Jason Hartman talks with Daniel Amerman about the likely results of the recent multi-trillion dollar increase in the debt limit. Dan is a Chartered Financial Analyst with MBA and BSBA degrees in finance. He is a financial author and speaker with over 25 years of professional experience.
Years of studying the costs of paying for over $100 trillion of US government retirement promises, as well as the costs of cashing out an expected $44 trillion of Boomer pensions and retirement accounts, have convinced him that too many promises and too much paper wealth chasing too few real resources will likely lead to substantial inflation in the years ahead, with potentially devastating implications for many savers and investors. A problem that will also apply to many other nations.
Mr. Amerman spent much of the 1980s as an investment banker helping Savings & Loans and others try to survive the effects of the last major bout of inflation in the United States. There is a basic economics principle that much of the public is unaware of – inflation doesn’t directly destroy the real wealth of goods and services, but rather, redistributes the rights to that real wealth (a principle which unfortunately will likely destroy much of the investment wealth the Boomers plan on enjoying in retirement). The author worked with the effects of billions of dollars of such wealth re-distributions, and saw how there was not only a loser for each dollar of wealth redistributed – but a winner.
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ANNOUNCER: Welcome to Creating Wealth with Jason Hartman! During this program Jason is going to tell you some really exciting things that you probably haven’t thought of before, and a new slant on investing: fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self-made multi-millionaire who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom. You really can do it! And now, here’s your host, Jason Hartman, with the complete solution for real estate investors.
JASON HARTMAN: Welcome to the Creating Wealth Show. This is your host Jason Hartman, and this is episode #217. Thank you so much for joining me today. You know, we’ve moved some of our planned and prerecorded episodes around, because we wanted to have a discussion today that is about the obvious current events that have been going on in the media. I’m sure you’ve been following this whole debate over the debt ceiling issue. And like they say—and I think this is totally appropriate—it’s not about the debt ceiling; it’s about the debt. That is the problem. But you know, that problem really turns into a big opportunity for us, who are following the plan that we’ve outlined. Because we are going to see, we believe, a lot of inflation in the future, due to our totally irresponsible government. And we as an investor, listening to the Creating Wealth Show, we know how to benefit from this, don’t we? And all of this completely illogical, irresponsible craziness that is going on can really, really help us win the game. I don’t like it philosophically, but as an investor, gosh knows, let’s figure out how we can benefit from it, at least.
And that’s what we’re gonna talk about today. So we have guest Dan Amerman coming back on the show. He was on some of the older shows a long, long time ago, and he’s just got some great materials. He really, really has a great understanding about inflation, and monetary policy. He’s a charter financial analyst, and I think you’ll enjoy this show a lot.
And a couple of announcements before we start that. Of course, be sure to join us for the Meet the Masters event coming up in October, and we’re just getting our arrangements figured out on that, so more to follow. But that’s coming up the middle of October; you can register at www.jasonhartman.com. And last show, on episode #216, I urged a lot of you to become a member, and many of you did. So thank you so much for joining our membership. And you can do this at www.jasonhartman.com as well. But it is critically important. I just closed on a property, another one that I bought in Indianapolis, and I put this one into an LLC, and I tell you, a lot of you I see you doing it. You’re making your life a lot harder and a lot more complicated than it needs to be. And frankly a lot more expensive than it needs to be, when it comes to investing. So, I strongly, strongly urge you to listen to the interview with Garrett Sutton that is in the members only section. It is really—I think it’s the best advice out there on asset protection. Of course, you know, I’m not a tax professional, I’m not an attorney. This is not my area. But with all the reading and the interviews that I’ve done, interviewing guests over the years about it, I really think he outlines a great strategy in that segment in the members section at www.jasonhartman.com. So join; it’s very inexpensive, and I think you’ll really get a lot out of that.
I have mentioned this before on a prior show, but we are coming out with a really interesting report on gold and precious metals. We have a lot of that in the Financial Freedom Report, and if you’re not a subscriber, I just gotta say, subscribe to the Financial Freedom Report, because it is just fantastic. The articles that we’re addressing there—and I hear a lot of great feedback from those of you who do subscribe, so I really want you to get a hold of that too. Again, a 16-20 page newsletter, and we come out with that, and we’ve got all sorts of great articles in there. And we get a lot of the genesis of the ideas—for example, for this gold report, really started in the Financial Freedom Report, where we covered sort of an executive summary, if you will, in there, and then did a bigger full report on it that I think you’ll find very interesting, and we will be out with that soon.
So anyway, here’s the interview with Dan, we’ll be back with that, in just a minute. And again, thanks so much for listening to the Creating Wealth Show. Please tell your friends about the show. Talk to you soon.
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JASON HARTMAN: It’s my pleasure to welcome back to the show Daniel Amerman. I’m a big follower of his work; I met him about three years ago, and we had him on the show quite a while back, and he talks about turning inflation into wealth. And with all this talk in the news about the debt ceiling, and the huge, huge fiasco related to that, I thought it would be a good idea to have Dan back on the show to talk about that in terms of the current events, and also some talk about derivatives as well. Dan, welcome. How are you?
DAN AMERMAN: Doing really good, Jason. Thanks for having me.
JASON HARTMAN: Good. Well, it’s a pleasure to have you back on the show. So, what are your thoughts on this whole debacle with the debt ceiling? I have a feeling I know what they might be, but I’ll let you tell the listeners at the same time I hear it.
DAN AMERMAN: What we’re seeing with the deficit limit was more or less just the surface cover up of the symptom of the problem. And what I mean by that is that when we look at the deficits themselves, they’re not the problem, of course. Not the deficit limit being 14.2 trillion, or whatever the number was. But the problem is the astronomical rate at which the left is racking up new debt.
JASON HARTMAN: Well, I think it was John Boehner who said—he said, the problem is not the debt ceiling; it’s the debt.
DAN AMERMAN: Oh, absolutely.
JASON HARTMAN: And I thought that was a perfect simplistic way to put it. But it’s absolutely true!
DAN AMERMAN: Absolutely. And, to really understand what’s going on, at the same time, we have all this discussion of jobs. And unemployment. Which is very appropriate. And as you may have seen, I believe the number that just came out is there were more layoffs in the last month than we’ve seen in the last 16 months. So things appear to be getting worse there. But the real problem is what happened in 2008 not having been fixed yet. And what I mean by that, is if you go back to 2007, we were in a situation where the private economy was 65% of the total economy. And of that, approximately $9.4 trillion was the private economy. And that fell to $8.1 trillion in a very fast implosion, kind of associated with the events of September 2008, which was a drop of about 14%.
JASON HARTMAN: In the private economy. Now, I assume you’re going to talk all about the government economy as well.
DAN AMERMAN: Absolutely. And you can’t understand any of this, as long as you fall for the illusion that is usually presented in the financial press, that there is one economy. Because that is what enables the deceit. The way we usually read about the economy, it’s the sum of both the private and the public sectors.
JASON HARTMAN: Right, and the public sector has been increasing so quickly, it’s scary.
DAN AMERMAN: It’s at a fantastic rate. It’s worse than most people understand. What happened was, the private economy fell by $1.3 trillion, in effectively a period of months. Which by itself is Depression with a capital D. But we didn’t see that happen, because simultaneously, the total spending by federal, state, and local governments rose by $1 trillion. So when we look at the two separately, we see this fantastic fall in the private economy. We see this fantastic surge in the public economy. But between the two, it was only a small drop. And the heart of the problem that we’ve run into, is that the private economy has never rebounded. So if you look at these current approximate deficit levels, these fantastic levels of about 1½ to 1.6 trillion dollars.
And one way I like to explain that is if you took every household in the country, and they ran a monthly deficit of $1000 a month, that’s equivalent to what’s going on in the federal deficit right now. So as long as we have the federal government creating an extra trillion dollars a year on top of what was already a problematic deficit, about $450 billion a year in 2008, then we’re gonna be at this extraordinary level of government spending. And probably the best way of presenting this that I’ve worked out, and this is part of an article of mine that’s gonna be coming out tomorrow, is that if you compare the ratio of the private economy—that’s what pays for everything, is the private economy—to the public economy, in 2007 there was $1.86 in private economy for every dollar in government spending. By 2009, that had dropped to $1.34 in private economy for every dollar in public spending. So we went from a little bit shy of two dollars in private economy for every dollar in public spending, to not that much more than a dollar in private economy.
JASON HARTMAN: And I believe the federal government’s share of the GDP now is somewhere around 20%, isn’t it?
DAN AMERMAN: I don’t even look at the federal government, because you have accounting games that go on there. Because what happens is, the federal government essentially creates or borrows money, and then it passes it to the state or the local governments. Without which the prices would have been much worse.
JASON HARTMAN: Right. It kind of reminds me of how Enron used to use SPVs, or special purpose vehicles. And that’s really what happens. It goes both ways, where the federal government sends money to state governments, but then it also takes money from them in the course of unfunded mandates, and regulatory burdens and so forth. So, it’s really hard to keep track of. You’re absolutely right.
DAN AMERMAN: It’s really federal spending, but it’s not shown in the federal budget, because it’s kind of a transfer, so to speak. And then what makes it much worse than that is the amount of Federal Reserve spending that’s entirely off the balance sheets, never even authorized by Congress, and so forth. But, the way I prefer to look at it is, total government spending. Federal, state, and local, compared to the total economy. And it was 35% in 2007. It jumped up to 43% by 2009, and it’s still at 41%.
JASON HARTMAN: Oh my gosh. That is a mind-boggling number. I mean, this is what socialism looks like. Or, maybe communism, almost. It’s crazy.
DAN AMERMAN: It’s a pretty amazing number. But it’s very hard. If you don’t understand that number, you’re not gonna understand what’s going on with the economy, or the deficit limit, the hidden depression and so forth. I wrote an article at the end of last year, beginning of this year, called the Hidden Depression. It’s gotten a lot of circulation. And what I did there was, I took a look at what’s really gone on with unemployment, which is something that most people are just not aware of. What the government has done is, it’s taken unemployment and it’s split it out into three separate boxes, and those boxes are never added together.
JASON HARTMAN: I’ve talked on the show many times about the discouraged workers falling off the unemployment rolls. I’ve talked about underemployment, I’ve talked about independent contractor employment, and you know, I know that one first hand, because when I, back when I owned a traditional real estate company that I had sold in 2005 to Coldwell Banker, I had many, many independent contractors working for me. And Dan, I can tell you, they show up as employed, but I promise you, some of those people, a year would pass by and they wouldn’t receive a check.
DAN AMERMAN: Yeah, that’s been one of the unfortunate side effects, is the sheer number of real estate agents who have fallen far below the poverty line.
JASON HARTMAN: But what you really need to understand—when people try to compare, like Paul Krugman, for example—he tries to compare the unemployment rate now, and he goes with the official numbers more often than not, to the Great Depression. And back in the Great Depression, people either had a job or they didn’t. It was much more clear. You worked in industry then, or you didn’t work. Nowadays, there’s this huge gray area of all this self-employed and independent contractor type people.
DAN AMERMAN: The issue is, when you take a look at those numbers, when we deal with it [unintelligible]. Which is if you look at official, what’s known as U3, unemployment, that’s right now about 9.1%, expectation is the next time it comes out it’ll be about 9.2%. Which is bad, but it’s a recession level of unemployment, rather than say Depression level. If you go to what’s called U6, which is as high as what the government goes in its estimates, that includes both discouraged workers and involuntary part-time workers. That’s the engineer who has a part-time job working at McDonalds, that the US government now counts as being fully employed. That takes you up to about 16.2% right now.
But where the part of the issue comes in with the deficit and with the debt, is this artificial and very inefficient economy that the government is trying to create to cover up that implosion of the private economy. If they stopped running those deficits, then the real state of the economy becomes true. In an instant. And right now, the deficit’s running about 10% of the total economy, which is a fantastic number. 10% economy is based on a bankrupt government borrowing what it can’t pay back, or else just flat out creating the money through the Federal Reserve, and effectively funding treasury bond purchases. If that government deficit spending disappeared, and 10% of the economy disappeared? At the very least, without including multiplier effects, we have another 10% unemployed right there, and that would take us to 26% of the economy. Which is greater than seen in the very depths of the Great Depression. But it’s just split out into these three boxes of official unemployment, the unemployed who aren’t counted because they’re discouraged or involuntary part-time, and the people who have jobs only because the government is creating money at a fantastic rate.
JASON HARTMAN: And unfortunately, the government, although it can be an employer, it’s a terribly inefficient employer, and a terrible inefficient, if you will, broker. It doesn’t create anything, and when you send it money, it largely wastes the money. So—
DAN AMERMAN: It does. And it’s a very ineffective source. But that’s not even the biggest problem! The biggest problem that I see is that we’re engaged in a cover up. Essentially, we’re taking these massive fire hoses worth of created or borrowed money, and we’re blasting it at the economy at a very ineffective manner, to create a semblance of having more employment than we have right now, but we’re not fixing what really needs to be fixed.
JASON HARTMAN: So what really needs to be fixed?
DAN AMERMAN: It’s the private economy. And all that we’re doing by spending these fantastic sums in order to cover it up, is we’re bringing forward the day where we collapse the value of the dollar. And once the value of the dollar is collapsed, that real unemployment that’s been there the whole time, comes out. The only difference being that you’ve wiped out everyone’s savings in the mean time.
JASON HARTMAN: Well, here’s the thing that I really wrestle with when it comes to a dollar collapse, or just further debasement of the dollar. It’s the big issue of, compared to what? I mean, compared to what? Gold, silver, the Swiss Franc? There’s so place, really in the world, that precious metals are truly used as a currency. The Swiss Franc is sort of a symbolic currency in a way, almost, in that it’s not widely traded. So, the dollar’s a disaster—I couldn’t agree more. But the problem is, what else are you gonna do? When you have the size of the US military that is rapidly using up its resources, unfortunately, it just seems like the US, although it’s a poorly managed house, it’s a poorly managed house in a neighborhood of homes that are inferior, largely. Am I wrong? Please debate it with me.
DAN AMERMAN: Oh no. You’re heading into an area where I have been, in the years we’ve known each other, in strong disagreement with some of the other people who write in this area. Because what they recommend is effectively shorting the US dollar against other currencies. And this is a great way of generating a lot of brokerage commissions.
JASON HARTMAN: Right.
DAN AMERMAN: In the short term. But the problem is that we’re actually in pretty good shape compared to Europe, at the moment. They’ve got even worse problems than we do. And it’s a very dangerous strategy to try to do that as well, because the central banks are liable to intervene at any time. And when regulators intervene, they can very deliberately punish investors and speculators, much like what happened with silver not too long ago, when there were four margin call raises in a very short period of time that temporarily knocked $6 off the price.
JASON HARTMAN: Well, actually with silver though, we went from about $50 down to about $35.
DAN AMERMAN: I’m sorry, I was off a digit. It was 16. It was about 34.
JASON HARTMAN: Right, right.
DAN AMERMAN: 34 and change.
JASON HARTMAN: And that was in a period of just, what, a week or so. I remember when that happened. It was a real calamity.
DAN AMERMAN: Absolutely. And it was because the regulators changed the regulation, in a deliberate attempt to destroy the speculators. So that’s an issue when you’re doing currency speculation as well. Now, when you say, what really happens when you have a high rate of inflation? What happens is, savers get devastated. The average person gets devastated. Somebody who’s been for decades, leading a productive life, working hard, making a net contribution to society—
JASON HARTMAN: Saving money—
DAN AMERMAN: Setting that money aside, as they’ve been told to do, and inflation takes it all away. And that’s where the real damage is done. So the place that I’ve been focusing, that I’ve been recommending people focus their efforts on, are not complicated international ploys where everybody’s in trouble, it’s hard to say what’ll happen at any one time with the exchanges and the traders and the markets and so forth, but the simple domestic plays, where the more the purchasing value of the dollar in your savings is destroyed, the more your own real wealth grows.
JASON HARTMAN: And what are those plays? I mean, I know that you and I are both—or at least, you were, and I haven’t talked to you in a while—a fan of using long term fixed rate debt to have that debt become debased by inflation. I actually coined a phrase around that, and I don’t know if you use this one too, but I call it inflation-induced debt destruction.
DAN AMERMAN: Yep.
JASON HARTMAN: And when I read your work, Dan, and I’ve been following you for a long time, I’m just in so much agreement with what you say. It’s amazing. Sometimes I recommend that people read your work and follow your work, and of course we’re gonna ask you to give out your website for the listeners. And then they send me back one of your articles and they say, Jason, this is exactly what you’ve been saying! And I go, I know! Dan is—he’s like my kindred spirit. It’s amazing.
DAN AMERMAN: Well, let me get a little more—maybe use a little bit of a metaphor to answer that. What I really like, is the combination of a hard asset that generates a cash flow. Because when you have a hard asset that generates a cash flow, unlike let’s say gold or silver, you can borrow against it. If it’s considered to be a reliable cash flow. And that’s the thing you can usually borrow against it. At the height of a credit crisis you can’t, but typically you can borrow against it. And, think of it in these terms. Let’s say that you’re in a valley, alright? And you know a flood wave is coming down the valley. And the floor of the valley is covered with sand, and around you are all these other savers and Baby Boomers and so forth, and everyone is building their sand castles out of their savings and conventional investments in dollar terms.
And you know that what’s gonna happen is an almost inevitable result of what’s going on with debt and the deficit and Social Security problems and so forth, is that it’s gonna be this wave of inflation come through, and it’s gonna knock away all the sand, or a big piece of it. Now, for me, the ideal strategy is, you get yourself this great, big boulder that’s not going anywhere. And you pay for not all of the boulder. I don’t recommend that people take chances, in particular with their retirement savings, and leveraging too far or anything. But with a controllable debt burden that you’re very comfortable, even in a very poor scenario that goes on for years, you’re gonna have enough money coming out of that property to cover the debt service of the mortgage. You more or less surround that boulder with sand, where the sand is the prudent level of debt that you took on to buy the boulder in the first place. The tidal wave, or flood wave, whatever you want to call it, comes down the valley. It wipes out the sand castles all around you, and it washes the sand around your boulder away. And what you’re left with is a much bigger boulder exposed than what you started with.
JASON HARTMAN: Ah, that’s an interesting metaphor. And what you’re saying, the boulder is a piece of income property. It’s a piece of rental real estate, right?
DAN AMERMAN: It has two things in common. One of them is, it’s a tangible asset. And one of them is that it generates a cash flow. And because it’s a tangible asset, though there’s never absolute guarantees, the odds are it’s gonna maintain its value to at least some extent if we do have a high rate of inflation in the future. And because it generates a cash flow, if you borrow prudently against that, you have the money to pay the debt on an ongoing basis as that debt is wiped away. So that’s a pretty potent combination. And then you’re left with both the asset—most of the value of the debt’s been wiped away—and you have that ongoing cash flow coming in as well.
JASON HARTMAN: Let me take a brief pause; we’ll be back in just a minute.
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JASON HARTMAN: Now, in an inflationary environment, where at the same time you have credit destruction though, and higher unemployment, the debt will be wiped away, the debt on that income property will be wiped away, which is great, but what happens to the value of that property, Dan? Vis-à-vis other assets? Maybe I don’t want to say value, or maybe you want to distinguish the value in real terms and nominal terms. You’re welcome to do that. But maybe I don’t want to say value; maybe I want to say price of the property. I’m not sure which.
DAN AMERMAN: Hmm…[LAUGHTER].
JASON HARTMAN: It’s a complicated question.
DAN AMERMAN: We don’t have nearly enough time to cover this. But my own background is in institutional finance. Years ago. Besides financing many billions of dollars worth of real estate, I also used to structure what were known as synthetic securities. And it’s how in real terms, the major wealth in the world is actually invested. And a problem in the personal finance world is that people focus on you were just talking about, which was asset value, and the institutional world at the highest level takes a different perspective, and it focuses not on the value of the asset, but the value of the differential. You’re actually indifferent to the value of the asset. All that matters is the difference between the value of that asset and the value of the debt that was taken on to finance it, because that represents your equity portion. So, let’s say the value of your asset drops 40%. If you take a conventional personal finance perspective, you say, that’s a disastrous scenario. My gosh, look at what just happened to me there. But, let’s say that we’re looking at this in inflation-adjusted terms. And that’s what really matters, and that’s the approach I take to look at all investment alternatives, is I do something few people do, because most investors can’t handle it. You look at everything in terms of after inflation and after tax. That’s a deadly combination for a lot of investments. But when you take a look at that perspective and you say, if in inflation-adjusted terms, the value of that hard asset fell by 40%, but the value of the debt use to finance it fell by 80%, then you haven’t taken a loss. You’ve taken a fantastic gain. You’re playing the differential.
JASON HARTMAN: Exactly. Playing the differential. It’s really an arbitrage. And one of the things that’s really interesting—
DAN AMERMAN: It’s a hard arbitrage for people to understand, because they’re used to thinking in just asset terms. It’s hard to get your mind around, it’s okay if your asset plummets, as long as your liability plummets more. In real terms, inflation-adjusted.
JASON HARTMAN: Absolutely, and that’s a very good way to put it. It is amazing to me, in working with real estate investors, that I find sometimes, people are complaining, but they’re actually winning, and they should be celebrating. But they just don’t know how to properly keep score, do they?
DAN AMERMAN: And the point of the matter is, as you and I have talked for quite a while, and in fact, the real estate scenario that I was running—it still runs—calls for substantial deflation in real estate. And you know, what I would show to people, and it’s still very much true today, is if they bought a property, and it went down sharply in market value, in the first several years, that it could be one of the best things that could happen to them long term. So as long as that property is throwing off the cash flow, to make the payments. Because as long as it does that, really with property, I’m not a flipper. I don’t think you are either. You’re working with long term values there. If you’re not a person that’s from a short term flipping perspective, where the play is all in the dollar value, what happens there is that if you’re playing for the long term, what matters in the short term is not the value of the property, so much. Because really, when you look at the total amount of debt and so forth, you look at a variety of other facts that I’ve discussed in my books and my DVDs, there’s a very high chance that we have a high rate of inflation coming out of it. And that’s gonna lift those property values, regardless of what’s happening with real values right there. The key is where your short term coverage is coming from. And right now we’re looking at falling vacancy rates. We’re looking at rising rents. We’re having more and more people enter the rental market. So if we’re comparing the size and the likelihood of our cash flow coming in versus the cash flow going out, we’re already, if you’re focusing on that factor, in a very positive real estate market even today. But people don’t see that.
JASON HARTMAN: I know they don’t.
DAN AMERMAN: People see the asset value falling, and they’re saying, oh, I’m getting annihilated here. Well, no you’re not. Not if you’re in there for the long term. In fact it’s just a strategic opportunity to acquire even more real estate, you could argue.
JASON HARTMAN: Yeah, really interesting. Well Dan, let’s wrap up on a little discussion about derivatives, because you made a prediction back when I met you and attended your event back in 2008 in Newport Beach. And that prediction has largely come true, hasn’t it?
DAN AMERMAN: It has, it has. And it kind of introduced a principle that I think has really worked out well. I used to, and I hope you don’t hold it against me, this is back in the 1980s, I was one of the leaders in structuring derivative securities. And I found an honest living after that point.
JASON HARTMAN: [LAUGHTER].
DAN AMERMAN: But I understand how they work. I understand very well how they work, because I used to create them. And what I had predicted to you, in early 2008, before the crash in September, was that the derivatives market was almost inevitably gonna be destroyed. It was gonna crash. Or at least would attempt to do so. And I was one of the minority of people who were talking about that. But the really essential point, as you might recall, is I said that wouldn’t be allowed to happen. There wouldn’t be a meltdown. There would be a bailout that the government would do of the large banks. It would require the creation of money without end, that would lead to massive government deficits, and eventually to the point where the Federal Reserve was creating money out of thin air to fund those massive deficits, which is exactly where we are today. And the key point that I’ve been making is that there’s—sometimes people get in this mindset where they think, the whole world is gonna collapse right here.
That does happen every now and then. But more often, you have to anticipate what the counterpunch is going to be, from the people holding the power, to try to keep from losing that power and losing that wealth. And unfortunately, that’s what we’re all stuck in right now. It’s the bailout, rather than the crisis itself, that has dominated economic events for the last three years, and still is. And that’s what we need to be investing for.
JASON HARTMAN: That’s a really good point, Dan. Because it seems—and I’ll criticize especially the gold bugs on this one. It seems that they’re always putting forth these disaster scenarios, these societal collapse, survivalism, etcetera. I think there is some validity to that, but my criticism is this: is that they talk about all of the reasons this will happen, and they outline them, and do that very well. But they never talk about the counterpunches! For example, with the precious metals people, they never talk about GATA, and the concept of gold price manipulation. You talked about it in the silver market just a few minutes ago, but, there are always countervailing factors. And counterpunches that are done specifically by the powers that be, that really have a huge impact on these things.
DAN AMERMAN: There certainly are. And that is part of the reason that—and I don’t want to knock gold bugs by any means. I have a lot of readers who are heavily invested in precious metals, and I do include some strategies—this has been some of what I’ve been doing since you and I last talked—that very heavily involve precious metals. But the difference is that if you risk everything you have on one vision of the future, and that vision doesn’t come true? You just lost everything you have. So, what I like to have is what I recommend that people have, is a vision where you’re prepared, if there is let’s call it societal breakdown, but you’re also prepared if there isn’t. Because the other big issue that’s been coming out, that’s been a hot buzzword over the last few months, and I don’t know if you’ve read a recent article I did on that or not, is financial repression, is kind of the other path that we go down. And in some ways it’s the direct opposite of the usual gold approach. And I would say in many cases it looks unfortunately more likely to me in some way if we’re going down this approach, this initial meltdown approach. And that is where by law, the government, since it has messed everything up, takes ever greater control over money, and what can be done with money and so forth. And if we go down that route, and you’re in an investment the government doesn’t approve of, and you’ve got everything you have in that investment, the government can pull the rug out from underneath you at any time.
JASON HARTMAN: Well, it’s kind of like being a bondholder in GM, right?
DAN AMERMAN: Yeah.
JASON HARTMAN: Look what happened to them. That’s a very good point.
DAN AMERMAN: So there’s a really good case to be made for structuring a flexible strategy that handles either meltdown or repression.
JASON HARTMAN: Very good way to look at it. Well Dan, give out your website if you would, so people can learn more. And do you still have your reading course available? I really enjoyed those, those were fantastic.
DAN AMERMAN: The website is www.DanielAmerman.com. And yes, I now have a new version of the Turning Inflation to Wealth mini-course available. It’s basically a free book that’s delivered to you at a rate of about two chapters a week, once you subscribe.
JASON HARTMAN: And that is a fantastic course. I love it; I’ve recommended that a lot of my listeners take advantage of that course, and I’d really encourage everybody listening today to make sure they get a hold of that. Dan, thank you so much for being on the show. Any final remarks you’d like to make?
DAN AMERMAN: No, I think that took care of it. I sure enjoyed it.
JASON HARTMAN: Alright. Appreciate it.
DAN AMERMAN: Thanks a lot, Jason.
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Transcribed by David
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