Tariffs, Trade Wars, and Crash Talk with Jim Rogers and Peter Schiff

Freedom Fest is a crazy collection of different mindsets and ideas … and that’s why we make it a point to attend as often as we can.

In this episode of The Real Estate Guys™ show, we talk to two fellow Freedom Fest attendees about their thoughts on the economic and political realities of the world we live in.

These two guests have earned the right to have an opinion … and today, they’ll help us understand their thoughts on the bigger picture and how that picture affects YOUR investing business.

You’ll hear from:

  • Your thinking-ahead host, Robert Helms
  • His crashing co-host, Russell Gray
  • Legendary investor Jim Rogers
  • Finance pro Peter Schiff

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Broadcasting since 1997 with over 300 episodes on iTunes!

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Why YOU need to understand the economy

Peter Schiff has taught us that economics and politics are intertwined. Policy effects the economy … and vice versa.

There’s a lot happening in the wider economic world that affects investors on Main Street. Realizing that has affected our decisions as The Guys … from the events we attend each year to the way we structure our annual Summit at Sea™.

Friends and mentors like today’s guests help us understand the economic systems at work in the U.S. and around the world … and how those systems affect what happens in the financial headlines.

Speaking of headlines, you won’t hear these gentlemen very often in mainstream financial media because they don’t fit the narrative the media wants to tell … which is that an upward trajectory can continue forever.

As we know, anything involving money follows a cycle of ups and downs … and we’re in the midst of the longest economic recovery EVER.

There’s no doubt that at some point, we WILL hit a downturn. But there is good news … those who prepare for impact can thrive, even during bad times.

Words of wisdom from Jim Rogers

Legendary investor Jim Rogers co-founded the Quantum Fund with George Soros.  

We were honored to talk to him about what it takes to be an investor in changing times.

“You have to be open to change,” says Jim. To anticipate future changes, you have to realize the world WILL change. And it takes work, he says.

So how can we prepare? “When everyone’s exuberant, you should be worried,” Jim notes. “That means they’re not thinking.”

(Hint, hint: consider the current market.)

Jim has written several books. His most recent is called A Gift to My Children.

Although Jim didn’t originally want kids, he found out he was wrong once he had his own children. These days, he is always thinking of what he wants to teach his kids.

That’s what the book is about … the lessons he has learned in investing and in life, for his kids … and yours.

We also asked Jim for his thoughts on cryptocurrencies. He said, “Blockchain is going to change everything we know.”

That means a lot of people being put out of business … but it will also CREATE a lot of new businesses. So don’t worry.

We can translate that same idea to the broader economic world. You’ve got to go through a downturn to get to an upturn.

Jim reminded us that the Chinese word for crisis, weiji, means both danger and opportunity.

Speaking of China … that’s where Jim lives. He decided to move to the other side of the world to make sure his children grew up speaking Mandarin … they’re now fluent.

“China’s going to become the next great country,” he says.

Peter Schiff offers a voice of reason

We also enjoyed chatting with financial guru Peter Schiff. He has attended every Freedom Fest except one … and that was because his child was due.

Before the ’08 financial crash, Peter was a voice of reason. He maintained that the economy wasn’t great … everyone just thought it was.

The booming economy pre-crash was based on a bubble of appreciation, consumption, and inflated prices. People were deceived because it seemed like good news was around every corner … so they weren’t prepared for the bubble to pop.

As opposed to the bubble in ’08, our current bubble hasn’t provided boosts to the large majority of people, says Peter. We’ve just barely reached pre-recession levels.

So, why do these economic bubbles happen? It’s a result of what Peter calls “stag-flation” … stagnation PLUS inflation.

Subscribers to Keynesian economics believe unemployment causes inflation, so the idea that employment AND inflation could rise at the same time seemed impossible.

But inflation is caused by an expanding money supply, not expanding prices.

And the thing that keeps prices in check is the supply of products. Having a lot of stuff bolsters a strong economy and keeps a lid on pricing.

Scarcity is what leads to high prices.

Inflation in the 1960s happened because of policies from earlier decades, says Peter … high spending, high levels of borrowing, and the government’s decision to go off the gold standard.

According to Peter, today’s monetary policy is MUCH WORSE than anything that happened in the 60s and 70s.

And our economy is less secure … so we can’t just raise interest rates when things get bad.

Everybody is exposed, says Peter … because everyone has more debt and interest rate risk than ever before.

The Fed doesn’t want to think massive inflation is possible. “But it’s the problem you don’t see coming that gets you,” Peter notes.

The next crisis “will be bigger and will be worse.”

Peter talks tariffs and trade wars

People are excited about tariffs on China … but they shouldn’t be, according to Peter. “We derive the most short-term benefit from trade,” he says. “We have the most to lose.”

The problem is not the federal deficit … it’s the economy. When deficits pile up, we destroy our wealth, and right now we have HUGE trade deficits because of our fiscal policy.

We also have tax and regulatory codes that make American businesses less competitive.

But trade deficits offer us two BIG benefits.

First, we are getting a ton of REAL products … and it costs us nothing, because we can produce or borrow those dollars out of thin air.

Second, when the Chinese recycle those dollars, they buy U.S. treasury bonds.

So trade deficits mean prices are lower and interest rates are lower.

If Trump is successful on tariffs, Americans will have higher prices, higher interest rates … and a lower standard of living.

Tariffs “will make us the losers in the short term,” says Peter. They’ll also exacerbate any recession that happens.

We talked with Peter about one more thing … why investors should consider gold and international assets.

When we spoke, gold and silver prices were down. “That’s the flip side of optimism,” Peter says. “Optimism is not buying gold, because people usually buy gold when they’re worried, and people aren’t worried right now.”

“When no one is worried is when YOU should be worried,” Peter says.

Gold is more valuable now than it was in 2011, says Peter … but it’s also cheaper.

He told us there’s tremendous potential in gold mining stocks, as well as international assets.

Investors should look for where money will go when it flees the U.S. … and try to invest there before the economy crashes and there’s a stampede.

Remember, you can make 10 times the amount you invest … but you can never lose 10 times the amount. You can only lose what you put in.

For more from Peter, check out the Peter Schiff Podcast.

Get educated

Peter and Jim have a different way of looking at the world … and that’s a good thing.

If you’re learning some of their concepts for the first time, we wouldn’t be surprised if you’re a bit lost. That’s okay.

We encourage you to keep seeking out knowledge and multiple perspectives … so you can make informed decisions and be prepared for the future.

One great resource to consider is our Future of Money and Wealth video series.

We realized our conference speakers had a WEALTH of information to offer … so we decided to share it with YOU. This video series is great for beginners and long-time investors alike.

Remember … you can’t take effective action without education!


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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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 …

Robert Kiyosaki on the Financial System, Fake Teachers and Real Assets

This summer, we spent time at events like Freedom Fest and the Red Pill Expo … where we bumped into some of our mentors and friends … folks like Peter Schiff and Robert Kiyosaki.

It’s not by accident we keep running into the same people. These folks all have the same desire … to read between the lines and find the TRUTH about what’s really happening in the world. And they don’t jump to conclusions.

Robert Kiyosaki has helped us see both sides of the story for decades. This time around we chat with him about his views on the financial system, fake teachers, and the importance of real assets.

In this episode of The Real Estate Guys™ show you’ll hear from:

  • Your very real host, Robert Helms
  • His faking-it co-host, Russell Gray
  • Best-selling financial author Robert Kiyosaki

Listen

 


Subscribe

Broadcasting since 1997 with over 300 episodes on iTunes!

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Get a REAL education

We spoke with Robert Kiyosaki at Freedom Fest. “I come to learn,” he says.

Freedom Fest and similar events … like the New Orleans Investment Conference are like a mental gym. “They challenge the way I think,” says Robert.

That’s one reason educational events are so important (like our Future of Money and Wealth webinar series, which features talks by Robert and many more financial gurus).

REAL education is more than just listening to the salespeople. It’s getting outside your cocoon and seeking out new information.

Invest in your PASSION

One idea Robert thinks is really essential in the investing business is to invest in what you love and enjoy. “I do think real estate is the best,” says Robert … that’s why it has been his bread and butter for years.

But maybe avocadoes are your passion … in that case, perhaps you should consider investing in an avocado farm.

You should always do your due diligence and work with a good financial planner … but investing in your PASSION will always be more successful than investing in something you’re “meh” about.

REAL assets, REAL money, and REAL teachers

“We don’t have a prayer as long as we’re working for money,” says Robert. He believes investors should steer away from money … in favor of REAL assets.

Investors should also surround themselves with REAL professionals … those who’ve done their research and know what they’re talking about.

A lot of people are in trouble because they’re learning from FAKE teachers, says Robert … people who don’t have a real conception of cash flow.

Two other things investors should be aware of … FAKE money and FAKE assets.

Be wary of a monetary system that isn’t backed up (by gold, for example), and don’t rely on traditional assets, Robert advises.

If you’re doing everything “right” … working a 9-to-5 job, putting money in your 401k, investing in stocks … you’re being screwed by the system, says Robert.

SMART investors have to learn to work WITH the system.

For more on FAKE versus REAL, check out Robert’s upcoming book FAKE, which will be released as an entirely digital series.

REAL talk about our financial system

Central banks control paper money … and that’s dangerous, says Robert. He cites people like Jim Rogers, who believes we’re headed for the worst crash yet because we have an abundance of printed money and debt.

“Tragedy follows printing money,” says Robert.

But it doesn’t matter how bad the system is … what matters is the actions YOU take. We like to say BE the Fed … don’t BEAT the Fed.

That means figuring out how to make the most of our financial system … knowing the tax laws and figuring out how to make them work for you.

“The next collapse will look like something we’ve never seen before,” says Robert.

But investors don’t have to be scared … if they prepare for the inevitable BEFORE it happens.

We talked with Robert about digital currencies, like Bitcoin. “Gold and silver were here before us and will be here forever,” says Robert.

But investors need to look at real assets (like property and gold), cybercurrency, AND paper money when they’re investing … because they’re the three big components of our current monetary system.

Smart investors work to figure out what is real and lasting.

For more from Robert Kiyosaki, read the classic book Rich Dad Poor Dad … if you haven’t already. And check out the Rich Dad Radio Show.

A REAL financial expert

Robert has been studying the financial system forever. He remembers the history of money and has watched the financial system change.

As we often say, “Those who fail to remember history are doomed to repeat it.”

You HAVE to understand financial fundamentals and the structure of our financial system before you can read the news and really SEE between the lines.

Like Robert says, a crash is highly likely … we can’t predict WHEN it will happen, but we CAN hedge against the eventuality of it.

Get educated … so you can stay on top of the wave when the tsunami comes.


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.


Love the show?  Tell the world!  When you promote the show, you help us attract more great guests for your listening pleasure!

Don’t get lost in the lag …

Investors and economists often talk about cycles … business cycles, credit cycles, even news and legislative cycles.

Cycles are the ebb and flow of causes and effects sloshing around in the economic sea we all swim in.  They’re big picture stuff.

For nose-to-the-grindstone Main Street real estate investors, cycles are barely interesting, seemingly irrelevant, and mostly boring.

But a danger for Main Streeters is not seeing something dangerous developing on the horizon.  Another danger is getting lost in the lag.

The lag is the gap between when a “cause” happens and when the “effect” shows up.

For example, in a typical supply-and-demand cycle, a shortage of homes could cause prices to spike.    The effect of the supply-demand imbalance is higher prices, which in turn becomes a new cause.

Rising prices causes builders to increase production … and existing property owners to put their homes on the market … thereby increasing supply.

As supply grows, price escalation slows. If supply overshoots demand, prices might actually fall.  If you’re structured for only rising prices, you might have a problem.

Of course, there are other factors affecting pricing such as interest rates, wage growth, taxes, labor and material costs, availability of developable land, and on and on.

But our point is … an amateur investor often doesn’t see the cause for price escalation (or anything else) until the effect happens.

Once prices rise, they jump in to ride the wave … believing prices will go up tomorrow because they went up yesterday …  and their speculation only adds to the demand and fuels the fire.

At least for a while …

What’s often overlooked is the production pipeline … until the supply shows up and softens pricing.  Near-sighted investors often get lost in the lag.  They’re not sure where they are in the cycle.

It’s what happened to “GO Zone” investors after Katrina and Bakken investors during the shale boom.

Folks bought in during a boom, not considering the “production lag” … and didn’t structure for a slowdown.  When it happened, they didn’t have a Plan B.

It’s a simple example … and before 2008, that was about as deep as our analysis ran.

But the pain of 2008 opened our eyes … and 10 years later they’re still as wide open as we can keep them … because we know there are cycles as sure as the sun comes up.

That knowledge isn’t bad.  In fact, it’s good.  Because when you see the bigger picture, you also see more opportunity.

So we study history for lessons … current events for clues … and we talk with experts for different perspectives.

It sounds complicated … and maybe it is a little … but it’s like the old kids’ game, Mousetrap.

There’s a lot of fancy machinery hanging over our heads …and it’s just a series of causes and effects.  “A” triggers “B” triggers “C” and so on … until it’s in our faces.

But even at the street level with our nose on the cheese, if we watch the machinery, we can see events unfold and still have time to react appropriately.

So let’s go past a simple supply-and-demand example.

Back in 1999, Uncle Sam decided to “help” wannabe homebuyers get Fannie Mae loans … so the government lowered lending standards and pushed more funds into housing.  It seemed like a nice thing to do.

But at the time, observers cautioned it could lead to financial problems at Fannie Mae … even to the point of failure.  It took nine years (lag) … but that’s exactly what happened.  Fannie Mae eventually failed and needed a bailout.

But before things crashed, it BOOMED … and people made fortunes. We remember those days well.  It was AWESOME … until it wasn’t.

Folks were profitably playing in the housing jumphouse from the time the easy money air pump switched on until the circuit blew.  Lags can be a lot of fun.

Because few understood why the party started and why it might end … most thought the good times would roll forever.  So they were only structured for sunshine.

Oops.

People who urged caution at the height of fun … like Peter Schiff and Robert Kiyosaki … were derided as party-poopers.

Of course, they both did well through the crisis because even in the boom they were aware of the lag and the possibility of a downturn … and were structured accordingly.  Smart.

Now, let’s go beyond supply, demand, and mortgages … and look even further up the machinery …

In late 2000, Congress passed the Commodity Futures Modernization Act of 2000.

Doesn’t sound like it has anything to do with real estate … BUT …

This was the birthplace of unregulated derivatives … like those infamous credit default swaps no one in real estate ever heard of …

… until they destroyed Bear Stearns and Lehman Brothers in 2008, while bringing AIG to the brink of bankruptcy, and nearly crashing the financial system.

This mess got ALL over real estate investors in a big and painful way … even though there was an 8 year lag before it showed up.

Remember, for those 8 years a lot of the money created through derivatives made its way into mortgages and real estate … adding LOTS of air to the jumphouse.

Back then, real estate investors were riding high … just like today’s stock market investors.

And those who only measured the air pressure in the jumphouse … ignoring other gauges … didn’t see the circuits over-heating … until the system failed.

Then the air abruptly stopped, the inflated markets quickly deflated, and the equity-building party turned into a balance-sheet-destroying disaster.

And it happened FAST.

Which bring us to today …

The Atlanta Fed recently raised their GDP forecast for the booming U.S. economy.

Stock indexes are at all-time highs.  Unemployment is low.  The new Fed chair says, “The economy is strong.”

Some say these are the effects of tax cuts and a big spending bill.

Makes sense … because when you measure productivity by spending, when you spend, the numbers move.  Spending, or “fiscal stimulus” is an easy way to goose the economy.

But some are concerned this is a temporary flash fed by debt and deficits.

Others say it’s fiscal stimulus done right … kindling a permanent fire of economic growth and activity.

Could be.  After all, Trump’s a real estate guy, so he understands using debt to build or acquire long-term productive assets.

Real estate investors know better than most that not all debt and spending are the same.

Of course, government, geo-politics, and a national economy are a much different game than New York City real estate development.

And there are certainly some cracks showing in all these strong economic numbers …

A strong U.S. dollar is giving emerging markets fits.  Home buyingbuildingappreciation, and mortgages are all slowing.

We’re not here to prognosticate about what might happen.  Lots of smart people are already doing that, with a wide variety of opinions.

We just keep listening.

Our point today is … there’s a lag between cause and effect smart investors are wise to consider.

When lots of things are changing very fast, as they are right now, some are tempted to sit out and see what happens.  Probably not smart.

After all, the air in the jumphouse could last a while.  No one likes to miss out on all the fun.

But others put on sunglasses, toss the umbrella, and go out and dance in the sunshine … without watching the horizon.  Also not smart.

Dark clouds could be forming in the distance which might quickly turn sunshine into storm.

The best investors we’ve met take a balanced approach … staying alert and nimble while enjoying the sunshine, but not getting lost in the lag.

Changes in economic seasons aren’t the problem.  It’s not seeing them coming and being properly prepared.

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.

Cover Your Assets Part 1 – Protecting Your Wealth Today and Tomorrow

An essential element of real estate investing is protecting the assets you’ve worked so hard to acquire.

When you’re just starting out, your investment business is pretty low liability. But as you acquire properties, the liabilities build up … and a legal problem with one property could cascade and affect your other assets if you don’t have the proper protections in place.

In this show, we’ll talk with a Rich Dad advisor on how to sort your assets into buckets so you NEVER lose everything at once.

Part one of this two-part series is for beginners and experienced investors alike. As John F. Kennedy said, “The time to repair a roof is when the sun is shining.” NOW is the time to put in place protections to keep you safe if troubles arise.

In this episode of The Real Estate Guys™ show you’ll hear from:

  • Your host, asset Robert Helms
  • His liability of a co-host, Russell Gray
  • Garrett Sutton, best-selling author and legal advisor to Robert Kiyosaki

Listen


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Firewall your assets

The society we live in is very litigious … and that’s not going to change any time soon. So what can investors do?

We talked to Garrett Sutton about precautions YOU can take to protect your assets as they grow.

Your best option, Garrett says, is probably an LLC, simply because they provide the best asset protection. An LLC allows you to firewall your assets so one lawsuit doesn’t set off a chain reaction that leaves you asset-less.

Why is an LLC better than a corporation? Besides better asset protection, LLCs offer more tax flexibility and charging order protection.

Charging orders are legal judgments that allow creditors to access the money you make through your business. But some states offer charging order protection to LLCs.

And, Garrett says, most lawyers prefer to go through insurance so they can collect right away. So ideally investors have two firewall protections … an LLC or corporation AND insurance to back them up.

Some states, like Utah, California, and New York, don’t provide great asset protection for LLCs. Creditors can blow through the LLC and force the sale of assets … not ideal.

What can you do if you live in a state that doesn’t have the best rules for entities? Garrett reminds us you DON’T have to form an entity in the same state as your property or your residence.

How to set up your own LLC

While setting up an LLC may sound onerous and difficult, Garret says it’s really not that hard. There are two main steps:

  1. Set up an LLC in the state you want.
    1. Pick a name and make sure the name is available
    2. File your articles of organization, operating agreement, and certificates.
  2. Transfer the title of your property into the name of your LLC. This is NOT a sale … simply a transfer.

While there are plenty of websites advertising do-it-yourself LLC help, it’s much better to talk to an attorney, says Garrett.

A certified legal professional can walk you through all the steps and help you understand which business decisions are right for you.

And, an attorney will help you stay aware of formalities … the easy-to-follow rules that will keep your LLC safe from legal troubles.

Fine-tune your asset protection strategy

Garrett is a best-selling author. His books on starting your own corporation or LLC cover the strategies and techniques YOU can use to increase wealth and reduce risk.

A technique SOME people use is changing their LLC from partnership taxation to C or S corporation taxation.

That’s fine, says Garrett … as long as you don’t forget to amend your operating agreement.

Business decisions as simple as tax changes have many permutations we don’t even think about … another reason an asset protection attorney is essential.

Other investors are looking into offshore asset protection trusts. Something some investors don’t realize is that more than 10 states have created onshore trusts. But while these trusts make your money bulletproof, recent cases have demonstrated that it’s only bulletproof in the state where you’ve set up the trust.

Although there are many tricks for upping your protection level … and your wealth … investors don’t need 17 layers of LLCs.

They also don’t need to spend a ridiculous amount of money to form an LLC. For example, a Wyoming LLC provides great protection levels, for only $50 a year (plus any legal fees).

And LLCs don’t mean you’re locked into operating decisions. You have the latitude to make changes. LLCs are flexible!

Interested in delving deeper into the legal realm of asset protection? Delve into what Garrett has to offer on his website.

And while Garrett provides affordable asset protection and legal services, that doesn’t mean you shouldn’t seek out your own legal help … just make sure the people you work with are serious about helping small investors stay on top of corporate formalities.

In part two of our asset protection series, we’ll delve deeper into the legal world with a discussion of offshore asset protection strategies. Listen in for info on taking your profits outside of the States!


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.

Lessons from Facebook’s face-plant …

No doubt you’ve heard Facebook’s stock face-planted recently. But just in case, here’s the whole gory story in just three headlines over five days …

Facebook stock hits record high ahead of earnings – MarketWatch 7/25/18

Investors … continue to shrug off … gaffes … with privacy and security … Chief Executive Mark Zuckerberg … said … the company has not seen an impact on the company’s top line.”

Facebook’s stock market decline is the largest one-day drop in US history

– The Verge 7/26/18

“Facebook’s market capitalization lost $120 billion in 24 hours.

Facebook’s stock set to enter bear-market territory after third straight decline – MarketWatch 7/30/18

“The stock has now fallen 22% from its record close … on July 25.”

Of course, if you’re a real estate investor this may seem like only a moderately interesting side story buried in all the news flying across your screen.

And maybe that’s all it is.

Then again, maybe there are some things to be gleaned from this epic implosion … even for real estate investors.

Lesson 1: Just because everyone else is … doesn’t mean YOU should

Your mom probably taught you that. But it’s good investing advice too. It’s never smart to be late to an equity party … or late leaving.

The so-called FAANG stocks (Facebook, Apple, Amazon, Netflix and Google) are the “must have” stocks for … just about EVERYONE.

The problem is popular assets often get bid up well past their fundamental value … as speculators jump in hoping to ride the upward trend for awhile …

… and hoping to be fast enough to get out before the trend turns.

Of course, hope isn’t a very good investing strategy.

Lesson 2: Don’t ignore problems just to keep hope alive

Notice the quote about investors continuing to shrug off bad news … ignoring the obviously developing problems at Facebook.

So when Zuckerberg comes out right before the bad news … even as Facebook’s stock was heading to a record HIGH … and says the problems aren’t affecting the top line …

… investors apparently chose to believe him, … and not heed the clues in the news that clearly showed Facebook was headed for stormy seas.

Now, investors are suing Facebook and Zuckerberg for misleading them.

But investors should also look at the big picture, and consider the motives of these who claim as is well.

Remember this classic assurance from the world’s foremost banker?

“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

Just a year later the financial system all but imploded.  But the danger signs were there …

Peter Schiff and Robert Kiyosaki were warning people. Most didn’t listen.

We didn’t. But you can be SURE we listen today.

Lesson 3: Momentum is a condiment … not a meal

With real estate, sustainable profit is all about the income.

Sure, it’s great when things get hot and people want to pay MORE for the SAME income.  But at some point, the numbers don’t make sense.

You can bad fundamentals and invest primarily because “it’s going up.” But when momentum fades, prices snap back to fundamentals.

If you’re on the wrong end of it, it’s painful.

Of course, if you see it coming, you can cash out via refinance or sale, and store up some dry powder for the soon-to-be-coming sale.

Lesson 4: Trends and indexes are interesting, but the deal’s what’s real

We have a big, diverse audience … so we talk about big picture stuff. It’s important to see the big picture.

After all, every asset you own is floating in a big sloshing economic sea.

If you’re not aware of weather patterns and watching the horizon, you might not see storm clouds and rough waters forming.

But investors make money in EVERY kind of economic environment, so it’s not the conditions which dictate YOUR success or failure.

It’s your attention to being sure each individual deal YOU do makes sense.

That means the right market, product type, neighborhood, financing structure, and management team.

Keep the deal real … and have plans for what you’d do in a variety of economic situations …

… so when conditions change you’re not caught unaware and unprepared.

“The time to repair the roof is when the sun is shining.”

– John F. Kennedy

Lesson 5: Train wrecks in stocks can be tee-up for real estate

This is our favorite.

It’s not that we take joy when the stock market reveals its true character … but we know it’s a wake-up-and-smell-the-coffee moment for many Main Street investors.

As our friends Chris Martenson and Adam Taggart recently pointed out

… if you take the FAANG stocks out of the stock indexes, the highly-touted stock index returns would have been NEGATIVE.

It’s hard to diversify when you you’re exposed to the hot stocks everyone’s piled into … directly or indirectly.

So as Main Street investors come to suspect the disproportionate influence just a few arguably overbought stocks have on their TOTAL net worth and retirement dreams …

… history says people’s hearts turn home to an investment type they instinctively understand and trust. Real estate.

So for those raising money from private investors to go do more and bigger real estate deals, a stock market scare can make it easier for your prospects to appreciate what you’re offering them.

Lesson 6: Do the math and the math will tell you what to do

Very few paper asset investors we’ve ever met actually do the math.

They either buy index funds based on trends and history, and don’t realize most are exposed to the same small group of hot stock everyone owns …

… or they buy stocks based on a hot tip, a gut feeling, or a recommendation from someone they think is smarter than they are.

But real estate math is SO simple to understand and explain.

And when you can quickly show a Main Street paper investor how a 15-20% annualized long-term return on investment real estate is quite realistic … with very moderate risk …

… real estate is the CLEAR winner.

Even a modest 3% per year price appreciation on 20% down payment (5:1 leverage) is 15% average annual growth rate.

Add to that another 2% or so a year in amortization … paying down the loan using the rental income … you’re up to about 17% annualized equity growth.

Toss in another modest 3-5% cash-on-cash and some tax benefits and you’re pushing 20% annualized total return pretty fast.

And that’s just bread-and-butter buy-and-hold rental property.

There are all kinds of specialty niches and value-add plays which allow active investors to goose returns …

… or for a syndicator to put a lot of meat on the bone for their passive investors … and still take a piece for doing the work.

Lesson 7: Monitor your portfolio for weak links and over-exposure

Lots of paper investors who didn’t even know they were exposed to Facebook are finding out the hard way …

… just like when we didn’t realize our whole investing and business model depended on healthy credit markets.

So be aware …

When you’re overly exposed to a critical factor like interest rates, credit markets, a tax law, a specific industry or employer, or even a currency or financial system

… you run the risk that a single unexpected event can take a BIG bite out of your assets.

And while you might not be able to fix everything right away, the sooner you’re aware of the risks, the sooner you can start preparing to mitigate them.

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.

Can you handle the truth?

“You can’t handle the truth!” 

 – Jack Nicholson in A Few Good Men

Neither optimists or pessimists can handle the truth.Optimists refuse to acknowledge the part of reality that’s negative …

… while pessimists can’t see the ever-present opportunities hidden behind the problems.

While we’d rather be optimistic than pessimistic, maybe it’s better to be BOTH.“The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.” 

 – F. Scott Fitzgerald 

Here are some thoughts about risk and opportunity from legendary real estate investor Sam Zell …

People love focusing on the upside.  That’s where the fun is.  What amazes me is how superficially they consider the downside.”  

“For me, the calculation in making a deal starts with the downside.  If I can identify that, then I understand the risk I’m taking.   Can I bear the cost?  Can I survive it?” 

You can only take calculated risks if you look carefully at both the upside AND the downside.

Today, the entire global financial system is largely based on “full faith and credit” … primarily in the United States dollar.

And there’s a gigantic investment industry that’s built on perpetual optimism …and a belief non-stop debt-fueled growth FOREVER is actually possible.

Even worse, the entire financial system’s fundamental structure literally REQUIRES perpetual growth to avoid implosion.

That’s why central banks and governments are COMMITTED to debt and inflation … at almost ANY cost.

But as Simon Black points out in Future of Money and Wealth 

History is CLEAR.  Empires and world reserve currencies don’t last forever.

And irredeemable paper currencies and out-of-control debt ALWAYS end badly … at least for the unaware and unprepared.

Optimists can’t see this.  So they take HUGE risks they don’t even know exist.

Pessimists can’t act.  So they miss out on the HUGE opportunities that are the flip-side of the very problems they obsess over.

Robert Kiyosaki stresses the importance of being REALISTS …

… standing on the edge of the coin, seeing BOTH sides … and then being decisive and confident to ACT in pursuit of opportunities while being keenly aware of the risks. 

We created the Future of Money and Wealth to gather a diverse collection of speakers and panelists together … to examine the good, the bad, and the ugly …

… so YOU can have more context and information to make better investing decisions. 

Chris Martenson opens our eyes to the physical limitations of long-term perpetual exponential growth which depends on unlimited supplies of clearly LIMITED resources.

Of course, as these critical resources dwindle, they’ll become very expensive as too much demand competes for too little supply.

When you see nation’s fighting over scarce resources, it’s a sign of the times.

But of course, there’s OPPORTUNITY hidden inside of crisis.

And to seize the opportunity, you must understand it … or it just sits there like a hidden treasure under your feet.

But it’s not just recognizing trends.  It’s also TIMING.  And being a lot early is much better than being even just a little late.

To beat the crowd, you can’t wait for the crowd to affirm you. 

To get timing right, it’s important YOU know what the signs are.

What does it mean when Russia dumps Treasuries and buys gold?  What caused Bitcoin to sky-rocket in 2017?  Why are there bail-in provisions in U.S. banking laws?

Peter Schiff saw fundamental problems in the financial system back in 2006 … and screamed from the rooftops that the financial system couldn’t support the then red-hot economy.

Few listened … then WHAM!  In 2008, the weakness of the financial SYSTEM was exposed … and MANY people were CRUSHED.

Peter insists the REAL crash is still yet to occur … and everything that made the financial SYSTEM weak in 2006 is MUCH WORSE today.

Yet small business and consumer OPTIMISM is at all-time highs.  The ECONOMY appears to be BOOMING … again.  And Peter’s still screaming out his warnings.

The Fed is RAISING interest rates to cool things down.  But history says EVERY SINGLE TIME the Fed embarks on a rate raising campaign it ends in RECESSION.

In Future of Money and WealthFannie Mae chief economist Doug Duncan reveals when he thinks the next recession is coming … and WHY.  We listen to Doug because he’s got a really good track record.

The 2008 crisis exposed real estate investors to the REALITY that what happens on Wall Street, at the Fed, and in the global economy … can all rain down HARD on Main Street. 

Ignoring it doesn’t make it go away.  And you’ll die of old age waiting for the storm clouds to blow away.

There will ALWAYS be risk.  There will always be OPPORTUNITY. 

It’s not the external circumstances which dictate what YOU get.

It’s really up to YOU … and your ability, like Sam Zell, to see both opportunity and risk, so you can aggressively reach for opportunity while carefully navigating risks.

Education, perspective, information, and thoughtful consideration are all part of the formula.

That’s why we created the Future of Money and Wealth video series.

Future of Money and Wealth features TWENTY videos … over fourteen hours of expert presentations and panels …

… covering the dollar, oil, gold, real estate, crypto-currencies, economics, geo-politics, the new tax law …

… PLUS specific strategies to protect and GROW wealth in the face of potentially foundation-shaking changes to the financial system.

Just ONE great idea can make or save you a fortune. 

Future of Money and Wealth might just be one of the best investments you’ll ever make.

To order immediate access to Future of Money and Wealth … 

Click here now >> 


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.

Better check that foundation …

We know a guy who bought a property with NO foundation.  He didn’t know it because he paid cash … and with no lender forcing an inspection, he skipped it.

Oops.

He figured since the property had been in use for decades, everything was fine.  But just because a building is standing, it doesn’t make it safe or sound.

Similarly, the financial system is the foundation of the economy.  Last time, we noted the U.S. economy is reportedly doing well.  Great!

But … there’s a BIG difference between a strong economy and a strong financial system.

Now before you crawl up in a ball and go full fetal, remember … bad times are good times for the informed, connected, and prepared.  That’s why we do what we do.

So let’s dig a little deeper …

An economy is about ACTIVITY … making, selling, buying things … and saving to create pools of capital for lending to do more of all those activities.

A financial system is the INFRASTRUCTURE which supports the activity … banks, credit, stock and bond markets … even the currency itself.

People can see and feel economic activity. It’s visible all around.  The news reports on it day and night.

But it’s a LOT harder to see the strength or weakness of the financial system.

Most people simply go about doing their economic activity and trust (consciously or unconsciously) that smart, responsible people are maintaining the system.

Others don’t really trust the folks in charge … but aren’t sure how to know whether the financial system operators are doing a good job or not.

So sadly, most people are completely blind-sided when the system fails in some way.  Just think about the millions of people wiped out in 1929, 1971, 1987, 2000, and 2008.

And if you’re not sure why those dates are significant, it’s probably time to allocate some of your financial focus to more than just your economic activity.

We know.  It’s boring.  It’s hard to understand and relate to.  Just like a building’s foundation … most people would rather walk the property than climb under the house.

We get it.  But stick with us … because if you’re riding any part of the boom, it’s wise to consider when, where, and how fast the party ends.  Because parties ALWAYS end.

This is why some of the pundits we follow … guys like Peter Schiff, Robert Kiyosaki, Chris Martenson, Simon Black … sometimes seem a little gloomy.

While mainstream media is telling you how pretty the economy is … these guys are inspecting the foundation and seeing cracks … which are perhaps not obvious to the untrained eye.

Debt

One of the biggest cracks is the obscene amounts of individual, corporate, municipal, national, and global debt.  The world’s NEVER been in debt like it is right now.

The problem is debt needs to be serviced.  And when debt is growing faster than productivity (income), defaults occur.   This leads to the next huge concern …

Derivatives

When Party A borrows from Party B, Party A has a liability … and Party B has an asset.  Party A’s liability is Party B’s asset.

When Party B pledges their “asset” (Party A’s debt) as collateral for a new loan from Party C … now TWO loans depend on the performance of Party A.  Make sense?

Of course, Party B’s loan now becomes Party C’s asset … and Party C can pledge it as collateral for another loan … and on and on.  Party on.

Daisy Chains

These debt parties link balance sheets of financial institutions together like a group of mountain climbers all tethered together.

The obvious problem is because of the linkage … when debts go bad, the entire system is subject to …

Counter-Party Risk

They call this “contagion” and it was the heart of the 2008 financial crisis … even as the Federal Reserve assured everyone things were “contained.”

But asset prices are fragile … based on most players holding their positions and not dumping them.

However, when debt implodes, players sell whatever they have as fast as they can to raise cash to cover the bad debt.

That’s what happened to stocks in 2008.  And even though people weren’t dumping real estate to raise cash, real estate values fell when money stopped flowing into mortgages.

So yes … all of this matters a LOT to real estate investors. 

When credit markets collapse, it chokes lending, crashes asset prices, and stalls economic activity.

That’s bad for everyone who depends on asset prices and credit markets.

(Of course, for the prepared, it’s a shopping spree!)

Central Banks 

Last time the credit markets failed, central banks stepped in and printed TRILLIONS to buy up bad debt, backstop failing banks, and reflate asset prices.

Can they do it again?

Maybe.  But some say interest rates aren’t yet high enough to drop far enough fast enough in a crisis to jump start the economy.

Also, central banks balance sheets are still bloated with bad assets they printed money to buy up in the last crisis.

Will the world stand by as trillions more are printed to do it again on an even grander scale?  Or would the world lose faith in …

The Dollar

As we describe in detail in Future of Money and Wealth, China and Russia have been openly leading a rebellion against dollar dominance.

And while the Chinese currency is arguably some distance from supplanting the dollar globally, it’s picking up steam.

The yuan is now a MUCH more viable dollar alternative than anything else was in 2008.   This is a developing story we’re following closely.  Meanwhile …

Let the Good Times Roll

Don’t get us wrong.  The economy appears to be strong.  There’s a lot of opportunity in the market RIGHT NOW.

If you’re in the right markets and product niches, this is a fun and profitable time to be an investor.

BUT … the financial system these good times are based on hasn’t really changed.  In fact, in some ways the cracks are getting larger.

So while the good times roll, remember things usually roll downhill … and sometimes right off the edge.  Best to stay aware and prepared.

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.

Investor Summit at Sea 2018 – Part One

This is our 16th year hosting our annual educational event … the Investor Summit at Sea™. Guests and faculty have all disembarked from a wonderful week learning about the future of money and wealth.

We didn’t want our wonderful listeners to miss out entirely on the treasure trove that is the Summit … so we hosted a live recording session on board the ship!

In this episode of The Real Estate Guys™ show, we chat with some of our illustrious faculty members. Listen in to hear their reflections and insights on our week at sea.

You’ll hear from:

  • Your adventurous host, Robert Helms
  • His seasick co-host, Russell Gray
  • Robert and Kim Kiyosaki, the brains behind Rich Dad, Poor Dad
  • G. Edward Griffin, author of The Creature from Jekyll Island
  • Securities law attorney Mauricio Rauld
  • Victor Menasce, author of Magnetic Capital
  • Glen Mather, president of NuView IRA

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Lessons from Robert and Kim Kiyosaki

It was a pleasure to have the always inspiring Robert Kiyosaki and his wife, Kim, on board for the Summit. “It’s more important than ever before to come on Summit at Sea because so much has changed,” Robert says.

The duo enjoyed hearing from experts with many different points of view. “The conversations happening behind the scenes are the most important part,” Robert adds.

Lucky attendees were able to hear from Robert … and female attendees joined Kim in a women-only breakout session about finding financial freedom.

We asked Robert and Kim about their opinions on educating younger people … and why it’s important to have youth at the Summit.

“It’s important we teach the younger generation,” says Robert. “We need to teach kids to look at the world from a different point of view. Most kids haven’t been trained to see a problem as an opportunity.”

Kim adds, “What they teach you in school is the opposite of what it takes to be successful.” According to Kim, school teaches you there’s only one right answer … and you should never make a mistake.

But investors need to learn there are many right answers … and mistakes are the best way to learn. Plus, says Robert, “Student loan debt will never amortize on you.”

Robert and Kim recently celebrated the 21st birthday of Rich Dad, Poor Dad. “The message remains the same,” says Kim. Lessons like “your house is not an asset” and “savers are losers” still ring true, Robert says.

A red pill from G. Edward Griffin

G. Edward Griffin gives this review of the Summit: “I’m amazed at what I learned and that so many people learned so much!”

Edward walked us through the process of writing his book, The Creature from Jekyll Island. He almost gave up twice because he thought he couldn’t do the content justice … but he persisted. Today the book is on its 48th printing!

What about the young people? “Young folks can buy into the idea that the banking system is stealing from them in a legalized fashion,” Edward says. “We’re at a huge tipping point.”

Edward created the Red Pill Expo to get the word out to people that things aren’t always as they seem in the world of money and banking. “You have to be aware before you can do something about the problem,” he says.

The Expo aims to help people “take the red pill, break out of the matrix, and see reality.”

Edward had some great words of wisdom for everybody listening … “We have within all of us the power to understand that most of the great barriers in life are not the barriers we think they are.”

Three experts on the power of community

The author of Magnetic Capital, Victor Menasce, reports, “When you break bread with people, the level of connection and the environment is amazing.”

Attorney Mauricio Rauld agrees. The Summit provides attendees with the opportunity to “absorb knowledge like a sponge,” he says. “It’s an amazing environment.”

Faculty member Glen Mather believed in the power of the Summit so much he brought his first-time property buyer daughter so she could learn too.

Glen has seen the Summit work its wonders firsthand … on himself. “I can’t listen to these guys without thinking, ‘There is so much we have to change,’” he says.

We think getting together to learn is incredibly valuable … if we didn’t, we wouldn’t have created the Summit at Sea™. We offer materials like our podcast and educational reports as the start of a relationship … with the hope that listeners will take that relationship to the human level.

Gathering as a community is a powerful experience … and experiences like the Summit allow both fledgling investors and experts alike to learn new information, open their minds to ideas, and form life-long connections.


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.

The future of interest rates …

Interest rates are a big deal for real estate investors … for many reasons.

The first and most obvious reason is because interest rates are the price of the money you borrow to invest with.  Higher rates mean higher payments and less cash flow.

Of course, even when you pay cash for your properties, your tenants probably carry consumer debt … car loans, credit card, and installment debt …

Higher rates mean higher debt payments for your tenants, so less of their monthly budget is available to pay you rent or absorb rent increases.

Also, your property values, exit options, and liquidity are all affected by interest rates.

Higher rates mean buyers have less capacity to bid up comparable properties … and fewer buyers can afford to buy your property when you’re ready to sell.

For these reasons and others, most real estate investors and their mortgage advisors pay very close attention to interest rates …  especially when financing or re-financing.

But there are other very important reasons for real estate investors to care about the future of interest rates …

Interest rates are a barometer for the health of both the currency and the overall economy.

Last time we looked, most real estate investors transact and denominate wealth in currency (dollars for Americans) … and your rental properties, tenants’ incomes, and overall prosperity all exist inside of the broader economy.

So the potential for big changes to either the currency or the overall economy matter to real estate investors just like they do to paper asset investors.

In fact, based on the amount of debt most real estate investors use, interest rates are arguably even MORE important to real estate investors.

We’re just a couple of days away from our Future of Money and Wealth conference … with nearly 400 people coming … and right now we’re thinking a lot about the dollar and interest rates.

Peter Schiff is speaking.  Peter wrote Crash Proof in 2006 and released it in 2007.  Back then, he loudly warned of an impending financial crisis whose roots would be in the mortgage market.

Sadly, back then we didn’t know Peter, and we didn’t read his book.  Then 2008 happened, and we were blindsided by the financial crisis.

So now we read more … a LOT more.

We make time to listen to people like Peter Schiff, Robert Kiyosaki, and Chris Martenson.  And we work hard to share them with our audiences.

A very interesting book we just finished is Exorbitant Privilege by Barry Eichengreen.  He’s Professor of Political Science and Economics at Cal Berkeley.

Eichengreen published Exorbitant Privilege in 2011, which means he probably wrote it in 2010.

Keep this in mind as we share these prophetic excerpts from Chapter 7, “Dollar Crisis”…

“What if foreigners dump their holdings and abandon the currency [dollar]?  What, if anything, could U.S. policymakers do about it?”

“It would be nice were this kind of scenario planning undertaken by the Federal Reserve and CIA … it would have to start with what precipitated the crash and caused foreigners to abandon the dollar.”

Note:  Eichengreen probably didn’t know at the time that James Rickards, former attorney for Long Term Capital Management (the hedge fund at the center of the near financial meltdown of 1998), was participating in precisely this kind of planning, which Rickards describes in his book Currency Wars, published a year after Exorbitant Privilege.

Back to Eichengreen’s prophetic 2011 commentary …

“One trigger could be political conflict between the United States and China.  The simmering dispute over trade and exchange rates could break into the open …

“… American politicians … could impose an across-the-board tariff on imports from [China].”

WOW … Eichengreen wrote that at least 7 years before this March 22, 2018 headline from CNBC:

Trump slaps China with tariffs on up to $60 billion in imports: ‘This is the first of many’

Back to Eichengreen in 2011 …

“Beijing would not take this lying down.”

CNN Money on April 3, 2018:

China to US: We’ll match your tariffs in ‘scale’ and ‘intensity’

Eichengreen in 2011:

“Or the United States and China could come into conflict over policy toward rogue states like North Korea and Iran.”

If you’ve been following the North Korea drama, you probably know this one’s been back and forth.

Last summer, China seemed to side with North Korea.  Then they tried to take a neutral position.

But recently Kim Jong Un paid a secret visit to China.  Of course, no one really knows what that was about.

But based on recent trade policy it seems the U.S. isn’t sucking up to China for help with North Korea.  So maybe the U.S. and China disagree on North Korea?

Now STAY WITH US … because the point of all this is … according to Eichengreen …

China’s relationship with the United States and the U.S. dollar has a DIRECT impact on the future of YOUR money, interest rates, and wealth.

And if you’re like most Main Streeters, you may not completely understand the connection …

… just like we didn’t understand what Credit Default Swaps had to do with our real estate investing in 2008 … until everything suddenly imploded …

… despite reassurances from the wise and powerful man then behind the curtain of the Federal Reserve, Ben Bernanke.

And the point here isn’t Iran, or North Korea, or tariffs, or trade wars … it’s about whether China gets upset enough with the U.S. and opts for the nuclear option …

Eichengreen in 2011:

“… China [could] vent its anger and exert leverage … by … dumping [Treasuries] … would send the bond markets into a tizzy … interest rates in the United States would spike.  The dollar would crater … could cause exporters, importers, and investors to abandon the dollar permanently.”

Obviously, there’s a LOT more to this topic than we can cover today.

Our point for now is that way back in 2010-11, Eichengreen envisioned a scenario in which conflict with China could create a dollar crisis.

As you can see, today’s headlines are living out his concerns.

When you read Eichengreen, like Jim Rickards, he talks about things reaching a tipping point … where everything happens fast.

We lived that in 2008 and it was NO FUN.  But that was only because we were on the wrong end of it.  While we got slammed, others made fortunes. They were informed and prepared.  We weren’t.

So be cautious of normalcy bias and complacency when it comes to contemplating the possibility of a dollar crisis.

Better to be prepared and not have a crisis … than to have a crisis and not be prepared.

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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