interest rates on income producing real estate.

Three words: Shrinking. Cap. Rates.

As Treasury yields fall, they pull down the yields on ALL investments, including rental properties.

Of course, as any seasoned real estate investor knows, falling cap rates mean RISING prices … and EQUITY for those who acquire real estate at the front end of the cycle.

As insane as it seems, this move by the Fed suggests the bull market in cash-flowing real estate might actually be getting a booster shot.

But BE CAREFUL … because it’s easy to get sloppy with underwriting and market selection when things get hotter and even more competitive.

Always remember, unlike stocks and bonds, people still need real jobs to make income properties perform. It’s hard for unemployed tenants to pay rent.

While admitting we’re far from experts on the matter, our guess is the coronavirus crisis will come and go like the many others before it.

So the real lasting impact may not be (hopefully) loss of large numbers of human lives … or even major disruptions to America’s economy or individual lifestyle and freedoms.

But it may wake America up to the vulnerability created by an over-dependence on Chinese manufacturing …

… and a renewed enthusiasm to bring more manufacturing back to the United States.

These are the kind of durable jobs with the potential to drive a sustainable surge in demand for real estate of all kinds.

Smart investors will be watching to see if and where these jobs end up … and will jump in to ride the wave as those markets revitalize.

Yes, these are troubling times. But they’re also full of lessons and opportunities.

The odds are good that the world will not just survive, but thrive, despite the consistent parade of threats and temporary turmoil.

Real estate investing is a long-term game played best by watching the long-term trends … and letting real estate do for you what it does best …

… providing investors with a way to profit from the long-term decline of the dollar while staying mostly insulated from the wild volatility of the Wall Street casinos.

New Orleans Investment Conference – Money, Metals, and More!

We’re coming at you with interviews recorded live at the 2019 New Orleans Investment Conference!

We’re sitting down with a remarkable lineup of economic and investment experts … from precious metals to the Fed and beyond!

Listen in for valuable perspectives into the economy, the job market, interest rates … and more!

As always, we offer information … not advice. Always run your ideas by a qualified professional. We’re here to provide commentary, education, training, and resources to help investors like YOU find success. 

In this episode of The Real Estate Guys™ show, hear from:

  • Your invested host, Robert Helms
  • Money manager, Peter Schiff 
  • Former Fed official, Danielle DiMartino-Booth
  • Billionaire and CEO of Sprott US Holdings Inc., Rick Rule
  • Renowned economist, Mark Skousen
  • Gold expert, Brien Lundin

Listen


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What’s going on with gold

As much as we love real estate, we also keep our eyes on other economic metrics. 

For this episode, we’re in New Orleans at the 45th annual New Orleans Investment Conference … and we have a lot of great guests for you. 

We’re talking gold mining, the Fed, the economy … and more!

Russ was unable to make it to the event this year … but money manager Peter Schiff is filling in. 

“This conference started in the ’70s. Because of inflation, people started buying gold. The same thing is happening today, so this conference never goes out of style,” Peter says. 

At its root, this really is a gold conference. So, let’s start with gold. 

People don’t really appreciate the fact that gold has been going up. In the last two decades, gold has increased in value five times over. 

That’s a greater increase than the Dow or the S and P. 

Central banks are creating inflation and printing a lot of money. They are basically saying that they don’t want savers to have a positive return. They want you to lose money on your savings. 

So, what are you going to do? 

For many people, gold is the answer. They hold gold instead of placing money in a traditional savings environment. 

This conference is unique because we have gold buyers but also gold producers in the audience. 

“I think there’s an incredible investment opportunity in gold mining stocks, because this whole sector has been overlooked by Wall Street,” Peter says. 

When the price of gold catches up to where it should be, there’s going to be many mines that come into production and are much more profitable. 

But investing in gold in this way does come with risk. Peter recommends working with an expert who understands this specialized business to ensure you put money behind the right mining company. 

The merits of mining

Rick Rule is a billionaire CEO … but his expertise is in mining. 

Many people think of gold and silver and think of small coins … but there is a lot that happens before mined gold becomes that coin. 

You have to permit and finance the construction of a mine. You have to operate a mine and … when the gold is gone … you have to responsibly close the mine. 

“There’s a lot more losers than winners in this business,” Rick says. “Mineral exploration is really technology, so it’s a similar situation to high tech venture capital. Most ventures fail.”

The point, according to Rick, is don’t try to beat the market too much by taking many risks. 

Instead, participate in the market, and buy into the best companies to avoid making mistakes. 

Rick says that the best way to begin is by owning some physical gold. Then, invest in a company that has growing reserves and revenues rather than companies that are cannibalizing their existing asset base. 

The state of the Federal Reserve

Danielle DiMartino Booth is still “fed up” … she worked at the Fed and then wrote a book about how it is bad for America. 

Needless to say … she offers a unique perspective. 

“I was able to be there at the advent of taking interest rates to the zero bound, of venturing into this grand experiment of blowing up the Fed’s balance sheet,” Danielle says. 

All along the way, Danielle says, there were assurances that this move would be temporary and reduce the size of the balance sheet … but we now know it’s neither of those things. 

In addition to quantitative tightening, currency in circulation around the world has been going up, and that pulls an additional amount of reserves out of the financial system. 

Danielle says that foreign central banks had been parking a lot of money at the Fed, because they have negative interest rates at home … doubling the effect of pulling reserves out of the system. 

The treasury had depleted its checking account … so they had to rebuild the balance. Now we’re running trillion dollar deficits. 

And in a matter of weeks, the Fed has ramped up its own liquidity injection … something Danielle says we would have thought of as unheard of a year ago. 

So, it’s going to be interesting to watch how things play out. 

Diversification in a bull market

Mark Skousen is a renowned economist and the longest standing speaker at the New Orleans Investment Conference. 

Mark is always in touch with the market cycle … and he has some observations of the current economy. 

“This is the longest-running bull market in our history, and this is the most disrespected stock bull market in history,” Mark says. 

Mark also reminds us that diversification is key … and that different assets can perform very differently under the same economic conditions. 

“You have to take what the market gives you. So, you want to be positioned to see a turnaround coming, one way or another, and weather it,” Mark says. 

Protecting your money 

Brien Lundin knows gold … and this conference is his showcase for what resources like precious metals can do for a portfolio. 

“Right now, we are in a confirmed gold and silver bull market. Everything is pointing toward much higher prices,” Brien says. 

Big trends in the economy and geopolitics are pushing for much higher gold prices. Gold and silver are the primary ways that Brien feels people can protect themselves from monetary depreciation. 

“I would urge people to just learn about other investment classes. Ask the tough questions, and find the best way to protect your money,” Brien says. 

To hear more from our interviews at the New Orleans Investment Conference … listen in to our full episode!

More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.


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It might be time to start worrying …

The mother of all private equity firms just issued a warning …

Blackstone Group Warns of the Mother of All Bubbles
Investopedia via Yahoo Finance – 11/11/19

According to the article, Blackstone’s “… biggest concern is negative yields on sovereign debt worth $13 trillion …”.

Remember, the 2008 financial crisis was detonated in bond markets … and the bomb landed hard on Main Street real estate.

So yes, this is something Main Street real estate investors probably want to pay attention to.

In fact, the article says Blackstone “… sees a troubling parallel with the 2008 financial crisis …”

Keep in mind, Blackstone manages over $550 billion (with a B) … which includes over $150 billion of real estate equity in a portfolio of properties worth over $320 billion.

So Blackstone has both the means and the motivation to study these things intensely … and they think about real estate too.

Of course, this doesn’t mean they’re right. But they’re certainly qualified to have an opinion worthy of consideration. And right now, Blackstone is worried.

And they’re not alone …

More than half of the world’s richest investors see a big market drop in 2020, says UBS survey
CNBC – 11/12/19

“Fifty-five percent of more than 3,400 high net worth investors surveyed by UBS expect a significant drop in the markets at some point in 2020.

“… the super-rich have increased their cash holdings to 25% of their average assets ….”

Of course, they’re talking to paper asset investors, but the sentiment applies to the overall investment climate, which also affects real estate.

Also, by “super-rich”, they’re talking about investors with at least $1 million investable. So while that’s nothing to sneeze at, it’s also not the private jet club either.

So from behemoth Blackstone Group to main street millionaires, serious investors are worried right now.

Should YOU be worried too?

Probably. But it’s not what you think …

In fact, according to this article, Blackstone’s CEO Stephen Schwarzman believes worrying is fun 

“In his new memoir What it Takes, the private-equity titan advises readers that worrying ‘is playful, engaging work that requires you never switch it off.’

This approach helped him to protect Blackstone Group investors from the worst of the subprime real estate crisis …”

There are some really GREAT lessons here …

Worrying is something to be embraced, not avoided.

Many people believe investing and wealth will create a worry-free life. Our experience and observation says this is completely untrue.

In fact, to adapt Ben Parker’s famous exhortation to his coming of age nephew Peter Parker in the first Tobey Maguire Spider-Man film …

“With great wealth, comes great responsibility.”

Worrying is the flip side of responsibility. They go hand and hand. If want wealth, you need to learn to live with worry.

Worrying isn’t about being negative or pessimistic.

In Jim Collins’s classic book, Good to Great, he says great businesses (investing is a business) always “confront the brutal facts”.

That’s because you can’t solve a problem you don’t see.

But missing problems isn’t merely a case of oversight or ignorance. Sometimes, it’s bias or denial.

In fact, one of the most dangerous things in investing is “normalcy bias.

This is a mindset which prevents an investor from acknowledging an imminent or impending danger and taking evasive action.

Mega-billionaire real estate investor Sam Zell says one of his secrets to success is his ability to see the downside and still move forward.

Threats often aren’t singular or congruent … they’re discordant.

According to this article …

“CEO Steve Schwarzman of Blackstone searches for ‘discordant notes’, or trends in the economy and the markets that appear to be separate and isolated, but which can combine with devastating results.”

This is the very concept of complexity theory that Jim Rickards explains in his multi-book series from Currency Wars to Aftermath.

The point is that major wealth-threatening events seldom occur in isolation or without a trigger and chain reaction that is often not obvious.

It’s why we think it’s important to pay attention to people and events outside the real estate world.

The more you see the big picture and inter-connectedness of markets, geo-politics, and financial systems, the more likely you are to see a threat developing while there’s time to get in position to avoid loss or capture opportunity.

Cash is king in a crisis.

This might seem obvious, but there’s more to it than meets the eye. After all, cash isn’t king in Venezuela … because their cash is trash.

Americans don’t think of cash apart from the dollar. And their normalcy bias says they don’t need to.

It’s true the dollar is king of the currencies … for now.

Yet as we explained in our Future of Money and Wealth presentation, the dollar has been under attack for some time.

But even as high-net worth investors, the most notable of which is Warren Buffet, build up their cash holdings, it’s a good time to consider not just the why of cash … but the HOW.

The WHY of cash is probably obvious …

When asset bubbles deflate, it takes cash to go bargain hunting.

It’s no fun to be in a market full of quality assets at rock bottom prices … and have no purchasing power.

But the HOW of cash is a MUCH more important discussion … and too big for the tail end of this muse. Perhaps we’ll take it up in a future writing or radio show.

For now, here are something to consider when it comes to cash …

Cash is about liquidity. It’s having something readily available and universally accepted in exchange for any asset, product or service.

So, “cash” may or may not be your local currency.

Even it is, perhaps it’s wise to have a variety of currencies on hand … depending on where you are and where you’d like to buy bargain assets.

It should be obvious, but cash is not credit.

So, if you’re counting on your 800 FICO, your HELOC, and your American Express Black Card for liquidity, you might want to think again.

Broken credit markets are often the cause of a crisis, so you can’t count on credit when prices collapse. You need cash.

Counter-party risk is another important consideration. This is another risk most Americans seldom consider … but should.

That’s because one of the “fixes” to the financial system after 2008 is the bail-in provisions of the Dodd-Frank legislation.

“With a bank bail-in, the bank uses the money of its unsecured creditors, including depositors and bondholders, to restructure their capital so it can stay afloat.”
Investopedia – 6/25/19

Yikes. Most people with money in the bank don’t realize their deposits are unsecured loans to the bank … or that the bank could default on the deposit.

That’s why the recent repo market mini-crisis has so many alert observers concerned. Are banks low on cash?

As we’ve noted before, central banks are the ultimate insiders when it comes to cash … and they’ve been stocking up on gold.

Maybe it’s time to consider keeping some of YOUR liquidity in precious metals.

You can’t win on the sidelines.

Even though serious investors are increasing liquidity in case there’s a big sale, they aren’t hiding full-fetal in a bunker. They’re still invested.

This is where real estate is the superior opportunity.

It’s hard to find bargains in a hot market when your assets are commodities like stocks and bonds. Price discovery is too efficient.

But real estate is highly inefficient … and every property and sub-market is unique. So compared to paper assets, it’s a lot easier to find investable real estate deals … even at the tail end of a long boom.

Of course, if you’re loaded with equity, it’s probably a smart time to harvest some to build up cash reserves. Just stay VERY attentive to cash flow.

What this legendary real estate investor is buying NOW …

Even though most of us will never become billionaires, it’s sure fun trying.

But if we want to have a chance of making it BIG, it’s probably smart to watch and listen to those who’ve actually done it.

After all, as Tony Robbins says, “Success leaves clues.”

To which the Godfather of Real Estate, Bob Helms, adds … “You don’t need to give natural childbirth to a good idea … you can adopt!”

So when multi-billionaire real estate investor Sam Zell has something to say, we pay attention and take notes.

In a recent appearance on Bloomberg News, Zell reveals what he’s doing right now and why.  It’s a short clip, and you can watch it here.

There are some great pearls of wisdom to glean … and if you’ve been followingThe Real Estate Guys™ for a while, some of them will sound familiar.

But that’s not because we’re super smart.  It’s more because we’re well- informed from spending quality time with lots of really smart people.

Sam Zell is buying gold … for the first time in his life.

We think that’s REALLY interesting.

Of course, we’ve been following gold for quite some time … for a lot of reasons.

So while it’s interesting that Zell is buying gold for the very first time in his long and uber-successful investing career … what’s even MORE intriguing is WHY.

In the interview, Zell offers up two reasons.  One is obvious.  The other is more subtle … and leads to some even more subtle lessons.

All this from a guy who wrote a book titled Am I Being Too Subtle?

First, Zell says he’s buying gold because of the supply and demand dynamic.  He overtly states he sees gold supply constrained going forward.

It’s obvious from Zell’s comments that it’s important to understand supply and demand when investing in anything, because …

When supply is low relative to demand, there’s opportunity.

Yes, we realize that’s Investing 101.  But it’s also a GREAT reminder that even at the billionaire level, successful investing is based on basic, timeless concepts.

However, there’s MORE to be gleaned from Zell’s comments about gold …

While he openly explains that he sees the supply being constrained, he onlyimplies his confidence in persistent demand for gold.

 After all, if supply drops … but demand drops too … there’s no imbalance, and therefore, no opportunity.  Zell’s too smart to miss that.

So Zell must see gold demand holding … or increasing.

That means the supply and demand dynamic in gold is SO compelling that billionaire Sam Zell is buying gold for the FIRST time in his EPIC career.

That’s telling in and of itself.  But wait!  There’s more …

In addition to constrained supply combined with persistent and growing demand going forward … Zell must think the opportunity in gold is quite good right now relative to other investment options.

Which begs the question …

What’s different in TODAY’s world to push the prospects for gold so high up Sam Zell’s priority ladder?

After all, he’s been around a LONG time … through stock market crashes, recessions, financial crises.  What’s different NOW that makes gold alluring? 

That’s a topic too big for this commentary … and our limited brains …

… but it will be a hot topic of discussion with gold experts Brien Lundin, Dana Samuelson and Peter Schiff aboard the upcoming Investor Summit at Sea™.

We’re guessing part of the answer is wrapped up in Sam Zell’s second subtle comment …

Sam Zell is buying gold as a “hedge.”

Hmmmm … that’s interesting.   A hedge against what?

Investopedia defines a hedge this way …

“A hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security.”

Well, THAT’S interesting.

So Zell is using gold to “reduce the risk of adverse price movement in an asset.”

And he apparently considers gold to be highly useful as “an offsetting position in a related security.”

Which begs yet another question …

What asset / related security is Zell worried about … for the first time in his long and illustrious career?

Our guess is it’s the U.S. dollar.  In fact, we’d bet a beer on it.

And there’s one more clue we think bolsters the argument Zell is hedging the dollar …

Zell is bullish on oil.

 Wow.  What a coincidence …  our recent episode on precious metals was immediately followed with an episode on oil and gas.

Maybe Zell’s been listening to The Real Estate Guys™ radio show???

Um, probably not.

More likely, we’re learning a lot from all the smart folks we hang out with and listen to … and we’re starting to think like billionaires.  We hope so.

So why oil?

Also coincidentally … just a week before the Sam Zell interview was published, we published our weekly newsletter and talked about … oil.

So we won’t take time here to explain why we think oil could be a big story going forward.  You can read our thoughts here.

But this Zell interview affirms what we and many of our big-brained pals have been monitoring carefully for several years …

The dollar is under attack … from both internal and external forces.

So anyone who earns, invests, borrows, lends, or denominates net worth in dollars … most likely YOU … should probably take steps to become more aware and better prepared.

After all, if multi-billionaire real estate investor Sam Zell is hedging against the dollar … it’s smart to pay attention and consider doing the same.

Until next time … good investing!

More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.


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Physical Precious Metals – A Guide to Getting Started

Physical Precious Metals – A Guide to Getting Started

 

Gold, silver, platinum, and palladium … oh my!

Diversify your investment portfolio with a real asset that stands the test of time.

Physical precious metals are widely traded and competitively priced. This makes coins and bullion … from gold and silver to platinum and palladium … a great arena for beginning investors.

Dana Samuelson has worked for some of the most influential precious metals trading companies. In this exclusive guide, Dana shares knowledge gleaned from more than thirty years of experience with YOU.

Jump in and learn:

  • The do’s and don’ts of dealing in precious metals
  • Which products Dana recommends and why
  • Why scarcer, historical coins are viable investment options
  • And much more!

Simply fill out the form below to get your free copy of “Physical Precious Metals – A Guide to Getting Started…”

 


Future of Money and Wealth

The economy may be strong …

but what about the financial system supporting it?

 

Discover the opportunities hidden inside a FRAGILE financial system … and how to HEDGE against inflation, deflation, and even stagflation.

Featuring voice largely shunned by mainstream media, the Future of Money and Wealth reveals …

 

  • The REAL trade war no one’s talking about … and how Russia and China are making major moves to take down a major U.S. stronghold …

  • Which assets are in bubbles now … and specific strategies to fortify your balance sheet … before it’s too late …

  • The shocking truth about oil … it’s direct impact on YOUR wealth … and how to profit from what’s about to happen …

  • Who the new tax law REALLY helps … and how YOU can use it to grow more wealth faster (it’s NOT an IRA) …

  • PLUS … candid conversations about crypto-currencies … wealth privacy strategiescontingency planning … and MUCH MORE!

 

Just ONE good idea can make or save you a FORTUNE …

 

Future of Money and Wealth brings you a HUGE collection of experts, thought-leaders, and real-world investors … who ALL volunteered their time to share their best ideas, warnings, and strategies with over 400 people in the live audience …


Robert Kiyosaki is the author of Rich Dad Poor Dad

Robert Kiyosaki

Famous for being the greatest-selling personal finance author in history (Rich Dad Poor Dad series), Robert is a mega-millionaire investor in real estate, precious metals, and oil. He’s also an avid student of money, economics, investing, and the financial system. He was one of the few pundits publicly warning the world about the 2008 financial crisis.


Doug Duncan PhD is the chief ecoomist for Fannie MaeDoug Duncan

Doug is SVP and chief economist for Fannie Mae, which is perhaps the most dominant force in U.S. residential lending.

Doug is responsible for strategic research, including how Fannie Mae’s activities affect housing. He’s been named one of Bloomberg / Business Week’s 50 Most Powerful People in Real Estate.


Peter Schiff is the CEO and Chief Global Strategist for Euro-Pacific Capital, the best selling author Crash Proof and The Real Crash, and the host of the Peter Schiff podcastPeter Schiff

Peter’s also a multi-millionaire investor, money manager, and outspoken financial pundit.

A best-selling author in his own right (Crash Proof 2.0 and The Real Crash), like Robert Kiyosaki, Peter was on record vociferously alerting people in 2006 about the impending financial crisis.

 


Chris Martenson is host of the Peak Prosperity podcast and the creator of The Crash Course.Chris Martenson

An economic researcher and futurist, Chris is an expert in the relationship between energy, the environment, and economics. Rising to prominence with his groundbreaking video series, The Crash Course, Chris is a best-selling author (Prosper!) and hosts a popular podcast featuring interviews with a variety of thought leaders and experts.


Simon Black is the founder of Sovereign ManSimon Black

A former Army intelligence officer turned international entrepreneur and investor, Simon’s a worldwide traveler, an avid student of political and financial history, and has developed an eclectic portfolio of investments and business ventures all over the globe.

Simon’s diverse experience and global perspectives make his presentations both practical and enlightening.


Tom Wheelwright is Robert Kiyosaki's personal CPA, a Rich Dad Advisor, and the best-selling author of Tax Free WealthTom Wheelwright

Tom’s a high energy tax and wealth strategist, a best-selling author, an entrepreneur … and is Robert Kiyosaki’s personal CPA.

Tom’s extremely well-versed in the new U.S. tax law and shares how investors can use it to build substantial wealth and permanently reduce taxes.

 


Kim Kiyosak is the best-selling author if Rich Woman and co-founder of the Rich Dad CompanyKim Kiyosaki

Kim is a high-powered real estate investor, entrepreneur, and best-selling author of Rich Woman. She’s co-founder of the Rich Dad company and a popular speaker on the topics of investing,
entrepreneurship, and empowering women.

Kim co-hosts the Rich Dad radio show, and is an avid student of investing, economics, and personal development.


G. Edward Griffin is the author of the Creature from Jekyll IslandG. Edward Griffin

Ed is a renowned investigative journalist and best known for his epic and controversial book, The Creature from Jekyll Island – A Second Look at the Federal Reserve.

Ed has a deep and historical understanding of money, currency, central banking … and a knack for explaining all of it in an easy to understand way.

 


Brien Kundin is the produced of The New Orleans Investment Conference and the publisher of Gold NewsletterBrien Lundin

For nearly four decades, Brien’s been an active student, investor, commentator, and newsletter publisher in the precious metals industry.

As producer of the longest running investing conference in the world, Brien’s one of the most informed, connected, and intelligent experts on money, precious metals, mining, investing, and economics.


 

Future of Money and Wealth is brought to you by The Real Estate Guys™ Radio Show

 

Broadcasting on conventional radio since 1997, The Real Estate Guys™ radio show is an investment talk program focusing on real estate as the core of a real asset portfolio.

 

After being among the many real estate investors caught completely unaware and unprepared for what happened in 2008 …

 

… hosts Robert Helms and Russell Gray are on a mission to bring the brightest and best real asset investing experts together to share insights, ideas, and strategies for building and preserving real, sustainable wealth.

 

The Real Estate Guys™ co-host Russell Gray explains why …

 

What YOU DON’T KNOW you don’t know can COST YOU BIG

 

Sound dramatic? Maybe. But consider this …

 

Wealth Wiped Out Without Warning

In 1929, 1987, 2000 and 2008 … millions of people were financially DEVASTATED by market disruptions they didn’t even see coming.

 

Meanwhile, in those very same markets … informed and prepared investors not only survived … they THRIVED.

 

What’s the difference?

 

Be Careful Who You Listen To

Successful investors didn’t buy the hype from Wall Street, financial media, and politicians who downplay dangers … just so they can earn fees, placate advertisers, and win votes.

 

Remember this classic assurance?

 

“Importantly, we see no serious broader spillover to banks or thrift institutions from the problems in the subprime market.”

Federal Reserve Chairman Ben Bernanke on May 17, 2007

 

Oops. Of course, just a year later the financial system melted down … triggering the GREATEST FINANCIAL CRISIS since the Depression.

 

But successful investors back then understood history. They looked at the financial system underneath the “strong” economy … and saw reasons to be alarmed.

 

They paid attention to the people and signs others were ignoring …

 

… so they could be proactive to get in position to prosper while there’s still time.

 

TODAY, there are record levels of consumer, corporate, and government debt

 

… and rising interest rates are already triggering loan defaults … to levels not seen since the 2008 crisis.

 

Stocks indexes are setting bubble highs … and market volatility suggests traders are ready to run for the exits … crashing prices … at the first sign of recession.

 

And that’s just some of the more obvious challenges facing Main Street investors.

 

But there’s GOOD news …

 

Many successful investors prospered through past market disruptions and YOU can too.

 

By finding new ideas, strategies, and the right experts you’re better able to see what’s coming sooner

 

… so you can be proactive preparing YOUR business and portfolio to both survive and THRIVE through the next crisis.

 

Future of Money and Wealth brings YOU important insights from many top experts … so YOU can be more aware and prepared.

 

Eavesdrop on the Experts …

 

Imagine being a fly on the wall while some of the biggest brains in economics and investing share expert insights and discuss the most pressing issues facing investors today ..

 

You don’t have to imagine … because the Future of Money and Wealth is all on videotape and ready for YOU to watch from the comfort of your own home or office!

 

Just ONE good idea can make or save you a FORTUNE …

 

Explore the future of money and wealth with people well-qualified to have an opinion …

 

Speakers include Rich Dad Poor Dad author Robert Kiyosaki and outspoken financial pundit and money manager Peter Schiff.

 

Both men are famous for LOUDLY warning the 2008 crash was coming … in spite of being mocked by mainstream financial media.

 

Back then the economy was STRONG … but the financial system was FRAGILE. And while many “experts” couldn’t see it … Kiyosaki and Schiff did.

 

And while Federal Reserve chair Ben Bernanke was DEAD WRONG … Robert Kiyosaki and Peter Schiff were RIGHT.

 

Today Robert Kiyosaki and Peter Schiff are concerned again. And this time they’re not alone.

 

Fannie Mae (yes, THAT Fannie Mae … the one making most of the mortgages in the U.S.) chief economist Doug Duncan points out that most of his predictions from last year turned out to be eerily accurate …

 

… and then reveals when he thinks the NEXT recession will strike (it’s not that far away)

 

And that’s just one of TWENTY powerful expert presentations and panels recorded at the Future of Money and Wealth conference.

 

Other important topics include …

 

    • Where real estate is likely headed … and which niches are best positioned for profit

 

      • Why oil and gas are likely headed higher … and the important impact on the economy and opportunity for investors

 

        • The fascinating rise of block-chain technology … and how crypto-currencies are changing the future of money and wealth

 

… PLUS a shocking revelation about the RAGING currency war between the U.S. and the tag team of Russia and China.

 

Far Away But TOO Close to Home …

 

You’ll discover there’s a WHOLE LOT MORE to the sparring between Uncle Sam and Russia and China than the mainstream media lets on.

 

And while it may seem like it’s far away from YOUR income and investments … it’s NOT.

 

If you earn, save, or measure your wealth in dollars …

 

… you REALLY need to understand the Future of Money and Wealth.

 

Nearly 400 people in the live audience at the Future of Money and Wealth conference were blown away. They called it “life-changing”, “eye-opening”, and “invaluable”.

 

But don’t take our word for it … watch for yourself …

 

Here’s the GREAT NEWS …

 

We videotaped the ENTIRE event … all TWENTY presentations and panels …

 

… nearly fourteen compelling hours of essential education

 

… and we’ve organized them all into one powerful online video series.

 

Now YOU can hear directly about the Future of Money and Wealth from Robert Kiyosaki, Peter Schiff, Doug Duncan, Chris Martenson, Tom Wheelwright, Brien Lundin, Simon Black, G. Edward Griffin … and MANY other top experts.

 

You may not know who all these people are right now … but you’ll be REALLY glad to hear from them.

 

Their wisdom is impacting the lives of many millions of people all around the world … and it can help you too.

 

Real World Investors React …

 

It’s one thing to hear and understand what’s happening in geo-politics and macro-economics. It’s another to decide what to DO about it at the micro-level.

 

So we included lots of practical insights from a great collection of niche experts, including …


Adam Taggart is co-founder of Peak Prosperity and co-author of ProsperAdam Taggart

Adam started his career as investment banker and saw first hand how broken Wall Street is. Later, he helped a company go from start up to acquisition in Silicon Valley. Today, Adam and his partner Chris Martenson develop and share ideas to help people prosper even when the world is full of uncertainty.


Kathy Fettke is the co-founder of Real Wealth NetworkKathy Fettke

Kathy’s a highly successful real estate investor, syndicator, and investment club leader.

She’s also a frequently featured expert real estate pundit in media and at conferences.

 


Gene Guarino is founder of Residential Assisted Living Academy and an expert in residential assisted living investingGene Guarino

Gene’s a recognized leader in the residential assisted living facilities investing space. He’s a trained, but not practicing Certified Financial Planner. Gene saw opportunity in solving one of the major problems facing an aging demographic … and grabbed it.

 


Beth Clifford is an international real estate developerBeth Clifford

Armed with a formal education in classical economics and graduating with honors, Beth cut her business teeth on the streets of Wall Street.

Today she’s CEO of a groundbreaking offshore real estate development and construction company.


Brad Sumrok is the founder of Sumrok Apartment Investing MasteryBrad Sumrok

Brad freed himself from the corporate grind in less than 5 years by investing in apartment buildings.

The 2008 financial crisis crushed many homeowners … and made many apartment investors multi-millionaires. Brad not only built a portfolio that survived the crash … he thrived through it.


David Sewell is an international agricultural investor and entrepreneur

David Sewell

David is a Canadian-born international agricultural investor and entrepreneur operating in Latin America.

With an MBA in Corporate Finance and an extensive background in real estate, securities, syndication, and international business … there’s not much David hasn’t seen.


Damion Lupo is founder of Total Control FinancialDamion Lupo

Damion is a modern-day financial renaissance man with expertise in real estate investing, precious metals, and crypto-currencies. He specializes in strategies using alternative assets and sheltering wealth from predators and taxes through qualified retirement plans.


Patrick Donohoe is founder and CEO of Paradigm LifePatrick Donohoe

Patrick is a financial strategist and an expert in the unique use of life insurance contracts for enhanced cash management and private banking.

He has a degree in economics, hosts his own financial podcast, and is an avid student of economics, investing, and financial history.


Dana Samuleson is owner of American Gold Exchange, and an expert in precious metals and numismatic coins.Dana Samuelson

Dana has been in the precious metals business for decades.

He owns and operates a long-established precious metals and numismatic coin dealership, and is past-President of the Professional Numismatic Guild.

 


 

It’s said to truly understand a subject, you need to study it from multiple perspectives.

 

Wealth that took a lifetime to accumulate can be lost or severely diminished in a financial crisis.

 

To survive and thrive when a financial system collapses or resets takes understanding, awareness and preparation. Future of Money and Wealth is an affordable, fun, and easy way to get started!

 

A tremendous value …

 

This program cost MANY thousands of dollars to produce. With travel, hotel and registration … every person at the taping paid thousands.

 

And the information in this video series is EASILY worth thousands of dollars … because just ONE great idea can make or save you a FORTUNE.

 

So we could charge a LOT more for this program … and it would be totally worth it.

 

And of course, we need to charge SOMETHING to cover costs … AND more importantly, so you have enough skin in the game that you’ll actually watch it all.

 

But as you’ll see … it’s important to get this vital information out to as many people as possible. So we’re making it a no-brainer …

 

Get ALL 20 videos … 14 hours of compelling content … for only $497 (regularly $1997)

 

PLUS a SPECIAL BONUS when you act today … the Strategic Real Asset Investing webinar.

 

HUGE value … great price … powerful, life-changing information. But ONLY if you watch it!

 

Remember … what you don’t know that you don’t know could cost you a fortune … just ask all the people blind-sided by the last financial crisis.

 

“An investment in education pays the best dividend.”
– Benjamin Franklin

 

Good advice. No wonder Ben’s on the $100 bill.

 

Now it’s decision time …

 

You’ve read this far for a reason.

 

You’re concerned about the future … YOUR future … but while it’s easy to be interested, it takes an investment of time, money and effort to actually get educated and busy implementing.

 

But if you think that’s a burden …

 

Consider the price of NOT being informed and prepared …

 

And even if “this time it’s different” (famous last words) …

 

.. and there’s never going to be another financial crisis … sunshine and unicorns for as far as the eye can see …

 

Which is worse … to be prepared and not have a crisis … or to have a crisis and not be prepared?

 

Remember, the course you don’t watch can’t help.

 

Whatever you have, you’ve worked hard for.

 

And remember … the flip side of a crisis is opportunity, so it’s not gloomy … there’s a lot to look forward to and plan for.

 

For the informed and prepared … the future is bright. But for those who aren’t … not so much.

 

With the stakes this high, it’s time to …

 

To your prepared and prosperous future,

 

Robert Helms and Russell Gray
Hosts
The Real Estate Guys™ Radio Show
Producers of Future of Money and Wealth

 

P.S. Think about how much financial education you got in school. Most people get NONE … and so they’re easily herded into a system designed to feed the banks interest, the government taxes, and Wall Street commissions and fees.

 

Worse, without context … it’s nearly impossible to recognize major problems forming … while bankers, politicians, and financial media claim all is well.

 

Future of Money and Wealth will shock and enlighten you … and help you prepare yourself and your portfolio to PROSPER through what many experts believe is an inevitable economic re-set.

 

You’re a click away from changing your future …

 

Get ALL 20 videos … 14 hours of compelling content … for only $497 (regularly $1997)

PLUS a SPECIAL BONUS when you act today … the Strategic Real Asset Investing webinar.

Just ONE good idea can make or save you a FORTUNE …

Expert Insights from the New Orleans Investment Conference

We were lucky enough to spend some time at the New Orleans Investment Conference, the longest-running investment conference in the United States.

In this episode, we chat with three expert guests. They share their expertise on all things investing, from cryptocurrencies to gold, the Federal Reserve to commercial real estate, the international oil market and the U.S. dollar.

Our guests touch on real-estate-specific issues, but they also give us the big picture about what’s going on in the financial space … and how that will affect investors of all types.

PLUS … our three guests have never before been featured on The Real Estate Guys™ show. Listen in to hear brand-new, timely insights from these money pros!

In this episode you’ll hear from:

  • Your top-dollar host, Robert Helms
  • His dollar-short co-host, Russell Gray
  • The godfather of real estate, Bob Helms
  • President of Neptune Global, Chris Blasi
  • Author of Fed Up, Danielle DiMartino Booth
  • Senior editor of the website International Man, Nick Giambruno

Listen



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Cryptocurrencies and precious metals, oh my!

Chris Blasi is an expert in all things money. He founded the precious metals exchange Neptune Global and has patented a new way to invest in metals.

We asked him to give us his insights on the cryptocurrency trend.

“Cryptocurrencies are all the rage,” he told us. That doesn’t mean they’re always the best choice.

Cryptocurrencies are digital currency backed by blockchain software. That means it is susceptible to the same issues as other software, like code issues, storage databases, and scaling.

Bitcoin is the big name in cryptocurrency right now, but there are hundreds of initial coin offerings, or ICOs, put on the market every day as people create new cryptocurrencies.

These cryptocurrencies have cost investors millions, Chris warns. “People need to step back and look at the market more closely” before making the jump to investing in cryptocurrencies, he says.

“Cryptos are actually a polar opposite of gold,” Chris says. Gold is a tangible asset, while cryptocurrencies are entirely digital.

That doesn’t mean he’s saying yay or nay to digital currencies … only cautioning investors to understand what they really are.

“Cryptos offer speculative gains,” he notes. “Do your homework and invest in moderation.”

Nick is actually an expert in gold … he developed a patented unit of trade for precious metals, the PMC ounce. It’s a unit of trade that corresponds to proportions of physical gold, silver, platinum, and palladium.

Using real-time technology, investors can buy and sell PMC ounces of metal immediately through Neptune Global.

The goal is to offer a turnkey precious metals fund … backed by real assets. And the PMC ounce has been architected to capture the blended return of each metal, smoothing out the volatility of trading in just gold or silver, for example.

Fed up with the Federal Reserve

Danielle DiMartino Booth has dipped her feet into all matters related to money. She has experience in private and public equities, worked as a finance journalist, and spent nine years at the Federal Reserve. She recently published the book Fed Up, her take on what’s wrong with the Federal Reserve.

We started by asking Danielle to give us an overview of the Federal Reserve.

The Fed is a quasi-public organization that is intended to function as the central bank of the United States.

Unlike some conservative politicians and finance experts, Danielle doesn’t want to abolish the Fed. She gave us her take on what we need to do to reform the Fed:

  1. Go from a dual mandate to a single mandate. The current Federal Reserve operates on a dual mandate of 1) protecting the value of our dollar and stabilizing prices and 2) maximizing employment. Danielle is in favor of completely dropping the labor mandate, which she believes would help keep both inflation and the value of the dollar in check.
  1. Reduce the number of local Federal Reserve banks from 12 to 10 and add a bank to the West Coast. In a largely cashless society, the need for so many districts has clearly dissipated, says Danielle.
  1. Hire knowledgeable people who represent regional economies. Get rid of the majority of the regulators in the Federal Reserve. Instead of hiring PhDs, hire people who actually understand the inner workings of the U.S. financial system.  Give each district a permanent vote on the federal open market committee, and change the complexion of the Federal Reserve board so it’s composed of people who are actually on the receiving end of the policies the Fed makes.

Danielle is ridiculously knowledgeable about the Fed, but she also had a lot to say about real estate. We asked for her thoughts on the real estate market.

“Investors are missing the forest for the trees,” Danielle says. “I’m seeing the forest.”

Danielle notes that commercial buildings are overbuilt right now, and that abandoned B- and C-class malls and retail structures can only be repurposed for so long. That glut of overdeveloped, centrally located land will cause an oversupply problem, she says.

Another problem? “There are not enough low-cost homes.” We are facing a housing shortage that will only get worse in the next 20-30 years.

The people who benefit most from the overall real estate situation, Danielle says, are the people who are perceptive and get in while the fire is still burning and prices are at rock bottom.

The yuan, the petrodollar, and what it means for YOU

Nick Giambruno is a reporter and editor for Casey Research, specifically their International Man website.

We asked him about an intriguing article that appeared in the news for about a half second.

It’s about China’s hopes to price oil in the yuan (instead of the U.S. dollar) using a gold-based futures contract.

Why is this significant? Nick walked us through what this could mean.

If China is successful, “This will usher in a new era in the international monetary system,” says Nick.

A quick history lesson:

  • In 1971, Nixon ends the Breton-Woods system; the dollar is no longer backed by gold
  • To preserve the value of the dollar, Kissinger creates the petrodollar system, in which the U.S. government agrees to provide protection to Saudi Arabia in exchange for oil being priced in U.S. dollars
  • The petrodollar system gives other countries an incentive to hold U.S. dollars

If China goes forward with its new money mechanism, it could divert 400-600 billion dollars in oil sales every year that would normally go through U.S. currency.

This could have a HUGE impact on international financial markets. Oil is the most valuable commodity in the world right now … essentially, Nick says, “China is going for the jugular of the U.S. financial system.”

How does the breakdown of the petrodollar concern you? “The breakdown of the petrodollar will have clear consequences for interest rates.” And as we all know, interest rates are the price of money.

We hope you learned something new from our expert guests! Now go out and make some equity happen!


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

Bulls, Bears and a Broader Perspective from Three Big Brains

Will the Fed raise interest rates?  Will gold go up?  Will stocks crash?

Inquiring minds want to know!  And so do real estate investors.

So we sit down to chat with three of the smartest guys we know…a Bull, a Bear and a Bug (gold that is).  And then we discuss what it all means to YOUR real estate investing.


  • Want more? Sign up for The Real Estate Guysfree newsletter and visit our Special Reports library.
  • Don’t miss an episode of The Real Estate Guys™ radio show.  Subscribe to the free podcast!
  • Stay connected with The Real Estate Guys™ on Facebook!

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed.


Divining the tea leaves of financial markets is an imprecise science at best…and probably much more of an art.

But whether science or sorcery, when you’re busy building a portfolio of assets, liabilities, cash flow and savings, you need to pay attention to a lot of moving parts.

Broadcasting from the New Orleans Investment Conference in (you’ll never guess…) New Orleans, Louisiana:

  • Your divine host, Robert Helms
  • His imprecise co-host, Russell Gray
  • Renowned economist, author and stock guru, Mark Skousen
  • Best-selling author, outspoken financial pundit and Fed critic, Peter Schiff
  • New Orleans Investment Conference promoter, newsletter publisher and gold guru, Brien Lundin

Each of our guests have been with us before.  But in case you’re new to the show, you should know that NONE of them are real estate investors.  And for our purposes, that’s a good thing.

Bull and bear markets provide different challenges and opportunitiesWe’re looking for peripheral perspectives on the financial markets which affect us all…no matter which segments we’re invested in.  That’s because all these markets are part of a fluid sea of funds which ebb, flow, circulate and mix.

All but the most inexperienced real estate investors understand the bond market sets interest rates.  And as you accumulate a portfolio of properties, unless you’re a cash buyer, you’re also accumulating a big portfolio of loans.

So interest rates and the bond markets should be of great interest to you.

Why are interest rates low?  Will the Fed raise interest rates?The monetary wizards at the Federal Reserve pull all kinds of financial levers trying to manage the economy.

Some think that the Federal Reserve sets interest rates.  That’s not technically true.  At least not for mortgages and many other market rates.

But the Fed has a HUGE impact on interest rates through their open market manipulations…er, activities.

The Fed adjusts bank reserve requirements, sets the Federal Funds rate (that’s the one you hear about all the time on the news), and manipulates various and sundry other levers to expand, contract and coerce the costs and motivations of lenders and borrowers.

So watching the Fed is an obsession for many investors.  That’s why the Fed is in the financial news all the time.

Right now, the Fed keeps TALKING about raising interest rates.  They haven’t done it in 10 years.  But they keep talking about.

Peter Schiff is bearish on the dollar and US stocks, and bullish on gold and foreign stocksPeter Schiff thinks the Fed probably won’t raise rates.  He says if they do, they’ll prick bubbles in stocks, bonds and other markets …and expose a phony economic recovery.

What about the stock market?  Will stocks go up…or will they crash? 

Of course, interest rates affect more than the cost of money.  Rates affect how money is used, stored and borrowed.

Companies are borrowing cheap money to buy back their own stock.  And why not?

If your company earns anything above the cost to borrow, then every dollar you borrow to buy your own stock makes you a profit.  It’s just like when a real estate investor can borrow 4% mortgage money and buy 8% cash flow properties.  You’d do that all day long.

Plus, stock buybacks improve a company’s EPS (earnings per share) because they divide the same earnings over less outstanding shares.  This can look good to unsophisticated stock investors and make a company look like its sales and profits are growing, when they could actually be shrinking.

Cheap money also empowers mega mergers and leveraged buy outs.

In a low interest rate environment, mergers and acquisitions become more common. Sometimes it means layoffs.You’ve probably heard about AT&T and DirectTV, American Airlines and U.S. Airways, Anheuser-Busch and Miller, and the big one currently under consideration between Pfizer and Allegra.  And that’s just off the top of our head.

These deals need to be financed.  Cheap money makes the debt load easier to cover from operational income.

It’s no different than when a real estate investor borrows to buy a property and then pays for the loan with the rents.

Hopefully, the property cash flows at a rate higher than the cost of the funds.  So the lower the cost of the funds, the more properties qualify to do a deal.

Now you might choose to go in thin as long as you have a viable plan to increase net operating income.  Guys like Ken McElroy do this all the time.

But guys who take over companies do the same thing.  And often their plan to increase profit, means cutting back on things like payroll (layoffs) and long term investment (research & development and capital expenditures).

M&A (mergers and acquisition) guys argue the “acquire and fire M.O.” helps make companies more efficient.

Maybe.

Sometimes it makes companies less competitive.  Because when you lay off people, you lose intellectual capacity.  And when you cut R&D and Cap Ex, you don’t have new products or state of the art equipment and efficiency.  Eventually, all this can make you LESS competitive.Merging companies can eliminate competition, which can improve profits but sometimes at the expense of innovation, quality and efficiency.

But we’re not here to judge.  We aren’t that smart.  We’re just pointing out what’s going on so you can anticipate and react accordingly.

For real estate investors, it can mean entire employment bases being shut down.   When Company A buys Company B, sometimes they shut down an entire campus.  Jobs are lost.  That affects the local real estate market.

Are any major employers in YOUR market in talks to merge?  Pay attention!  It could affect the local economy…and YOUR bottom line.

Low interest rates also affect Mom & Pop stock investors…

Right now, low interest rates are forcing people out of savings and into the stock market.

Many boomers are forced into the stock market because bank savings interest rates are too lowThe stock market is the only place most paper asset investors know to go to try get enough earnings from their savings to live on.  Otherwise, they have to eat into the principal.

Of course, if they eat too much principal, they run out of money before they run out of life.  This is one of the greatest fears of the HUGE baby boomer generation…which is retiring at the rate of over 10,000 per DAY.

Of course, helping these folks discover how income producing real estate can provide better cash flow, lower taxes, and a long term hedge against inflation is one of the GREATEST OPPORTUNITIES going right now.  And with the new law opening up your ability to market to potential investors, there’s never been a better time to get into the syndication business.

Mark Skousen is an economist, author, stock guru and the promoter of Freedom FestMark Skousen thinks as long as rates stay low, the stock market will stay strong.  And speaking of strong…

Why is the dollar strong?

This is SUCH a GOOD question.  But before we tackle it, let’s consider what it means.Relative to other currencies, the dollar is king....for now.

The “strength” or “weakness” of the dollar can be measured against many things.

If you go to the gas station and can fill up your tank for $20, you might say the dollar is “strong” against gasoline.  You can buy a lot of gas for fewer dollars.

But if it takes $200 to fill you tank, you’d probably say the dollar is “weak” against gas.  It takes a lot MORE dollars to buy the same gas.  Or you could say gas is strong.  Or gas went “up”.

The point is that “strength ” is relative.  Compared to what?

Right now, many other currencies are even WEAKER.  In fact, some countries’ interest rates have gone NEGATIVE.    And most other countries’ economic growth is even more anemic than that of the United States.

Of course, the U.S. has a trump card…and it’s not the guy running for President.

The U.S. dollar is still the world’s reserve currency.  And U.S. Treasuries, which are denominated in dollars, are considered by most to be a “safe haven” asset.

You’ve probably  noticed, there’s been bit of instability in the world.  And it’s been going on for awhile.  So (allegedly) paper asset investors worldwide are piling into dollars and Treasuries…for safety.

Of course, not everyone thinks dollars and Treasuries are the safest place to be….

Will gold go up?

China and Russia have been dumping dollars and Treasuries and buying gold.  Meanwhile, U.S. mint sales are at record highs.  Physical inventories are dropping.

Gold is an indicator of the relative strength or weakness of the dollarYet the price of gold FALLS.  That’s weird.

But actually, gold is only falling when measured in dollars.  In terms of other currencies, gold is actually rising.

We know.  It’s hard to get your mind around.  But we think it makes sense to try.  Go back and think about the gas example.  When you have to trade more dollars for the same gas, you can say the dollar fell…or you can say gas went up.

Think about what you’re doing by investing…

You’re working at earning or raising dollars to use as down payments.  So you’re probably being paid in dollars and saving in dollars, right?

Then you go out and borrow…in dollars…to buy a piece of real estate that will generate income in…dollars.

Along the way, you’ll take in deposits, build reserves, set aside money for contingencies and capital expense…probably all in dollars.

And even if you’re reinvesting by adding more properties, you’re still going to be building up bigger and bigger CASH balances…in dollars.

So now your EXPOSURE to the banking system and the dollar is GROWING.

Therefore, it seems sensible for you to be concerned about the strength of the banking system and the dollar, right?

BUT…you say…what difference does it make?  What choice do I have?

GOLD.Gold is an alternative to the dollar as a liquid store of value

Precious metals are an alternative to dollars as a place to store liquid reserves.  It’s where people (and countries) go when they’re concerned about the dollar and the banking system.

So we pay attention to gold because it’s an indicator of the strength and direction of the dollar.  Make sense?

It used to be good enough to simply watch the PRICE of gold.  If it was down, then demand was down.  If the price was up, then demand was up.  So you could accurately use price to gauge demand.

Not today.

That’s because physical gold prices are impacted by paper derivatives in the futures markets.  That is, there are people who buy and sell physical gold.  And there are those who buy and sell contracts (paper) which are allegedly backed by gold.

We know.  It’s heady stuff.  But please don’t gloss over.  It’s not as hard as it seems.  And it really does matter to your long term financial health.  Really.

Understanding gold prices and how gold futures work can be challengingWe won’t get into all the mechanics of the gold futures markets.  This is already a marathon blog (THANKS for sticking with us this far!)…

Suffice it to say that when paper traders sell highly leveraged paper contracts they are able to push down the price of gold in both the paper AND the physical markets.

But when the price of physical gold drops, physical buyers show up and claim physical gold.  As long as those orders get filled, people trust the paper contracts.  The paper guys may not want the physical, just like you may never want all your cash out of the bank.

But the minute you don’t think the bank has the cash to give you, you want it all.  Right now.  And if you can’t get it, you lose trust in that bank statement you have that says the cash is really there.

Well, when we first started watching the gold market, there was twice as much physical gold in the warehouses and there were about 40 claims on every ounce of physical gold.

Today, the physical inventory is half what it was and the outstanding claims are pushing THREE HUNDRED for each ounce.

This makes us suspicious that the PRICE of gold may not really be “free market”…which means it’s less useful for determining what’s really happening with the dollar.

If the demand for physical market were to exceed the ability of the warehouses to deliver the gold, then the true price of gold in dollars could be revealed.

Going back to our gas example, it means it would take more dollars to buy the same gold.  Gold would go “up”.  Really what’s happening is the dollar would be “down”.

But we’re just real estate guys and we’re clearly out of our league when commenting on gold.

Brien Lundin is the promoter of the New Orleans Investment Conference, the published or Golden Opportunities and an expert on precious metals like gold and silver.Brien Lundin is one of the smartest, most connected gold guys we know.  He tells us the gold investors he knows think gold has put in a bottom.  Which really means the dollar compared to gold has peaked.

That would mean gold will be going “up” and the dollar will be going “down”.

If so, it explains why governments (Russia and China in particular) and individual investors are using dollars to buy gold now.

And as if all this wasn’t enough, consider it’s being reported that China’s currency (the yuan) may be about to be included as one of the world’s reserve currencies, joining the U.S. dollar, the British pound, the Euro and the Japanese yen.  Of course, the U.S. would need to approve it.  Which might explain why China set up its own international bank.

As we discussed in our Real Asset Investing report, this is a trend we’ve been watching develop for several years.

What does it all mean to real estate investors?

Okay, for you marathon readers, let’s try to wrap all this up and put a bow on it.

Interest rates have a big and direct impact on your mortgages, your cash flows, your tenants and the local economies which support your properties.

The Fed’s motivations and maneuverings impact interest rates.  And the Fed is influenced by the stock market and the dollar (and vice versa).

Gold is one of a few indicators of the strength and future of the dollar, which has been slowly losing its grip as the world’s reserve currency.

If there is hidden weakness in the U.S. economy and U.S. dollar, rising interest rates and/or a failure to deliver on physical gold shipments could quickly expose it.

The result could be rapidly rising interest rates or a rapidly falling dollar (inflation, i.e., rapidly rising prices).

In any case, you want to be ready for ANYTHING.  And dollars, bonds and bank accounts probably won’t be as safe as many think they are.

So we continue to think real assets which serve essential, transcendent needs (shelter, food) in markets with good infrastructure, population, business climate and low costs will be the safest (and probably most profitable) places to be.

The MOST IMPORTANT INVESTMENT you can make right now is…

Your own education and network.  Because if things get crazy, you’ll want to see it sooner, understand it better, and be connected to lots of smart people you can collaborate with to navigate a rapidly changing environment.

We know you’d probably like everything to be simple and easy.  But that’s not the world we live in today.

Of course, it doesn’t have to be scary or boring.  Personally, we go out of our way to create fun and educational events to bring great people together to learn, share, connect and work on a building a brighter future.


Listen Now: 

  • Want more? Sign up for The Real Estate Guysfree newsletter and visit our Special Reports library.
  • Don’t miss an episode of The Real Estate Guys™ radio show.  Subscribe to the free podcast!
  • Stay connected with The Real Estate Guys™ on Facebook!

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed.

 

New Orleans Investment Conference – Oct 14-17, 2020

The 46th Annual

New Orleans Investment Conference

♦ Real Estate  ♦ Precious Metals  ♦ Currency  ♦ Energy  ♦ Economics

 

The New Orleans Investment Conference is our FAVORITE investment conference of the year
(besides our very own Investor Summit at Sea™)!

 

October 14-17, 2020

 

To be sure YOU get Priority Access registration … 

 

Here’s WHY the New Orleans Investment Conference is a MUST ATTEND event for serious investors…real estate and otherwise…

 

All the investments you have now, or hope to have in the future, float in an economic ocean in constant flux …

So TWICE a year … in the Spring aboard our own Investor Summit at Sea™ … and in the fall at Brien Lundin’s New Orleans Investment Conference

… we get together with top experts in economics, investing, real estate, precious metals, oil and gas … all the REAL ASSETS mainstream financial media barely mentions …

… and we talk about how all the macro movements trickle down to Main Street … and what moves savvy investors should make to GROW and PROTECT their hard-earned wealth in these HIGHLY UNCERTAIN times.

Tariffs, trade wars, trillion dollar deficits, and $21 trillion and growing debt.  Can the Trump economy outgrow crushing debt and deficits?  Or will the United States finally have to pay the piper?

China continues to push for a more powerful role in global finance … and in geo-politics.  They’re accumulating gold, expanding the adoption of the Yuan in international trade, and colluding with Russia to dethrone the dollar.

New Fed Jerome Powell now has his hands on the lever of United States monetary policy.  Will the Powell Fed raise rates and tighten credit?  And how will this Fed respond to the NEXT financial downturn?

How will all this affect the dollar, interest rates, and YOUR investments?

It’s enough to make your head spin.  But don’t stress.

Remember, many brave, bold and informed investors made fortunes through stagflation, high interest rates, crashing currency and financing markets … so it’s not the circumstances which dictate your fortune.

What matters is YOUR ability to navigate the changing seas.

 

Click here now to get on the Advance Notice List today >>

 

Modern Real Estate Investors NEED to See the Big Picture

This is NOT your parents’ real estate market. 

Before 2008, real estate prices had never crashed.  The U.S. was the lone financial superpower.  No one had heard of quantitative easing, derivatives, bailouts and bail-ins.

 

It’s a NEW world…

As an investor…real estate or otherwise…it’s critical to stay informed of the forces and trends looming on the horizon which can and will affect your wealth.

And if you’re a real estate investor trying to raise money from private investors, it’s really important to see the big picture and understand how other investments work.

So come hang out with The Real Estate Guys™ at the New Orleans Investment Conference…and immerse yourself in learning from some of the biggest brains in the business!

 

October 14-17, 2020

To be sure YOU get Priority Access registration … 

 

 

“An investment in knowledge pays the best interest.” – Benjamin Franklin Benjamin Franklin said an investment in knowledge pays the best dividend

 

03/22/15: The Death of Money – A Conversation with Jim Rickards

Think about the role money has in your daily life…

As real estate investors, we buy, rent, sell and refinance…all to acquire dollars…which is currently the money de jour.  And because, since 1944 the dollar has served as the world’s reserve currency, the health of the dollar affects virtually everyone…everywhere.James Rickards is on the record saying that currency wars have already begun

Lately, we’ve seen a lot of headlines proclaiming the “strength” of the dollar.  Some say it’s good.  Others say it’s bad.

But what happens if the dollar gets “sick”?  Or worse, if it dies?

Could that happen?  How?  Why?  And what does it mean to investors…real estate and otherwise?

In this episode, we’re excited to talk with a guy who’s hugely qualified to have an opinion on the subject of the relative health and future of the dollar.

So, in our radio reposing room undertaking the conversation for this edition of The Real Estate Guys™ radio show:

  • Your minister of monetary musing, host Robert Helms
  • The coroner of conversation, co-host Russell Gray
  • Best-selling author, former CIA advisor, lawyer, Wall Street veteran and a REALLY smart dude, James Rickards

If you’ve been paying ANY attention at all to alternative (i.e., not “mainstream media”) financial news sources, you’ve probably already heard of Jim Rickards.  We were going to include his bio, but we ran out of space on the server…so you can learn more here.

Rickards came to our attention through his two best-selling books, Currency Wars and The Death of Money…both of which have been on The Real Estate GuysRecommended Reading List since they first came out.

The message is straight forward…although understanding the mechanics underneath Rickards’ conclusions takes some study…

The U.S. dollar is vulnerable to being supplanted as the world’s reserve currency.  And while that has HUGE implications for everyone, it could be DEVASTATING for unprepared Americans.

That’s the BAD news.

The GOOD news is that there will be BIG OPPORTUNITIES for those who are paying attention and in a position to act decisively when the time comes.  We obviously want to be in THAT club!

Of course, if you’re a skeptic…and there’s nothing wrong with some healthy skepticism as long as you’re willing to do the research and go wherever it takes you…you might wonder why Rickards would share his strategic intelligence with anyone and everyone who will listen.

We wondered that too.

And the answer is really pretty simple….

Jim says the international monetary system has collapsed three times in the last 100 years.  Each collapse was followed by a period of civil unrest…and in some cases, war.

That’s not good for ANYONE…even guys eager to use insider knowledge to gain personal wealth.  So it’s in everyone’s enlightened self-interest to make sure as many people as possible are prepared for the possibility of a mega-shift in economic order.

So what does that look like?

Again…it’s pretty simple.  In fact, it’s so simple that many people won’t do it.

First, it’s important to understand the risks.  So listening to this broadcast and reading Jim’s books is a GREAT place to start.

When ALL your wealth is denominated in a single currency (like the dollar) and most of your liquidity is stored in banks or other institutions or instruments which expose you to “counter-party risk”, then you’re NOT well-prepared.

“Counter-party” risk simply means that your asset is simultaneously someone else’s liability.  In other words, you don’t actually possess the wealth…but merely a claim to it.  And if the person who owes you the wealth…the counter-party…fails to perform, you have nothing.

Just ask the depositors who lost huge chunks of their savings during the Cypress banking crisis in 2013.  They found out that “money in the bank” isn’t the same as money in your pocket (or safe).  In other words, having a claim to cash isn’t the same as having the cash.

So Rickards says it’s smart to have some of your wealth stored OUTSIDE of the banking system…and even outside of currency itself… in things like precious metals, art and real estate.

And as our friend Simon Black from Sovereign Man rhetorically asks, “How are you worse off by taking these precautions?

In short…you’re not.  In fact, it can be readily argued you’re MUCH better off.

However, it’s easy to get caught up in the fear, uncertainty and doubt about the future.  After all, the only thing certain about the future is that it’s uncertain.

So worrying about it to the point of paralysis is useless.  If you’re not going to do anything anyway, you might as well eat, drink and be merry.

BUT…

Every day of our lives we routinely take precautions against potentially catastrophic events…including wearing seat belts, looking both ways when crossing the street and (at least for some people) exercising and eating well to stave off illness.

However, when you’re in an unfamiliar environment where you might not be as readily aware of the risks…like on an airplane, in a factory tour, or on a firearms training range…you count on more experienced people for critical safety guidance.

As a financial insider, Jim Rickards is far more aware of the dangers lurking in the financial system than the man-on-main-street real estate investor.  And he’s saying there’s a high probability of stormy weather ahead.

Of course, it’s always up to you whether or not you care to heed the advice.  But step one is being aware of the potential danger.

So when it comes to your personal wealth…and all the efforts you put into building and protecting it…we think it makes sense to pay attention to a guy like Jim Rickards.  We are.

Because if Rickards is right and the dollar is truly vulnerable…or worse, actually under a current attack (and we think it’s EASY to make that argument simply based on the daily headlines)…then putting the effort into preparing yourself might just be one of the best investments you ever make.

Listen Now: 

  • Want more? Sign up for The Real Estate Guysfree newsletter and visit our Special Reports library.
  • Don’t miss an episode of The Real Estate Guys™ radio show.  Subscribe to the free podcast!
  • Stay connected with The Real Estate Guys™ on Facebook!

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed.

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