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

 

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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 dos and don’ts of dealing in precious metals
  • Which products Dana recommends and why
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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.
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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 – Nov 1-4, 2019

The 45th 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™)!

 

November 1-4, 2019

 

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.

 

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!

 

November 1-4, 2019

 

Simply fill out the form below to get registration details

and save your seat TODAY!

When registering, use code: FREEGOLDCLUB for a free gold club upgrade ($189 value)

 

 AFTER you register, use our FEEDBACK page to TELL US …

and we’ll put you on our VIP party invitation list!

 

 

“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.

Alan Greenspan’s Shocking Confession

The Real Estate Guys™ just returned from the New Orleans Investment Conference where we (and some of our listeners) had a chance to hear from the Maestro himself, Dr. Alan Greenspan.

The Real Estate Guys Radio Show host and several listeners with former Fed chairman Alan GreenspanIf you’re a long time follower of The Real Estate Guys™ radio show and blog, you know we pay close attention to the Federal Reserve because of it’s strong influence on interest rates, the value of the dollar, and asset prices (like real estate).

In fact, many economists and market pundits believe Alan Greenspan’s policies when he headed up the Fed (1987 to 2006) led to the real estate boom and ultimate bust in 2008.

Coming into the conference, we’d heard rumors that Greenspan was singing a strikingly different tune…about a great many things…than when he was at the helm of the most powerful financial institution on the planet.

Now it should be plainly obvious that Fed policy is hugely important to everyone who owns an asset, runs a business, earns a paycheck, has a savings account or pays on a loan.

So now that he’s on the outside, knowing exactly how it works on the inside, what is Alan Greenspan saying today about the Fed, the dollar, the future of interest rates, and what investors can and should do?

First, he says the bond-buying program known as QE didn’t help the “real economy” (i.e., jobs for the middle-class, real wage growth, or increasing purchasing power and consumer demand).

However, he admits QE did boost asset prices.  So stocks, bonds and real estate are all artificially higher because of easy money.

In other words, the Fed helped the rich get richer, while doing nothing for the middle-class and poor.

But as if THAT admission wasn’t enough, the Wall Street Journal’s article covering Mr. Greenspan’s speech to the Council on Foreign Relations on October 29th said this:

“He also said, ‘I don’t think it’s possible’ for the Fed to end its easy-money policies in a trouble free manner.”

Shortly after Greenspan’s comments, the Fed announced the end of its bond-buying program known as Quantitative Easing (QE).

Does this mean trouble is coming?

(Before you hit the panic button, remember that the flip side of every problem is an opportunity, so “trouble” is usually only bad for the unprepared…)

As real estate investors, not only do we care about jobs, wage growth and purchasing power (after all, it’s hard for unemployed poor people to pay rent), but we also care about interest rates.

So what does Alan Greenspan have to say about the future of interest rates?

Alan Greenspan says it's a good time to by goldBack to the Wall Street Journal article…

“He said the Fed may not even have that much power over the timing of interest-rate increases.”

“‘I think that real pressure is going to occur not by the initiation of the Federal Reserve, but by the markets themselves,‘ Mr. Greenspan said.”

What does THAT mean???

We’ve covered this in detail in previous blogs (just search our site for “Fed”), but the short of it is that without the Fed using QE to create demand by bidding (and buying) U.S. bonds, someone (the market) is going to have to step up and buy them…because if they don’t, the lack of bidding will cause bond prices to drop.

And when bond prices drop, interest rates rise.  So if the markets don’t bid strongly enough on bonds, then no matter what the Fed says, the markets will decide when and how much interest rates rise.

In other words, how the market feels about the quality of the debt (the likelihood of being repaid) AND the quality of the currency the debt is denominated in (purchasing power) makes a BIG difference in what yield investors will demand from the borrower.

Right now, investors still consider U.S. Treasuries as “safe”.  That is, there’s very little probability of default…in spite of past political posturing over debt ceilings. That’s because the Fed can print as many dollars as it takes to pay off the debt.

But when that happens, it reduces confidence in the dollar itself (the quality of the currency).  Because just like when a company issues more shares of stock against the same earnings and assets, the value of each share (in this case, dollar) is diluted.

Real Asset Investing - How to Grow and Protect Your Wealth Against a Falling DollarAs we chronicle in our special report, Real Asset Investing – How to Grow and Protect Your Wealth in the Face of a Falling Dollar, there’s already been substantial moves away from the dollar and dollar denominated assets and trade.

China has signed bi-lateral currency swap agreements with virtually every major country, which essentially facilitates their international trade without having to use dollars.  And China is the world’s second largest economy to the U.S….and closing fast.

Meanwhile, China and Russia have been stocking up on gold as fast as they can.  It seems they’d rather hold their savings in a tangible asset versus a paper asset…like the U.S. dollar or dollar denominated Treasuries.

And what does Alan Greenspan have to say about gold?

Back to the Wall Street Journal article….

“Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.”

It seems Alan Greenspan is a fan of real assets.  He sounds more like Jim Rickards (author of The Death of Money) than a former chairman of the Federal Reserve.

Yet gold tanked after the Fed quit QE!  And other real assets like real estate and oil have also been sliding.

So is Greenspan wrong…or does he know something is coming that will change the value of the dollar?

It seems that Greenspan is warning us that interest rates are likely to rise before the Fed is ready.  And if that happens, the Fed is likely to get back in the bond buying business to stop it.  Peter Schiff says there will be more QE programs than Rocky movies.

And every time the Fed exits QE, only to come back and do it again…and again (remember, this was QE3 with an Operation Twist thrown in between 2 & 3 for good measure), at some point the world loses faith in the dollar.

When THAT happens, interest rates go up, the dollar falls, and real assets like gold, housing, farmland and energy will be in demand…not just for their utility, but for their ability to retain value as currencies like dollars, euros and yen fail.

Fortunately, real assets are on sale right 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.

10/4/14: Tracking Trends in Commercial Real Estate and the Broader Economy

According to our expert guest David Lynn PhD., commercial real estate is recovering nicely and is a leading indicator of economic recoveryCommercial real estate can be a leading indicator of broader economic trends…especially employment, which is very important to real estate investors.  Because when businesses are optimistic, they lease space to house more people and accommodate growth.
Likewise, when businesses are pessimistic, they don’t add space, renew leases or accept rental increases (important if you’re the commercial landlord!).

But whether trending up or down, commercial real estate provides an indication of the sentiment of businesses.  And because rents and salaries (which pay residential rents) are derived from profits, what’s good for business is good for landlords.

So to find out which way the wind is blowing, we visit with not one, but TWO super smart guys who spend lots of time tracking trends and making big money investment decisions.

Voicing their perspectives on this episode of The Real Estate Guys™ radio show:

  • Your trendy host, Robert Helms
  • His broad co-host, Russell Gray
  • Expert guest and real estate investment strategist, David Lynn PhD.
  • Returning guest, CEO and investment strategist for U.S. Global Investors, Frank Holmes

David Lynn sets the tone early noting that “the demise of retail and office real estate is greatly exaggerated.”  So right away we get the feeling this is going to be an upbeat show.

He explains that commercial real estate has been “recovering nicely” and points out there isn’t an over-supply of properties in the market relative to demand.David Lynn PhD tells us that commercial real estate is trending up

So, as the economy and employment improve, it brings a demand for commercial real estate.  And because there isn’t an over-supply, the demand (aided by cheap financing) helps push up prices.

That’s GREAT news…if you happened to buy commercial real estate when it was in the dumper.

(Note to self:  Buy stuff when it’s on sale.)

But it’s also great news now, because the increasing demand is a symptom of an improving economy.

So even if you’re a residential real estate investor, an increase in the demand for commercial space indicates businesses are are growing more confident in their future. This can mean more jobs and bigger paychecks could be on their way.

To which we say…bring it on!

David also reminds us that corporations are sitting on HUGE amounts of cash.  So unlike the rank and file consumer, businesses have war chests of capital to pour into growth…once they believe the timing is right.

David says cash on corporate balance sheets are a “coiled spring” waiting to release its energy into commercial real estate.

He also brings up another source of capital that’s starting to pile into commercial real estate:  money from overseas.

Because while many American investors are a little frustrated with the pace of economic recovery and some of the monetary policy in the good ‘ole USA, foreigners still look at the US as a safe haven….just take a look at the strength of the U.S. dollar.

More than that, foreigners like U.S. real estate.  And even though, as Americans, we like to diversify outside the U.S., it doesn’t mean we’re down on U.S. real estate…far from it!  This simply highlights how global real estate investing has become for everyone…no matter where you’re based.

And speaking of global investing…

US Global Investors CEO Frank Holmes gives us his comments on trends he sees in the the dollar, oil, precious metals, real estate and stocksNext to chime in on economic trends is returning guest, Frank Holmes.

Frank is the CEO and chief investment strategist for U.S. Global Investors, an award winning family of managed funds out of San Antonio, Texas.

Frank’s not a real estate guy (at least not in the way we think of a real estate investor), but he’s a very sharp economic mind and he closely watches global economic trends.  As we’ve already alluded to, there are important links between economic strength and real estate.

Frank believes that falling oil prices will be positive for real estate because lower energy costs mean more income is available to go into rent, whether it’s an apartment dweller or a big manufacturing plant, distribution center or office building.

As far as the dollar’s recent surge, Frank thinks the greenback is ready for “a breather”.  If that’s true, it should provide a boost for gold and silver.

In fact, we specifically ask Frank about metals (precious and otherwise), and he tells us to pay attention to China, which he describes as “the 800 pound gorilla”.

Franks says if China’s demand increases, it will push metals prices up.  If not, then just the opposite.

So why should real estate investors care about metals?

First, metals (like other commodities) go up and down in relation to the strength of the dollar, in addition to responding to basic pressures from supply and demand.   So, metals that are used in the construction of real estate (from nails, to rebar, to girders, to wiring, to appliances and HVAC), affect the cost of construction.

And for those investors who have diversified their liquid assets to include not just cash, but monetary metals as well, the last year has been a little stressful…at least if you’re prone to measuring your wealth in dollars (as opposed to number of rental units, ounces of gold, etc.).

So if China continues to build up their gold reserves (which they’ve been aggressively doing for the last couple of years), at some point the demand for physical metal will overwhelm the paper metal (derivatives) market, and put upward pressure on prices.  So if you’re holding gold, or accumulating it while the pricing is soft, then this could be welcome news.

In closing, Frank also believes interest rates will remain low for the foreseeable future.  Of course, interest rates are a topic of great interest (no pun intended…okay, it was intended) to almost all real estate investors because debt is one of our favorite tools.

Bottom line:  The overall sentiment from both of our expert guests is positive, which is a trend we’re happy to see continue. 🙂

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

12/29/13: Thinking Outside the Buck – How Savers Can Avoid Being Losers

Robert Kiyosaki says, “Savers are losers”.   Does this mean you should consume more than you produce, or that saving is bad?  Of course not.

There are multiple meanings to the Savers are Losers concept.  In addition to drawing a distinction between working for money (saving) versus having money work for you (investing), there’s the problem of money versus currency.

As real estate investors, we put a lot of time and effort into “making money”.  And while it’s fun to consume, most of us create profits with the idea of accumulating and storing wealth…at least temporarily until the next great investment comes along.

The challenge comes when the vehicle we use to store the value of our profits (paper currency) is being consistently devalued by its issuer.

With central banks (like The Federal Reserve) around the world “printing currency” at unprecedented rates, everyone doing business in currency (like the dollar) is affected.  And the dollar has the greatest effect of all because it’s used globally as the world’s reserve currency.

So while most folks are simply simply focused on how to earn and accumulate more money, we thought it would be a good idea to think about what “money” is, and whether the dollar is the best or only vehicle to use as money.

So put on your golden thinking cap, and get ready to think outside the buck…

Sitting behind The Real Estate Guys™ silver microphones for this episode:

  • Your precious silver-tongued host, Robert Helms
  • His generic round co-host, Russell Gray
  • Special guest and golden boy, Anthem Blanchard

As real estate prices rise (denominated in dollars) and equity happens, real estate investors are going to be the proud owners of bulging balance sheets.  Finally!

Of course, we’ve seen this movie before, so while we enjoy booms, we’re very aware of the boom / bust cycle that is inherent in an unsound money system. If you don’t know what that means, don’t worry about it for now.  Just remember that there are booms and busts (ups and downs), and when a market is booming, you ride it up.  Along the way, you’re extracting profits and storing them up for the next bust, so you can go out into the wreckage and snap up bargains.

So as prices rise and lending comes back into the market, investors will have the ability to realize profits (through sales) or extract equity (through refinancing).  Even buy and hold investors (presuming positive cash flow) will be stacking up dollars because the more properties you own, the more cash reserves and operating “float” you hold.

Most people hold this cash in currency, like dollars.  In fact, for most people, dollars are the ONLY measurement of wealth.

But thinking outside the buck, we wonder if it might make sense to store a percentage of those profits and reserves in something other than currency?

After watching the “bail-in” that victimized savers in Cypress last year, the concept of “counter-party risk” changed our perception of risk when dealing with banks.  Especially considering the miniscule reserves held by the FDIC against the huge amount of bank deposits insured.  We already know banks can fail because hundreds did during the Great Recession.  What if the insurer fails?

Soif money in the bank isn’t as safe as…well, money in the bank…then where can you store wealth until you’re ready to use it again?

And even if money in the bank is safe from the bank failing to return it (counter party risk), what happens if when the bank returns it, it isn’t worth as much as when you deposited it?  Think about putting $5 in a bank account in 1965 when gas was 25 cents a gallon.  For five bucks, you could fill up a 20 gallon gas tank!  That’s a lot of driving!

But today, $5 won’t buy you 2 gallons of gas.  So even if the bank gives you your five dollars back, it’s lost its purchasing power.  This is what many baby boomer savers are discovering as the try to sail off into their golden years.  They have more money than they’ve ever had, but it won’t buy as much.

So we sit down to talk with Anthem Blanchard, who literally grew up in the precious metals business.  His father, James Blanchard, was a pioneer in restoring Americans’ right to own gold.  For you young folks out there, you may not know that from 1933 until 1971 is was illegal for U.S. citizens to own gold.

Really.

It’s a long and sad story, but the short of it is that when the U.S. was founded and for most of world history, gold and silver were regarded as “money”.  And dollars were just paper coupons redeemable for real money (gold and silver).  But in 1933, the U.S. decided it was bad for people to own gold, so they made it illegal.

The reason that happened is at the heart of the challenge faced by savers today:  governments wanted to spend more money than they have.  Shocker. And it’s obviously going on today in record fashion.

So alert investors are looking for alternatives.  In fact, it’s gotten so bad that even consumers are looking for alternatives.  There’s a reason Bitcoins are gaining so much popularity.  It’s a currency that isn’t controlled (yet) by government.

The fact that Bitcoins are creating such a stir tells you that people are concerned about the dollar.  And it isn’t convenience.  Because while tech is cool, dollars are effectively virtual too.  Just think about credit cards, debit card, wire transfer, online payments, etc.  All digital.

The issue with Bitcoins are they aren’t real and they don’t have government backing.  We’re not here to put down Bitcoins, but compared to the thousands of years of human history with gold and silver, we’d rather look to precious metals as an alternative to dollars for storing and transporting wealth.

Of course, because metals are tangible, they aren’t easy to use in commerce.  But that’s changing!

Just as innovators came up with Bitcoins as an alternative to the dollar, creative entrepreneurs are coming with technologies to make using precious metals more convenient.  Anthem Blanchard is one of those innovators.

So listen into this edition of The Real Estate Guys™ radio show as we discuss precious metals as an alternative to the dollar for the long term storage of wealth, and how technological innovations can make the use of precious metals in daily commerce less expensive and more convenient.

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If you like this topic, be sure to check out our special report: Real Asset Investing – How to Grow and Protect Your Wealth Against a Falling DollarClick here to request now.

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