1 00:00:00,160 --> 00:00:05,559 The labor market in general seems to be weakening. The what was it openings? 2 00:00:05,919 --> 00:00:10,839 Job openings just got cut by like one point five million, which was 3 00:00:10,880 --> 00:00:14,880 a big number in the context of job openings, and that that was a 4 00:00:14,919 --> 00:00:18,679 restatement of the past few months plus the latest month's number. So it wasn't 5 00:00:19,039 --> 00:00:22,839 you know, the market wasn't as strong as it seemed, and the current 6 00:00:22,879 --> 00:00:27,679 numbers are pretty weak too. You were listening to carry Letts's Financial Survival Network, 7 00:00:27,920 --> 00:00:32,719 where you get valuable information. You just can't find anywhere else to thrive 8 00:00:32,799 --> 00:00:38,359 in today's trying times. You need the Financial Survival Network now more than ever. 9 00:00:38,960 --> 00:00:43,520 Go to Financial Survival Network dot com and get your free newsletter and gift. 10 00:00:44,079 --> 00:00:53,799 Financial Survival Network now more than ever. And welcome. You are listening 11 00:00:53,799 --> 00:00:58,479 to watching the Financial Survival Network. I'm your host, Carrie Lutz. Eight. 12 00:00:58,920 --> 00:01:02,679 We're at the third to last day or second to last day of the 13 00:01:02,719 --> 00:01:07,680 months. We got John Rabino on with us. John, labor market data 14 00:01:07,879 --> 00:01:11,239 is mixed. Are we adding jobs? Are we taking jobs away? Or 15 00:01:11,319 --> 00:01:15,879 they we one things for sure this time. We know the jobs aren't going 16 00:01:15,920 --> 00:01:19,560 to China, right Hey, Carry No, it doesn't look like that, 17 00:01:19,640 --> 00:01:22,959 but There is a lot of stuff going on out there that are kind of 18 00:01:23,079 --> 00:01:26,760 cross currenty in the economy, and the label market is a big example of 19 00:01:26,760 --> 00:01:34,280 that, because just in the last few months, unions have been striking or 20 00:01:34,319 --> 00:01:38,000 threatening to strike and getting some serious settlements to to the big airlines, United 21 00:01:38,040 --> 00:01:45,920 and American in the US both gave their pilot unions double digit raises for the 22 00:01:45,959 --> 00:01:49,760 next four years, so over ten percent a year for forty straight years. 23 00:01:49,000 --> 00:01:57,200 Yeah, yeah, yeah, and has double digit wage inflation right there, 24 00:01:57,200 --> 00:02:02,239 And the FED knows. The FED doesn't see rising stock wanted real estate prices 25 00:02:02,280 --> 00:02:07,319 as inflation. It ignores those, but when wages go up, it takes 26 00:02:07,319 --> 00:02:12,599 that very seriously. So make makeup of that what you will about the the 27 00:02:12,719 --> 00:02:19,240 elites or whatever. But the unions are now suddenly finding themselves with some power 28 00:02:19,560 --> 00:02:22,599 and they've got a lot of ground to make up. So they're they're threatening 29 00:02:22,599 --> 00:02:25,840 to strike or they are striking. And who else was it it was? 30 00:02:25,840 --> 00:02:34,719 Was it FedEx or Ups one of those guys just gave their union employees big 31 00:02:34,840 --> 00:02:38,199 raises and and so that's spreading across the country. So we've got wage inflation 32 00:02:38,280 --> 00:02:44,840 coming from the unionized sectors of the economy. At the same time, the 33 00:02:45,159 --> 00:02:50,400 labor market in general seems to be weakening. The what was it openings, 34 00:02:50,560 --> 00:02:54,599 Job openings just got cut by like one point five million, which was a 35 00:02:54,599 --> 00:02:59,960 big number in the context of job openings, and that was that was restay 36 00:03:00,319 --> 00:03:02,759 of the past few months plus the latest month's number, So it wasn't you 37 00:03:02,800 --> 00:03:07,879 know, the market wasn't as strong as it seemed, And the current numbers 38 00:03:07,879 --> 00:03:13,280 are pretty weak too. And so home sales at the same time, which 39 00:03:13,360 --> 00:03:19,919 is that that's almost up there with employment as far as a sector that affects 40 00:03:20,000 --> 00:03:23,080 the overall strength of the economy. Home sales are frozen. They got revised 41 00:03:23,159 --> 00:03:29,000 down dramatically over the past few months, and currently they're they're way down year 42 00:03:29,039 --> 00:03:34,240 over year, which makes sense, right because mortgage rates have spiked, which 43 00:03:34,240 --> 00:03:38,960 effectively doubles the monthly cost of a house if the house price doesn't come down, 44 00:03:38,000 --> 00:03:45,400 and so far prices haven't come down, so only cash buyers are still 45 00:03:45,599 --> 00:03:47,919 robust in this market, like the people flying in from out of the country 46 00:03:49,319 --> 00:03:55,240 to Florida unseen. Yeah, see see that that is still a strong part 47 00:03:55,280 --> 00:03:59,680 of the market. But in other places where people actually have to take out 48 00:03:59,719 --> 00:04:02,919 more just forget it. You know, you really can't do it unless you're 49 00:04:02,919 --> 00:04:06,240 going to buy half the house that you can afford, which means you're going 50 00:04:06,319 --> 00:04:11,840 to settle for something that Nobody buys half the house they can afford, because 51 00:04:11,840 --> 00:04:15,599 if they can afford more house, they tend to get excited and buy the 52 00:04:15,800 --> 00:04:19,319 most house they can afford, because that's how the shopping process works. So 53 00:04:19,959 --> 00:04:25,199 if houses aren't selling that these people can't take out the mortgage to buy them, 54 00:04:25,360 --> 00:04:30,160 that's going to slow the economy down dramatically too. So you know, 55 00:04:30,240 --> 00:04:35,240 most signs point towards the slowing economy, but in certain sectors, wages are 56 00:04:35,279 --> 00:04:41,319 going up dramatically. Now the fit is liable to interpret this as wage inflation 57 00:04:41,439 --> 00:04:46,399 becoming a problem, and they're liable to go higher for longer with interest rates, 58 00:04:46,399 --> 00:04:48,759 which is what your own pile just said in his last speech. He 59 00:04:48,879 --> 00:04:54,720 surprised the market by implying that rates we're going to go higher and stay there 60 00:04:54,800 --> 00:05:01,680 longer than the markets were expecting. So you knows, But it doesn't look 61 00:05:01,720 --> 00:05:05,079 like we're going to get fed easing anytime soon, and I think it's gonna 62 00:05:05,079 --> 00:05:08,639 happen, is there and there has to be that big crisis out there, 63 00:05:08,759 --> 00:05:12,199 some part of the secret of the market has to break, and then the 64 00:05:12,279 --> 00:05:15,800 FED will go back to bailing everybody inside out. Then it'll happen quickly. 65 00:05:15,000 --> 00:05:20,240 Remember how quickly they bailed out the banking sector when a Silicon Valley bank and 66 00:05:20,279 --> 00:05:24,879 they're still bailing it out. They're going, yeah, but they didn't waste 67 00:05:24,920 --> 00:05:29,839 any time. Within a week, they were doing things that added liquided each 68 00:05:29,879 --> 00:05:35,480 of the market. So let's something, let's something bigger. They messed up 69 00:05:35,560 --> 00:05:42,319 there because what happened there was that Jenny ill And drew the line in the 70 00:05:42,680 --> 00:05:46,160 line in the sand, We're not going to bail out banks. This time 71 00:05:46,279 --> 00:05:50,920 is different. And then Silicon Valley Bank failed, and you know, they 72 00:05:51,000 --> 00:05:57,319 took like a week or two to bail it out to find a quote unquote 73 00:05:57,360 --> 00:06:00,000 suitor for it, and then three other banks failed, and then all of 74 00:06:00,079 --> 00:06:04,240 a sudden they said, no, no, just kidding. All deposits are 75 00:06:04,319 --> 00:06:08,480 backstopped though, we're not going to let you. We're not going to let 76 00:06:08,519 --> 00:06:12,639 you lose your deposits. We're not going to have bail ins regardless what Don 77 00:06:12,720 --> 00:06:16,079 Frank said. And that was that. So in Florida, sales are down 78 00:06:16,160 --> 00:06:23,199 like a third, but prices are up because inventories are still incredibly short. 79 00:06:23,600 --> 00:06:28,480 I mean, that's the thing. It's a tale of several markets. But 80 00:06:28,639 --> 00:06:34,360 in popular places, even though the sales are down, the inventory still down. 81 00:06:34,959 --> 00:06:39,199 So what that will amount to, I don't know. But people are 82 00:06:39,279 --> 00:06:46,120 still fleeing to these key states like Texas, like Tennessee, Georgia, the 83 00:06:46,240 --> 00:06:51,959 Carolinas, you know, basically the southeast where low taxes more than makeup for 84 00:06:53,279 --> 00:06:59,920 increased mortgage rates. We'll see. The migration thing is kind of a walk 85 00:07:00,279 --> 00:07:02,120 though, because if you're in California and you want to move to Texas, 86 00:07:02,199 --> 00:07:06,199 you kind of have to sell your California house. And if you don't have 87 00:07:06,279 --> 00:07:10,720 to sell your calahorc for in your house, you're in the top one percent, 88 00:07:10,879 --> 00:07:13,639 then we're not talking about you. You know, ninety nine percent of 89 00:07:13,680 --> 00:07:16,560 the country pretty much has to sell one house to move into another. So 90 00:07:16,759 --> 00:07:20,160 you get a sail over here and a purchase over there, and it doesn't 91 00:07:20,199 --> 00:07:24,519 affect the macro numbers all that much. But the question is for housing, 92 00:07:25,399 --> 00:07:31,160 what is going to make inventory spike and cause prices to crash? And I 93 00:07:31,240 --> 00:07:36,519 think it's going to be two things. One is is baby boomer demographics. 94 00:07:36,800 --> 00:07:43,399 You know, we're getting older, and so our boomers have not sold their 95 00:07:43,439 --> 00:07:46,839 McMansions. But the idea was always that there was going to be a demographic 96 00:07:46,920 --> 00:07:51,959 real estate crash because the richest, biggest generation in American history had loaded up 97 00:07:51,959 --> 00:07:59,879 on real estate and bought too much house during previous credit bubbles, and they 98 00:08:00,160 --> 00:08:03,480 they can't go up and down the stairs in the three story house anymore, 99 00:08:03,639 --> 00:08:07,639 and it's gonna keep Who's going to keep four thousand square feet clean? You 100 00:08:07,720 --> 00:08:09,399 know, It's just something that a seventy five year old doesn't want to deal 101 00:08:09,480 --> 00:08:13,959 it. But a growing number of boomers are heading into that age range and 102 00:08:15,079 --> 00:08:18,279 so they kind of have to start lightening up. They got a downsize, 103 00:08:18,839 --> 00:08:22,079 So that's going to happen. And the question is will something happen to spook 104 00:08:22,120 --> 00:08:26,360 boomers into doing it all at once? So will it be more graduating the 105 00:08:26,439 --> 00:08:30,639 other thing? It will go ahead. You have all I was just gonna 106 00:08:30,639 --> 00:08:35,440 say, don't forget. Many of you out there have three percent mortgages and 107 00:08:35,559 --> 00:08:39,559 you want to downsize, and assuming you don't buy the house for cash, 108 00:08:41,120 --> 00:08:43,080 you're going to get a mortgage. You're going to get a seven percent mortgage, 109 00:08:43,080 --> 00:08:48,399 which means your mortgage will be double dollar for dollars. So you buy 110 00:08:48,519 --> 00:08:54,000 half the house and your payment stays the same. So why move. That's 111 00:08:54,120 --> 00:08:58,879 why everybody's frozen in their houses houses right now, because moving is an incredible 112 00:09:00,120 --> 00:09:03,279 expensive process. You know, you're leaving a cheap money place going to an 113 00:09:03,320 --> 00:09:09,200 expensive money place, and yet at some point it's going to have to happen, 114 00:09:09,360 --> 00:09:15,279 just because all those stairs, luckily in its places. I don't have 115 00:09:15,480 --> 00:09:18,200 anything. Yeah, one of the reasons I bought it because it's on one 116 00:09:18,320 --> 00:09:22,039 level. But I totally know what you're saying, and who wants to maintenance 117 00:09:22,120 --> 00:09:26,559 the upkeep? You know, you own a house, you get to be 118 00:09:26,679 --> 00:09:31,360 real good friends with your handyman, your plumber, your electrician, and there's 119 00:09:31,399 --> 00:09:35,480 always stuff breaking on it, you know, always, and there's always stuff 120 00:09:35,600 --> 00:09:39,960 to do. You know. My wife and I had a six thousand square 121 00:09:39,000 --> 00:09:46,120 foot house in Idaho and that was insane. We'd become empty mesteroms and there 122 00:09:46,159 --> 00:09:48,360 were there were just the two of us in the you know, in this 123 00:09:48,440 --> 00:09:50,879 big house where empty rooms get dusty. Even if you don't do anything in 124 00:09:50,919 --> 00:09:54,480 there, you'll go away for a weekend, it's covered in dust. So 125 00:09:54,639 --> 00:10:01,440 the maintenance is insane, and so we did the downsizing thing and toilets go 126 00:10:01,639 --> 00:10:05,759 bad. Then they start running and boss, it's drip even though no one's 127 00:10:05,840 --> 00:10:09,480 using it. Well, if you had, if you have five bathrooms something, 128 00:10:09,639 --> 00:10:13,919 yeah, like you said, something is always dripping. We had we 129 00:10:13,000 --> 00:10:16,279 had this. Okay, wait, I'm not gonna get too far afield here, 130 00:10:16,320 --> 00:10:20,320 but we had a plumber who I was only partially kidding. I offered 131 00:10:20,399 --> 00:10:22,960 him our spare bedroom. I told him he could move in if he wanted 132 00:10:22,000 --> 00:10:24,919 to be, because he's at our household often and not and he saves and 133 00:10:26,240 --> 00:10:30,279 saves my butt every time I being waked. But but anyhow, Yeah, 134 00:10:30,279 --> 00:10:33,480 see, that's that's the situation that boomers are in now, especially with multi 135 00:10:33,519 --> 00:10:37,279 story houses of course, because it really is like if you've got a hip 136 00:10:37,360 --> 00:10:41,120 that's cooling and you need to get a replaced, but you're trying to put 137 00:10:41,159 --> 00:10:46,720 off the replacement, which is probably seventy percent of sixty five year olds right 138 00:10:46,799 --> 00:10:50,120 now. If you don't you don't want to sleep on the third floor, 139 00:10:50,960 --> 00:10:54,799 have all your you know, your TV room in the walkout basement, and 140 00:10:54,879 --> 00:10:58,960 then have the kitchen on the first place. It's just it's a crazy life, 141 00:10:58,080 --> 00:11:01,919 very painful to any out. That's that's one thing. The other thing 142 00:11:03,080 --> 00:11:07,720 is Airbnb now suddenly actual Yeah yeah, well yeah, because let's say you've 143 00:11:07,720 --> 00:11:13,919 got seventeen properties, which is not an unusual number for these airbnb entrepreneurs. 144 00:11:15,000 --> 00:11:20,320 You've got a mail, yeah, you have major carrying costs, and the 145 00:11:20,559 --> 00:11:24,720 minute your revenue dips, you have to start lightning up on inventory. And 146 00:11:26,000 --> 00:11:31,120 you know, hospitality is usually a victim of a slowing economy. I fewer 147 00:11:31,200 --> 00:11:35,759 people are in hotels, fewer people can afford are and be especially air Andbnb 148 00:11:35,879 --> 00:11:37,799 turned out not to be a good deal anyhow. It's got all those hidden 149 00:11:37,840 --> 00:11:46,679 fees and stuff, and so it's not even really that popular anymore compared to 150 00:11:46,759 --> 00:11:50,480 hotels, which are at least clean and simple and understandable. So there's going 151 00:11:50,519 --> 00:11:56,960 to be a del uge of inventory out of airbnbs as soon as the economy 152 00:11:56,080 --> 00:12:01,000 has any kind of a little hiccup, and that deluge is gonna just pour 153 00:12:01,120 --> 00:12:05,600 onto the market because there's so many airbnb units. You know what I think 154 00:12:05,639 --> 00:12:09,600 that I don't have the stat correct or perfect, but it's it's something like 155 00:12:11,840 --> 00:12:18,120 the inventory of houses that people don't actually that the owners don't actually live in. 156 00:12:18,480 --> 00:12:22,480 It is ten or twenty times the inventory currently for sale right now, 157 00:12:24,519 --> 00:12:31,559 so they you know, Airbnb trouble could just swamp the existing market for homes 158 00:12:31,799 --> 00:12:37,320 for pre months, you know, and that could happen. So in twenty 159 00:12:37,440 --> 00:12:41,320 twenty one, the US had an average of two and a quarter million active 160 00:12:41,440 --> 00:12:46,480 listings. So I think that's two and a quarter million units. Bryant's had 161 00:12:46,600 --> 00:12:52,840 one point to China at one point one five. And Okay, that we've 162 00:12:52,879 --> 00:12:58,159 actually got we actually have statistics on all this stuff. Job well, this 163 00:12:58,320 --> 00:13:03,039 is nights. That's not going to do us any good. Okay, it 164 00:13:03,159 --> 00:13:05,759 does get you somewhere when you compare that with inventory of homes for sale and 165 00:13:07,399 --> 00:13:11,799 throw in houses that have been bought as investments, just places to poe under 166 00:13:11,879 --> 00:13:16,320 cash, you know, because the average rich person owns three or four properties. 167 00:13:16,399 --> 00:13:22,320 Now. Yeah, Nashville is a city where they had like thousands of 168 00:13:22,440 --> 00:13:28,080 units built just to be Airbnb's. They're built specific for that purpose, you 169 00:13:28,159 --> 00:13:33,360 know, three four story you know, buildings with units in them. And 170 00:13:35,039 --> 00:13:37,480 you don't go all out on the kitchens. You just make it. You 171 00:13:37,600 --> 00:13:41,159 make the place look nice and clean. You don't go all out on anything 172 00:13:41,320 --> 00:13:46,480 on it, and you know, you make it conducive to people who are 173 00:13:46,759 --> 00:13:56,240 short stay vacation type tenants, and that isn't necessarily what a renter wants when 174 00:13:56,279 --> 00:13:58,399 it was built, you specific, So it's going to be interesting. But 175 00:13:58,480 --> 00:14:05,919 talk about real estate problems and bubbles and collapses. You know, China, 176 00:14:05,039 --> 00:14:11,480 supposedly there's sixty four million units that are empty in the entire country, and 177 00:14:13,320 --> 00:14:16,559 you know, it is the largest asset class in the world, Chinese real 178 00:14:16,720 --> 00:14:24,240 estate. Fortunately only Chinese own it, and most of its substandard construction, 179 00:14:24,840 --> 00:14:30,080 not built to spec And you know, in China, it's like in the 180 00:14:30,159 --> 00:14:33,240 United States, you don't start paying your mortgage till you close on your house. 181 00:14:33,720 --> 00:14:39,080 In China, you pay the mortgage when you sign on the dotted line, 182 00:14:39,480 --> 00:14:43,159 and it could be years before you even get that house or that apartment. 183 00:14:43,799 --> 00:14:50,320 And that's what's led to a mass of mass defaults, you know, 184 00:14:50,759 --> 00:14:56,360 strategic defaults. And then in China, your foreclosure might happen, but your 185 00:14:56,399 --> 00:15:00,840 debt never goes away, and it's in your social cre its score. And 186 00:15:01,519 --> 00:15:05,159 I guess, I guess you could probably move to Siberia and be happier than 187 00:15:05,240 --> 00:15:09,159 staying in Chida once you got the reputation as a deadbeat, you know. 188 00:15:09,759 --> 00:15:16,440 So it's an untenable situation that's made worse by the system, by the corruption, 189 00:15:18,080 --> 00:15:24,320 and by malinvestment because they didn't need sixty four million units to stay empty. 190 00:15:24,440 --> 00:15:28,320 John, You know. Yeah, China blew itself the biggest real estate 191 00:15:28,399 --> 00:15:33,320 bubble and human history, and it's bursting and they're trying to figure out what 192 00:15:33,399 --> 00:15:37,600 to do about it. They're they're easing in various ways, they're cutting interest 193 00:15:37,679 --> 00:15:41,600 rates and running up bigger deficits. But at the same time, the U 194 00:15:41,720 --> 00:15:46,759 one is falling. So during that box that we've been talking about for the 195 00:15:46,799 --> 00:15:50,759 fettle these years, when the currency is falling, but you still have to 196 00:15:50,960 --> 00:15:56,799 stimulate the economy because you've got some sectors blowing up. But the more you 197 00:15:56,919 --> 00:16:02,440 stimulate the zombie sectors, the more the currency drops, which is inflationary. 198 00:16:03,639 --> 00:16:07,919 So you got this this death spirer potential in China right now. We don't 199 00:16:07,960 --> 00:16:11,879 know how it's going to play out exactly, but they're they're in the early 200 00:16:11,960 --> 00:16:17,039 stages of something like that, so it's and it's not clear they understand how 201 00:16:17,039 --> 00:16:18,960 to fix any of this either. Because remember ask guys are. You know 202 00:16:19,000 --> 00:16:25,519 it's a communist dictatorship. Then they don't really get markets. Yeah, they 203 00:16:25,639 --> 00:16:30,039 get you can you can dictate to the banks to lend to housing. You 204 00:16:30,080 --> 00:16:33,279 know, they know markets work from that point of view, but they don't 205 00:16:33,360 --> 00:16:40,360 really know how market's clear via the price mechanism and through bankruptcy and things like 206 00:16:40,480 --> 00:16:42,840 that. And then I don't think they like the idea to live they hear 207 00:16:42,919 --> 00:16:47,720 it. Listen to this. You're gonna love this because human nature being human 208 00:16:47,840 --> 00:16:52,240 nature, government tries to stop you from doing things. As long as they 209 00:16:52,240 --> 00:16:56,240 don't throw you in jail, you don't. You just figure out ways around 210 00:16:56,320 --> 00:17:00,919 it and deal with the fallout later. So in China, if you bought 211 00:17:00,120 --> 00:17:06,200 a place for like half a million, you on, and the market price 212 00:17:06,440 --> 00:17:10,519 is two hundred and fifty thousand, you on, they won't let you sell 213 00:17:10,599 --> 00:17:14,480 it for that. Okay, you're not allowed to sell it as for a 214 00:17:14,599 --> 00:17:18,000 loss because that's going to disrupt the market. So you know what these smart 215 00:17:18,079 --> 00:17:22,640 people do, John, You're gonna love this. And I saw this on 216 00:17:22,839 --> 00:17:27,160 China Fact chasers. These guys speak Mandarin, they're fluent, they know what's 217 00:17:27,200 --> 00:17:33,000 going on there. They have sources all over. They will say all right, 218 00:17:33,279 --> 00:17:36,359 i'll sell it to you for half a million, or i'll buy it 219 00:17:36,480 --> 00:17:38,839 for half a million, but you've got to give me two hundred fifty thousand 220 00:17:40,079 --> 00:17:47,839 back two hundred fifty thousand you on back in gold. So it appears that 221 00:17:47,960 --> 00:17:53,599 the prices are staying higher, but under the table they're paying off the buyer 222 00:17:55,319 --> 00:18:00,160 in gold to reduce the price. But the stated price of the unit at 223 00:18:00,160 --> 00:18:04,480 the stated sale price stays up there and everybody's happy. And this is the 224 00:18:04,599 --> 00:18:11,279 problem with price controls and and really even more corrupt than our central government. 225 00:18:14,200 --> 00:18:18,480 Yeah that end is that great. Yeah, that's but you know, and 226 00:18:18,599 --> 00:18:22,079 in the end, you still did sell your house for half what you paid 227 00:18:22,119 --> 00:18:26,799 for it. Yeah, if I'm understanding that process. So, so losses 228 00:18:26,880 --> 00:18:32,640 are still getting taken, people are being impolyetish, and that has to play 229 00:18:32,640 --> 00:18:37,680 out somewhere, somewhere. Those losses have to be booked, and at some 230 00:18:37,839 --> 00:18:41,039 point somebody goes bankrupt. And that's what China is facing right now, that 231 00:18:41,720 --> 00:18:47,160 there's really no way out of a credit bubble except to take the losses. 232 00:18:47,240 --> 00:18:49,480 You know, you can't you can't move them around forever, and you can't 233 00:18:49,519 --> 00:18:52,440 paper them over forever, and China is going to find that out, So 234 00:18:52,599 --> 00:18:56,599 it's not clear how to solve China's got a lot of problems right now. 235 00:18:56,640 --> 00:19:02,240 They've got big demographications too. The China Policy or one child policy for all 236 00:19:02,240 --> 00:19:07,720 those years left them with a shortage of women, so they don't have households 237 00:19:07,799 --> 00:19:11,680 warming. They've got a lot of very lonely guys with no prospects forever having 238 00:19:11,759 --> 00:19:17,039 a family or anything. And that's economically a big problem too, because you 239 00:19:17,039 --> 00:19:21,319 don't have very you don't have a lot of babies being born in that kind 240 00:19:21,319 --> 00:19:29,880 of situation, so their population is actually shrinking. And it's not clear how 241 00:19:29,960 --> 00:19:34,880 a capitalist economy survives, especially a financialized capitalist economy where there's a lot of 242 00:19:36,000 --> 00:19:41,920 debt, survives a shrinking population because you've already got all these retirees that have 243 00:19:41,039 --> 00:19:45,000 to be taken care of. But if there aren't enough workers to do that, 244 00:19:45,599 --> 00:19:51,319 there's not enough tax revenue coming in, the government then has to make 245 00:19:51,359 --> 00:19:55,440 good on those promises by printing money, which destroys the currency and so on. 246 00:19:55,680 --> 00:20:00,799 So China has multiple problems that all lead to a gigantic, crazy crisis. 247 00:20:00,880 --> 00:20:03,240 We'll just have to see about the timing, but I think the yuan 248 00:20:03,400 --> 00:20:10,720 isn't trouble the mother of all, because they're cutting their rates and the yuan 249 00:20:11,759 --> 00:20:17,079 is basically disintegrating. So I want to revisit a topic that I know is 250 00:20:17,119 --> 00:20:21,599 on both of our list for today, and that is the bricks countries. 251 00:20:22,519 --> 00:20:26,079 Now everybody's saying the bricks, well, they want to get rid of the 252 00:20:26,200 --> 00:20:30,319 dollar. All right, Well that's foregone conclusion. It's going to happen at 253 00:20:30,440 --> 00:20:34,720 some point. I don't particularly think it's this point. But China's own currency 254 00:20:34,920 --> 00:20:40,519 is on the brink of crisis. The country is having a meltdown the equivalent 255 00:20:41,119 --> 00:20:45,160 of what the United States had in nineteen twenty nine, only much worse because 256 00:20:45,240 --> 00:20:52,000 they've got about fifteen times or about eight times more people than the US had. 257 00:20:52,079 --> 00:20:56,039 The US had like under one hundred million people back then, and the 258 00:20:56,880 --> 00:21:00,799 you know. So, so China has to find a way out of their 259 00:21:00,880 --> 00:21:07,119 own currency crisis. That is inevitable and that is going And the more the 260 00:21:07,279 --> 00:21:11,400 yuan goes into crisis, the better it is for the dollar on a relative 261 00:21:11,480 --> 00:21:18,119 basis in the other world's currencies that may hold value, like the euro and 262 00:21:18,440 --> 00:21:22,519 even the Canadian dollar, the Australian dollar. So they need a way out, 263 00:21:22,359 --> 00:21:26,920 and I think the bricks concept is as much a way out for these 264 00:21:27,039 --> 00:21:33,240 countries to flee their own failing currencies as it is for them to stick it 265 00:21:33,359 --> 00:21:38,319 to the US. Just my theory. I could be wrong, but I 266 00:21:38,519 --> 00:21:45,079 personally have celebrated the death of the dollar many times and have been totally off 267 00:21:45,160 --> 00:21:49,720 the mark. Yeah, okay, several things about that. The big fiat 268 00:21:49,759 --> 00:21:56,279 currencies like the dollar and the yen and the euro are all losing value. 269 00:21:56,359 --> 00:22:00,559 You know, we had we had a ten percent inflation shilly in twenty twenty 270 00:22:00,599 --> 00:22:04,960 two and it hasn't gone back down to two percent yet. So they're losing 271 00:22:06,079 --> 00:22:08,319 value and they will continue to lose value. That's a that's a that's a 272 00:22:08,359 --> 00:22:11,160 given separation. Yeah, it's a given, and it's separate off from the 273 00:22:11,200 --> 00:22:15,920 bricks. But yeah, it's not clear how the bricks could well, I 274 00:22:15,960 --> 00:22:19,240 mean, they couldn't go completely to another shared currency. They couldn't do a 275 00:22:19,359 --> 00:22:26,319 Euro kind of common currency market at all because their currencies are too unstable. 276 00:22:26,400 --> 00:22:30,960 You know. That would be like a bunch of Italy is trying to form 277 00:22:30,079 --> 00:22:34,119 a currency unit and lookout of a jourman to anchor some of the whole, 278 00:22:34,400 --> 00:22:38,880 the summit is greater than the whole, a little synergistic thing. Yeah, 279 00:22:40,319 --> 00:22:42,960 they think they can pull off, right, Well, what Jim Rickards had 280 00:22:42,960 --> 00:22:47,759 an interesting take on this, and he said that they wouldn't get rid of 281 00:22:47,880 --> 00:22:52,839 their own national currencies, but what they would do is create a shared trading 282 00:22:52,960 --> 00:22:56,400 currency for them to trade back and forth with each other. So so Russia 283 00:22:56,440 --> 00:23:00,440 doesn't have to take rootpies, which it can, you is, for much 284 00:23:00,440 --> 00:23:04,519 of anything in return for its oil. It would take that gold backed common 285 00:23:04,599 --> 00:23:08,160 currency. And you know, these guys have been accumulating gold for quite a 286 00:23:08,200 --> 00:23:14,799 while, so it's possible that at the right price, you know, gold 287 00:23:14,880 --> 00:23:19,039 would have to be revalued upward, but maybe not so much that it becomes 288 00:23:19,119 --> 00:23:26,960 debilitating. And they back their shared currency with gold, and they just trade 289 00:23:26,000 --> 00:23:32,079 with each other in something that represents a certain weight of gold, and so 290 00:23:32,960 --> 00:23:37,759 their their currencies can do what they do their national currencies, but they've still 291 00:23:37,759 --> 00:23:42,720 got this trading currency which is rock solid. And that's I mean, that 292 00:23:42,759 --> 00:23:47,880 would be technically pretty tricky too, but it's something that if it could be 293 00:23:47,920 --> 00:23:51,279 pulled off, would make a ton of sense, because that's that's a great 294 00:23:51,400 --> 00:23:56,359 currency to have or bilateral trade because you always know what it's worth. You 295 00:23:56,440 --> 00:24:00,160 know, the dollar price of gold exists out there twenty four seven, so 296 00:24:00,240 --> 00:24:07,680 you always basically have a dollar cross rate for your currency. So in theory, 297 00:24:07,799 --> 00:24:15,160 that could be done, and that would explain their aggressive accumulation of gold, 298 00:24:15,440 --> 00:24:21,839 or would it would give down a reason to rationalize their accumulation of gold. 299 00:24:21,880 --> 00:24:23,640 So we'll city. I don't know. I think they're a long away 300 00:24:23,640 --> 00:24:29,359 from anything like that. You know, the problem is like nobody's going to 301 00:24:29,400 --> 00:24:32,400 trust. Hey, look, our banks are in trouble, but so far 302 00:24:32,519 --> 00:24:37,599 the FED has back stopped them. And you know, we're not going to 303 00:24:37,759 --> 00:24:41,240 see any bank runs. We'll see a currency collapse before we see a bank 304 00:24:41,319 --> 00:24:45,400 run. John, you agree with that, well, I see bankrupt leading 305 00:24:45,440 --> 00:24:49,359 to a currency collapsed. Yeah, cried. Could well play out for sure. 306 00:24:51,359 --> 00:24:56,559 In China, the banks have already collapsed, but it's not it's not 307 00:24:56,759 --> 00:25:02,720 like publicized, like there are a bunch of banks that have collapsed and the 308 00:25:02,799 --> 00:25:07,079 people try to get their money out and they say, ah, later, 309 00:25:07,400 --> 00:25:11,240 you know, don't worry about it. Your money is safe, Your money 310 00:25:11,359 --> 00:25:15,160 is safe. Don't worry about a thing, right, But the reality is 311 00:25:15,279 --> 00:25:23,200 that they've got daily currency withdrawal restrictions in their banks in place, and I'm 312 00:25:23,240 --> 00:25:27,880 going to toot my own horn here for a change. I said years ago. 313 00:25:29,319 --> 00:25:33,799 The reason HAF the reason they were doing the Belt and Road initiative and 314 00:25:33,960 --> 00:25:40,599 all of these projects outside of China that were money losers. They were doing 315 00:25:40,680 --> 00:25:45,359 it to get money out of the country. It was flight capital disguised as 316 00:25:45,480 --> 00:25:56,880 investment capital, supposedly achieving the PPC's goals of you know, investing outside the 317 00:25:56,920 --> 00:26:00,400 country and building influence. But in reality, we're laundering money out of the 318 00:26:00,480 --> 00:26:06,920 country and putting it into money losing projects. Because of the projects making money, 319 00:26:07,359 --> 00:26:10,400 then you got to bring it back to China. But if it's losing 320 00:26:10,480 --> 00:26:12,799 money and nobody really knows the scope of the losses, then you've got to 321 00:26:12,880 --> 00:26:18,640 keep feeding it because the Chinese don't want the project to collapse because then there's 322 00:26:18,680 --> 00:26:23,079 a loss of face. So they've used this to literally launder trillions of dollars 323 00:26:23,359 --> 00:26:26,720 out of the PRC. This is what's happened, man, You know, 324 00:26:27,119 --> 00:26:30,039 I know it. You can see it now. It's as clear as day 325 00:26:30,640 --> 00:26:37,920 now that they're in trouble. Yeah. Yeah, that wasn't an actual capitalist 326 00:26:37,960 --> 00:26:41,720 country, not that not that we are. You know, when I saw 327 00:26:41,799 --> 00:26:45,559 some of the place and there's saying America's better, you know, we're I 328 00:26:45,680 --> 00:26:51,039 think not at all. Yeah, you know the elites in the US in 329 00:26:51,079 --> 00:26:53,960 the million dollars stash all over the place. Did you catch the article like 330 00:26:55,200 --> 00:27:00,319 thirteen thousand, five hundred the wealthiest Chinese have fled the country? Now I 331 00:27:00,319 --> 00:27:04,319 didn't see that with that, Hey, that that's why Jancouver has the most 332 00:27:04,359 --> 00:27:14,440 expensive real estate yea Vancouver. Yeah, yeah, And like they just bust 333 00:27:14,519 --> 00:27:21,119 in this woman who is the head of the largest Chinese immigration company that helped 334 00:27:21,160 --> 00:27:25,680 people get out of the country, and she didn't do anything wrong. They 335 00:27:25,799 --> 00:27:30,119 just busted her for whatever reason they busted her. Right, Yeah, I 336 00:27:30,519 --> 00:27:34,519 didn't see any of that, but I totally believe that that's the case. 337 00:27:34,599 --> 00:27:38,119 You know. See, that's another reason why you can't have a competing reserve 338 00:27:38,240 --> 00:27:44,640 currency with the dollar. When your country has capital controls in place, it 339 00:27:45,319 --> 00:27:48,799 be free for Yeah. Yeah, you have to be able to move that 340 00:27:48,920 --> 00:27:52,599 money around with nobody putting you a jail. Where So Russia and China are 341 00:27:52,680 --> 00:27:56,079 not ready for that yet. No, that's not to say they won't be. 342 00:27:56,720 --> 00:28:00,240 Uh. I think there's going to be a major house cleaning in China 343 00:28:00,319 --> 00:28:03,440 and Russia too for that matter. But the house cleaning is going to take 344 00:28:03,480 --> 00:28:11,319 place in China first. There is a I want to call it a theory, 345 00:28:11,920 --> 00:28:18,440 but a belief, maybe a superstition widely held in China that every dynasty, 346 00:28:18,279 --> 00:28:25,160 it's not necessarily a superstition, but a belief that every dynasty ends with 347 00:28:25,440 --> 00:28:30,960 massive flooding. And then the regime is faced with its own inability to deal 348 00:28:32,079 --> 00:28:36,920 with that flooding, and then they get swept out. And that is potentially 349 00:28:37,000 --> 00:28:44,640 where the PRC, the PPC, whatever is, People's Party whatever, Communist 350 00:28:44,720 --> 00:28:52,000 Party CPT been calling it the wrong thing, Chinese Communist Party. That's potentially 351 00:28:52,119 --> 00:29:00,039 CCP. That's potentially where we're at right now. And that combined with with 352 00:29:00,200 --> 00:29:04,079 what's happening in Russia. You know, I don't know whether Ukraine's winning or 353 00:29:04,160 --> 00:29:08,039 losing. If you watch their propaganda, they're about to drive a wooden stake 354 00:29:08,160 --> 00:29:14,680 through Putin's heart or what the space where a normal person would have a heart. 355 00:29:14,839 --> 00:29:21,640 Right, But sometimes in this world you win by not losing, right, 356 00:29:22,200 --> 00:29:25,759 and the fact that they haven't lost yet they might very well lose. 357 00:29:25,839 --> 00:29:29,000 I think it's probable they will, but the fact that they have it now 358 00:29:29,160 --> 00:29:33,480 for almost two years makes them the winner here, right. I think we're 359 00:29:33,640 --> 00:29:38,279 in for a massive cataclysm around the world. John, Can you think, 360 00:29:38,480 --> 00:29:44,599 can you name one country for me where they like their government? Well, 361 00:29:45,200 --> 00:29:51,839 no, when you when you start borrowing insane amounts of money, the government 362 00:29:52,000 --> 00:29:53,319 loses the trust of the people. And that's where we are now. That 363 00:29:53,680 --> 00:29:59,680 the whole trustism thing where yeah, it's global, nobody trusts their government because 364 00:29:59,680 --> 00:30:04,480 they're government is broke obviously, I mean Switzerland's not broke, and and actually 365 00:30:04,839 --> 00:30:08,279 Russia is not broke. They didn't accumulate too much debt and they have a 366 00:30:08,359 --> 00:30:14,000 lot of gold and oils. So but but you know, the Russia Ukraine 367 00:30:14,039 --> 00:30:18,039 thing, Russia wins if Ukraine is neutralized and NATO does not go any further. 368 00:30:19,039 --> 00:30:22,279 And I think we're close to that. At what price? At what 369 00:30:22,519 --> 00:30:27,160 price? You know, quarter of a million casualties, that's not a win. 370 00:30:27,400 --> 00:30:33,079 And the you know, wards are inflationary in and of themselves, So 371 00:30:33,799 --> 00:30:38,359 inflation is going to pick up because of these wars. In every area where 372 00:30:38,359 --> 00:30:44,599 there's a ward, there's inflation. Oh yeah, absolutely. But if global 373 00:30:44,720 --> 00:30:48,200 inflation pushes up the price of oil and gold and the other stuff. Russia 374 00:30:48,279 --> 00:30:55,000 has river They're a resourced economy, so they actually benefit partially from the IF. 375 00:30:55,519 --> 00:30:57,680 But I mean they're they're thinking national See this is a this is an 376 00:30:57,720 --> 00:31:04,200 existential thing for Russia. They can out NATO on their border. It's existential 377 00:31:04,359 --> 00:31:10,759 now because I think the West has perceived I think it's much like World War 378 00:31:10,880 --> 00:31:15,880 One. The West has perceived Russia as a declining empire, and World War 379 00:31:15,000 --> 00:31:21,559 One was about carving up pieces of declining empires. The Austro Hungarian Empire, 380 00:31:22,000 --> 00:31:29,279 which was like this accidental agglomeration of countries that Austria Hungary never really set out 381 00:31:29,359 --> 00:31:32,880 to do. They just kind of it all fell in their lap. And 382 00:31:32,960 --> 00:31:37,319 then the Ottoman Turk Empire, and it was all about chopping that up for 383 00:31:37,519 --> 00:31:42,119 resources. And now the intent of this war has always been, I realize 384 00:31:42,160 --> 00:31:49,319 this recently, to chop up the Russian Empire for resources because it holds some 385 00:31:49,640 --> 00:31:56,519 of the most you know, treasured and highest grade resources that haven't been developed 386 00:31:57,119 --> 00:32:02,440 in any any country in the world, and they want to chop it up. 387 00:32:02,519 --> 00:32:07,319 And China wants their piece too, They want Siberia so they can get 388 00:32:07,400 --> 00:32:12,200 the resources in Siberia and get rid of a bunch of people. They've been 389 00:32:12,319 --> 00:32:17,440 colonizing or attempting to colonize the Russian the pyto Russian border for like forty years, 390 00:32:17,559 --> 00:32:22,599 and the Russians have resisted it. But I wonder, I wonder what's 391 00:32:22,640 --> 00:32:27,720 happening there now. Nobody has reported upon it. Well, the difference between 392 00:32:27,880 --> 00:32:31,279 today and World War One is that we're talking about car Yeah, we're carving 393 00:32:31,359 --> 00:32:37,920 up nuclear or powers that that. I mean, if you've got hypersonic nuclear 394 00:32:37,000 --> 00:32:45,559 tipped missiles, nobody's gonna carve you up to One of those missiles can take 395 00:32:45,599 --> 00:32:50,319 out an entire aircraft carrier group. It wore a major city. I mean, 396 00:32:50,400 --> 00:32:54,240 Seattle could be vaporized in literally twenty minutes. Yeah, make the mission 397 00:32:54,480 --> 00:33:00,119 right this minute. So then that's yeah, so if the you know, 398 00:33:00,160 --> 00:33:05,720 I wouldn't put anything past the psychopaths running the US government. Yeah, I'd 399 00:33:05,759 --> 00:33:10,759 actually think they're gonna occupy and carbuk Russians. But they're not, because that's 400 00:33:12,240 --> 00:33:15,640 that's an existential threat to Russia obviously by definition, and they've got nukes. 401 00:33:16,000 --> 00:33:20,960 So yeah, hey, so don't don't do that. In neo cons Please 402 00:33:21,039 --> 00:33:24,839 don't try anything stupid you that we're dealing with though. You know, you 403 00:33:24,960 --> 00:33:29,559 know what, like we say, John, what do we learn from history? 404 00:33:30,119 --> 00:33:31,720 The one thing we learned from history is we'd all learn from history. 405 00:33:32,319 --> 00:33:37,400 I mean, you know, if if Turkey had a nuke or Austria had 406 00:33:37,440 --> 00:33:42,559 a nuke in World War One, the result would have been a lot different, 407 00:33:42,799 --> 00:33:45,359 right, Oh my god. In World War One, they and they 408 00:33:45,440 --> 00:33:47,960 totally would have used those weapons too, because they were you know, they 409 00:33:49,000 --> 00:33:53,640 were morons. Yeah, and and they were all existantially threatened. Everybody was 410 00:33:53,720 --> 00:33:59,279 ext existentially threatened back downd. So yeah, that could that could have easily 411 00:33:59,319 --> 00:34:02,519 turned into a new your war, and so could this. So I think 412 00:34:02,599 --> 00:34:08,039 I think that will happens. The lesson is don't don't put morons in charge 413 00:34:08,079 --> 00:34:13,039 of your country, you know, that's the Yeah, And you know, 414 00:34:13,719 --> 00:34:22,960 war should definitely, definitely definitely be a last resort, not you know, 415 00:34:22,079 --> 00:34:29,079 they say war is what happens when it's just a way of resolving disputes when 416 00:34:29,199 --> 00:34:35,440 politics can't, or something to that effect. You know, uh, I 417 00:34:35,519 --> 00:34:38,199 think it's something like diplomacy is war by another name or something? Yeah, 418 00:34:38,320 --> 00:34:43,840 yeah, right, yeah, when war is a form of diplomacy, right, 419 00:34:44,320 --> 00:34:49,199 whatever, it's a it's a really interesting situation. Hey, we're so 420 00:34:49,400 --> 00:34:53,079 lucky here in the United States are now, Uh we could sit back in 421 00:34:53,239 --> 00:35:00,880 our chairs on our zoom calls and pontificate it's not real to us, But 422 00:35:00,039 --> 00:35:06,400 that's what's happening. There's no other reason to go after Russia other than to 423 00:35:06,519 --> 00:35:12,320 plunder it, and we kind of did that after communism fell and Yeltson came 424 00:35:12,400 --> 00:35:16,440 in and we kind of pushed through all these oligarchs. But then you know, 425 00:35:16,920 --> 00:35:22,719 Yeltson got wise and he let Putin come in, and Putin replaced our 426 00:35:22,760 --> 00:35:28,480 oligarchs with his oligarchs. And hey, by no means do we support this 427 00:35:28,679 --> 00:35:32,760 man. I think he's a stone cold killer who's capable of anything. But 428 00:35:35,480 --> 00:35:40,360 I think big mistake initiating this war, even though he probably was pushed into 429 00:35:40,400 --> 00:35:45,519 it. Hey, well that is it for today. We really ran along 430 00:35:45,599 --> 00:35:51,360 there, But that's okay. Make sure you go to John's substack Rabino substack 431 00:35:51,440 --> 00:35:57,280 dot com our site Financial Survival Network dot com. John. We will will 432 00:35:57,360 --> 00:36:00,280 touch base in a couple of weeks. Thanks Jaredsia, Thanks for listening to 433 00:36:00,480 --> 00:36:07,000 carry Lens's Financial Survival Network your solution to today's trying times For the latest, 434 00:36:07,079 --> 00:36:14,719 go to Financial Survival Network dot com. Financial Survival Network now more than ever