September 2019 Insider’s Report
We have your Insider's Report for September 2019. So let's jump on this. I'm going to keep you guys hopefully not too long. We got some interesting stuff, really interesting stuff. If you guys want some really good real estate information, market information, I would recommend following the real estate guys - Russell Gray and Gary Helms.
They have some incredible stuff. Market collapse - what are we going into? Are we going into some crazy collapse right now or what's going on? We got bond prices going crazy. We got the stock market going up and down. We've got things going on all over the place. Nationwide housing is faltering and there are just people can't afford homes and it's just insane right now, right? We have an election coming up in one year from now, just over a year from now, 13 months from now. We have some really, really big problems ahead of us. We've been saying this for years. If you have been paying attention over the last five years we've been doing videos and putting out content for all of you.
The Repo Market
So for those of you that have we've been telling everyone to that there are problems coming - that you can't print this much money. Just to give you a perspective, something gonna touch on it really quick. Just two weeks ago, the repo market failed overnight basically, and the Fed came in and was printing $50 billion, basically, a day. We were doing that 85 billion a month back in the recession, printing money. And again, we've gone through this, we've gone through the printing money scenarios over the years here on this channel and talk to you guys about what that means, what's going on.
The repo market, as we said, is basically really quick. It's just the banks lending to each other after hours, basically and just selling bonds with each other to recoup money for the day. Just short term, one-day transactions, things like that. And again, what it means to you. This is always about what it means to you, right Like, great, huge bankers, whatever, who cares Brandon? What does it mean to you? Well, it means that credit is gonna freeze up. Is there going to be a depression? Is it gonna crash? Those are the things you have to prepare for. Is the credit gonna seize up like that?
We are in a credit society. We're in $1.6-1.7 trillion student loan debt. We are in over a trillion-dollar credit card debt as a country. I've seen a bunch of stats recently. Most Americans can't afford a $400 or $1,000 emergency payment. You know, it's like 60% or 70% of Americans can't afford that. That's insane. You talk to people around the world. I've talked to the people that I know from around the world and they look at Americans and think, "Wow, you guys have a maid," and it's just like "You guys, have you seen these statistics here?" We're struggling as a nation. It's because of the $22-$23 trillion debt that we have on us. And again, that can be fine if you're producing, you're really producing actual things. We just don't produce what we used to. So the repo market would just touch on that quick. W.
What keeps you afloat?
What are things that can protect you? Again, what does this mean to you? What can keep you afloat? Well, cash flowing, rental real estate can keep you afloat. Whether it's a single family's, apartments, self-storage, senior housing, mobile home parks, doesn't matter. Those are big things that can keep you afloat and keep you going in a crash. If you bought it properly. That's the thing right now. We see a ton of people. I get people all the time coming to me and saying, "I don't even know the business that we've lost over the last five years" or people saying, "I want to go buy real estate, Brandon. I want to go rent, flip property." Flipping property is not investing. It's gambling. You're guessing that the market's gonna go up. You're hoping - the greater fool theory. You're hoping you're in, you're going to buy something and then sell it to a fool bigger than you are. And that's not investing. Investing is something that you're doing for return, for cash flow. Gambling is flipping though. You're flipping anything, it doesn't what you're flipping. You're gambling, you're hoping you can sell to the next person for more money. We saw people get caught with their pants down 10 years ago. So what keeps you afloat? Property bought well, that's cash flowing money to you. Positive income to you or business maybe, something like that. But rental real estate is one of the best things.
What else can hedge you?
Gold, silver, even crypto now. Those things can be hedges and create a smoother volatility pattern for you going forward. So again, these are things that we've talked about for years and we bring to you in the Insider's Reports. Big, macro-economic things going on. We're not going to get into all this stuff that's going on, obviously with Russia, China and all the different things that are going on right now, and Ukraine. There are so many things going on right now that are speeding up every single day, right? So how do you pay attention to it all? Well, you gotta get your financial self in order first, right? Get yourself on a gold or silver standard. The country doesn't need to be on it. The central banks, by the way, are buying tons of gold right now, especially China and Russia. What do they know? That we don't know, right? So when you start adding these things up, it's like, "Hey, what are we doing? What's going on." I think they know something that we don't know, just going to say that. It's not hard to see. These are again, some things you can do - nationwide housing in a crisis. We come in here and do the market updates every single day and it's just less and less and less inventory. It's becoming harder to sell homes at the same time because there are fewer people entering the market right now. Because of the volatility, the markets hate volatility, so there are fewer people entering the market, there's less inventory. So it's just slowly grinding to a halt. There's a percentage of people again this year, even though we thought that it was going to be "Hey, the dog days are over a year or two ago." No, they're still coming. There's a lot of things coming down the pike and it's just stuff we've talked about for a long time. The talking heads, they don't care. They're in positions that don't matter. So it's up to all of us to go do something about it and take care of ourselves. Jim Rickards is one of the guys I follow, a mentor of mine. He always says, "You can be on a gold standard. It doesn't matter if anyone else is or not. You can be on a gold standard, silver standard.
Taxes don't matter
I have in the article here. I don't have his name, but someone from the Fed, maybe one of the Federal Reserve boards, or St Louis or New York or something. And he said that "You know, taxes really don't matter." What do you mean taxes don't matter? Taxes don't matter. He's like, "Yeah we don't need taxes to cover the things we're doing in government. We have the printing press. We can just print money so we're good to go." So because of that, taxes are just there to punish people or reward other people. That's really all they're there for. Right? It's a stealth way of doing it. When you talk about inflation and things, the printing money, those are stealth taxes, right? Then there are actual taxes like this by punishing and rewarding people, right. Then stealth inflation just punishes everybody.
So in leading that to that, I'm finishing Buffetology - the great book I recommend reading it. There's Buffetology and then there's the New Buffetology I believe a thing. It's not the advanced Buffetology. There's two of them and he says "You need a 15% return. So if you are not making, if you're just holding money in the bank, you are going long on the dollar. You're saying the dollar is going to be here 10, 30, 50 years from now doing its thing, which is very well maybe. It just might not have the same power that it once did now. And we know at least when it globally, it probably won't. But we know for sure that purchasing power won't be the same cause when the Federal Reserve was created a hundred years ago, 1913, we have lost 95 to 96% of the purchasing power." So those old stories that you used to hear grandpa buying his house for you know, $8,000 and now it's worth 800,000, lest it's because of inflation. So Buffet talks about taxes and inflation - those two things. If you have inflation of say 5%, they say it's two an hour or whatever, three, it's probably around five in real terms, not the government statistics, but it's probably somewhere in five or six range or something like that. But just say it's five and then you get hit with tax as well, right? So you have to say 20-30% tax, and then you've got 5% inflation. You add those things together and you need at least probably a 15% return on your investments in order to just be making some money and staying even with what's going on. Otherwise, if you're less than that, if you're at five, six, seven, 8%, you're losing money every year. Your purchasing power is going down. So your dollar, in essence, you might not be losing money "but you are losing purchasing power." So in the future, say in a year or five years or ten years, it'll take more of those dollars you have in your account to go buy that same loaf of bread so that the loaf of bread will be $4 instead of two or three.
Anyway, that's our Insider's Report. As I said, I don't want to make these videos super, super long. We'll have longer ones eventually. I know we used to have some longer ones for 40-60 minute ones, but I want to get in, get out, give you this and make sure again, but we're behind a little bit anyway. If I want to make sure we're getting all of this content to you, that's more important than anything. I to make people think as well. I want people to think about some of the things we have going on. I think there's an underlying feeling, a sentiment that people have, humans have that innate intuition, right? We have that feeling of knowing something is going on, something's wrong. And that's what we have to try to figure out and snuff out. Because there are things coming and you have to protect yourself. That's in any market, right? Whether it's going up or going down, you gotta protect yourself and we owe it to ourselves. You owe it to yourself. You owe it to your family to go and do that, protect yourself. Know how the system works. That's all you can do.
So appreciate you guys more than anything. Your time or energy is the most important thing that we have. So I appreciate you giving that to us for years. As I said earlier, for the four or five years we've been doing this, I really appreciate your time because it is the most important asset. So I appreciate you guys. We will see you in the next episode. If you have questions, comments, concerns, please put them in the comments here, on the Facebook Page or on the YouTube channel (@legacygroupmi). If you're in podcast listening, please go to @legacygroupmi and put your questions, your comments there and we'll gladly answer them again. We get a ton of you commenting and saying stuff off-air or direct messaging us. We really appreciate it. However, if we could put some of those on those comments, on the public forum, that way we can help as many people as possible. So I appreciate you guys. We'll see you at the next one.