Introduction:
Todd Schoenberger is the Managing Partner and Principal at LandColt Capital. He joins the show to discuss trading volumes during the market run-up and ObamaCare‘s recovery after a poor start.
Key Takeaways:
(6:14) Scotland & secession movements
(9:08) Jason discusses an interesting property
(12:54) Introducing Todd Schoenberger
(13:28) Some thoughts on the Affordable Care Act
(21:20) Discussing the stock market
(29:45) Discussion of metals
Links:
Visit LandColt Capital at www.LandColtCapital.com.
TMSchoenberger on Twitter
Bio:
Todd M. Schoenberger began his career in the financial services industry as a Broker with Merrill Lynch & Co. where he specialized in helping individual investors achieve financial independence. After Merrill, Todd joined Legg Mason Wood Walker as an Institutional Trader where he was responsible for managing over US$140Million of cash for several publicly traded technology companies.
After the stock market bubble burst, Todd teamed with an institutional mutual fund company named Rydex Funds where he trained financial professionals on the intricacies of using leveraged mutual funds inside sophisticated market-timing strategies. Todd then helped to create AnnuityNetAdvisor.com, an online variable annuity provider specializing in low-cost, investor-friendly insurance products for financial advisors. After ANA.com, Todd decided to test his knowledge and formed his own no-load variable annuity known as the Genesis Variable Annuity (www.GenesisAnnuity.com), which is distributed globally to individual investors and financial professionals.
Todd’s been on a media blitz, appearing on CNBC’s Squawk Box and Kudlow & Co., Fox News Channel’s Forbes on FOX and Cavuto on Business, Ringside Politics with Jeff Crouere, Business for Breakfast w/ Wayne Candace, WMAT Investments Advisor Review and Money Matters Financial Network, to name a few. Tune in to this episode as you learn more from Todd Schoenberger on Trading Volumes & the recovery of ObamaCare.
Audio Transcription:
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: Greetings, and welcome to the Creating Wealth Show. This is episode #415, and this is your host, Jason Hartman, coming to you today from Cusco, Peru, where the elevation is about 11,000 feet. Had a great day here. It’s been a great couple of days. I just got back from the gym, here in this gorgeous resort where we’re staying. I’m with a group of 13 friends. A bunch of them between, a little meeting we had, and dinner, some went to the gym, some went to the spa, and so forth, and some just relaxed and took a nap. But I decided to go to the gym. The one thing, as much as I love traveling, and here I am at country #72, if you can believe that. I sometimes can’t believe it. When you hit 100, you’re in the centurion club. And that’s not just age. That’s countries visited. I went and I did the elliptical. Now, I don’t know if I was doing it a lot harder than usual, but, I usually do the treadmill, I just don’t have my tennis shoes with me, so I did the elliptical instead. I was on that elliptical for one minute and 28 seconds, and at this altitude, I was huffing and puffing! I’m really wondering what the equivalent is for being at, you know, in Phoenix basically it’s sea level, close to it, and being this high. Is that equivalent to running 10 minutes? Or doing 10 minutes on the elliptical? I’m not sure. But that was a little bit shocking, how quickly I got tired with this thin air.
Today we started the morning with great breakfast, and then we all went on horses and ATVs, and we had this gorgeous lunch that our host set up, with tents, out in the wilderness—you know, in the middle of nowhere, basically—overlooking this gorgeous sacred valley, which is the area we’re in here in Cusco. Overlooking that valley, and a beautiful lake, and it was just a stunning, stunning thing. They set up a tent for us to have lunch in, they set up a tent for the people to cook and prepare food, and then they set up—get this—another tent that was the outhouse, with a little marine portable toilet. And it was a very classy affair. It was really, really well done. And after lunch, we had a business meeting. We went around the table, and all 13 people shared different challenges they’re having in their businesses, and we kind of masterminded for about an hour and a half, and that was really, really enlightening, and we talked about doing things that are significant, not just about business, and money, and economic financial stuff, but really, you know, what is the next cut?
And I remember, many years ago, discovering that book—forgive me, I’m not getting the title exactly right, but it was something like, moving from success to significance. And I think that’s where everybody gets at some point in their career. Hopefully they get the chance to be at that point sometime in their career. Maybe if someone’s had a corporate job for many years, and they kind of feel like they’ve made a good income, they’ve made money, they’ve hopefully invested in income property, and that has made them even more money, with good returns on their investment. After that, you know, it’s like, what’s next? What do you want to do with your life? I think we all struggle with that from time to time, and feel lost from time to time. I certainly know I do. It was just a really enlightening, great conversation that the 13 of us had around that table today. And you know, sometimes you really need to just get out of your environment, and get into like a neutral place, preferably a beautiful place that’s inspiring, in some ways, and just do that. And so, the experience will continue tomorrow, and for the next week that I’m on the trip here, and I will let you know more as it progresses.
Also, it’s really interesting watching, of course, foreign news; whenever I travel I’m always reading foreign newspapers, and foreign news, and you know, you get such a different take on things. I’m watching the BBC here; it’s on in the background. Of course the big news is Scotland. Will Scotland separate? We’ll see how that vote goes. It makes me think of the United States, and I have predicted before, and I have a feeling I’m gonna be right, you know, I hate to say it, you know, if I’m sounding a little bit gloatish here, but I’m usually right on these predictions [LAUGHTER] so, the one I’ve been wrong about, that I always say, is interest rates. I thought interest rates would be quite a bit higher by now.
And by the way, speaking of being right on predictions, my guest a couple episodes ago, my very interesting guest, Jawad and I, Jawad Mian, we talked about Bitcoin and oil prices. Oil prices here, Wall Street Journal just two days ago, it says, oil prices sink as worldwide supplies rise. Pressure is increasing as weak demand and robust global production leave extra crude sloshing around the market. Basically, it’s talking about how oil prices are declining. Now, my guest, Jawad, very bright guy, very interesting, and I completely agree with him, certainly about Bitcoin, we talked about that.
And by the way, several of the people here on this trip with me are very into Bitcoin, and some of them own Bitcoin-related businesses, and so it’s interesting to kind of debate the subject with them. And again, I’ve said before, when it comes to these alternative currencies, I would love to be wrong, but I have a feeling I’m gonna be right, and I don’t think they have any great future. So, I agree with my guest Jawad Mian, recently talking about that. If they don’t have the support of the government and the central banking cartel, the most powerful entities on earth—good luck. It’s just not likely to happen.
Scotland & secession movements
Talking about secession movements, okay? So, I have long predicted that if—probably anybody listening is fortunate enough to live out their full natural life, which I have also predicted, I think will be a lot longer than we expect—I think we will see serious secession movements if the federal government, and certainly I believe that it will, continues to be so overbearing. It may well start with Texas, and I have long said that if Texas were to secede from the US, it would become the Hong Kong of the United States, as achievers, businesspeople, producers, entrepreneurs, the John Galt types from Ayn Rand’s classic book, Atlas Shrugged, and now, I guess, part three of the movie is out. Although I haven’t seen it. I’m not in the US, and it came out while I was away. But, any place like that where there is a libertarian style of government—you look at Singapore, you look at the incredible success of Singapore. It just is a great example of how laissez-faire government creates incredible innovation. Businesses and entrepreneurs, they flock to those kind of places, and they create value, they create jobs, they create innovation, and that’s the way it should be.
Another interesting thing in the news is CalPERS—you know, that’s the giant, giant mammoth public employee retirement fund. It says on the front page of the money investing section of the Wall Street Journal—yes, good old newspaper, in paper
form. There’s something about paper, when it comes to books and newspapers—I mean, they just—they’re not quite going away yet, are they? Anyway, it says, largest US pension plan will shed $4 billion investment, citing the strategies, cost, and complexity, and it says—sorry, I’m reading you the subtitle first. The title of the article is, CalPERS to pull out of hedge funds. If you remember my episode with James Altucher, you know, as we talked about hedge funds, these investments just don’t have good returns overall! You know, they have the two and twenty fee structure, they’re very complex, and look at CalPERS, that is steeped in the Wall Street world, with their investments. They’re fund managers. I say that the strategy is too costly and too complex. So, there you go.
Talk about secession. Refer back to my episode I did a while back, a few months ago, with Meredith Whitney—actually, that might have been a year ago. Boy time flies. But Meredith Whitney—that was really an interesting episode, where she talked about the state of the states. That’s the title of her book. Refer back to that. When you want to see where to invest, really, Meredith Whitney outlines it pretty well. A prior episode—if you just go to JasonHartman.com, and you search State of the States, or Meredith Whitney, that episode will come right up, and you should definitely, definitely listen to that.
Jason discusses an interesting property
Our guest today, by the way, is Todd Schoenberger, with LandColt Capital. He’ll be with us in just a few minutes here. But first I want to tell you about an interesting property. We’ve always got interesting properties at JasonHartman.com/properties. This one is in good old Memphis. Just shows you—I mean, there are still some good buys out there. Of course, they are spotty. There aren’t as many as there used to be by any means, but this property, I’ll give you a great example here. I mean, it’s in a nice neighborhood, it’s in a good zip code, it’s a three bedroom two bath—you know, the stereotypical rental property. 1423 square feet. $64,900 price. And that equates to only $46 per square foot. People are constantly asking me, how much do I need to invest? How much do I need to get started? How much do I need if I want to build a portfolio, and I want to do a six pack, and I want to have six properties? Well, if you can qualify with 25% down, including your closing costs, you can get right into this property—and this is a great property—for about $20,000. And you’re buying it for below the cost of construction! Which is pretty hard to do nowadays. The past few years we’ve seen prices increase so much that getting in below cost of construction just isn’t that common anymore.
So, $46 per square foot—it would probably cost you about $70 per square foot to build a house like this. Maybe $75 or $80. The projected rent here is $850 per month; after all of your expenses you’re looking at $232 per month in positive cash flow. So, just looking through the rest of these projections here, $2778 annually—let’s look at debt coverage ratio is almost two, which means double, okay? It’s not quite that good. It’s pretty awesome. If you have a one debt coverage ratio, okay—this is for the super conservative investor that wants to think, what is the worst case scenario? Am I likely to ever get into trouble with this property? Basically, about half the time, this property could go completely wrong, and you could still support the debt on the property. If it was rented only about half the time. Because the debt coverage ratio here is 1.89. Giving it a cap rate, although, cap rates aren’t really enough information, and that’s why I don’t like that metric very much—9.1%.
But look at this. A cash on cash return of 14% annually. 14%! I always say, if it only goes half as well as expected, you’d get 7%. And that’s about 14 times what you’d get in a bank CD. That means it’s 1400% better than a bank CD. Even if it only goes half as well as expected. And that’s just cash on cash return. Overall return on investment, 37% annually. And you’ve got all your conservative assumptions in there, conservative national average appreciation rate over many years, vacancy rate, management fees in there. Maintenance is at 5%, so 5% of the income, every month, goes towards maintaining the property. So, again, you know folks, just don’t be the person that hesitated and missed out on these opportunities. Okay? Because they’re truly, truly phenomenal. Make sure you take advantage of that. As the old saying goes, don’t wait to buy real estate. Buy real estate and then wait. Put time on your side. Put inflation and irresponsible government spending on your side. Put all of these things that usually hurt people, on your side.
So with that, let’s get to our guest, and he will be right with us, in just a moment.
[MUSIC]
Introducing Todd Schoenberger
JASON HARTMAN: It’s my pleasure to welcome Todd Schoenberger to the show! He is managing partner and principal at LandColt Capital, and we’re going to talk today about the economy, investments, and maybe a point or two on ObamaCare, because there’s some recent news about it. Todd, welcome. How are you?
TODD SCHOENBERGER: I’m doing fantastic, thank you for having me.
JASON HARTMAN: And, just to give our listeners a sense of geography, where are you located?
TODD SCHOENBERGER: Actually I’m in Lewes, Delaware right now.
JASON HARTMAN: What are you doing there? That’s the corporate capital of the world, or at least the country, right? Delaware.
TODD SCHOENBERGER: That’s right, it definitely is not known…no it’s not, but it is a nice place to be for the summer, though.
Some thoughts on the Affordable Care Act
JASON HARTMAN: There’s this recent Bankrate survey about ObamaCare; I just thought I’d kind of get your thoughts on it before we jump into some broader economic and investing topics.
TODD SCHOENBERGER: That’s right. Well, at Bankrate.com, actually came out with a wonderful survey, it just rolled out about a week ago. And in this survey, it was taken, they were really trying to get a gauge of American sentiment right now, because we are several months into the Affordable Care Act with implementation. So the feeling was that even after the hiccups that ObamaCare, the rollout had at the very beginning, and there have been some fixes here and there, they really wanted to know what Americans were feeling about going forward. So, the survey was interesting. It was somewhat telling, actually, because you still have the majority of Americans right now that don’t feel that the Affordable Care Act is actually in the best interest of the country. So, right now, with the Bankrate survey, it actually showed that 7 of 10 Americans in this survey are actually feeling quite negative with ObamaCare, and they actually, 43%, if you want to dissect it even further, think ObamaCare’s even bad for the country. What is interesting though, Jason, is that the survey did tell us that you had, based on high wage earners, you had a little over 2/3 of Americans actually feel that ObamaCare is not that bad for the economy, and they—these are the people that are not on ObamaCare, they’re not relying on that type of government-issued healthcare coverage, because they already had it with their employer. So chances are, in years like 2015, 2016, when you start seeing that spread, and that migration from employer-sponsored plans to a government-sponsored plan, it’ll be interesting to see how Americans feel about it then as well.
JASON HARTMAN: Like, most leftist political ideas, they purport to help a certain group of people, and they usually end up hurting that group of people the most. It’s just—people get completely the opposite of what they vote for, usually, when it comes to this kind of stuff. So, you know, it’s interesting when they segment that, in the Bankrate survey about the high wage earners. Because overall I would agree, I think it’s bad for the country. I don’t think the country can afford it. We’re just in crazy debt, and completely insolvent, you know, if the government won’t let us tap all of our energy resources and so forth to get back on our feet, and if they keep impeding business. But that’s another issue. The high wage earners, like you said—they don’t have to deal with it. They can deal with private plans. I have a private plan. I didn’t even consider the Affordable Care Act. A lot of them own businesses, so, you know, they can just outsource all this to the government, right? I mean, you know, they’ve changed their workers’ schedules, they’ve converted full time to part time workers so they don’t have to comply with a lot of issues, and so forth, and maybe it really is better for high wage people. And business owners. Right?
TODD SCHOENBERGER: Right now, here’s the thing. And you bring up a brilliant point, Jason, because when you start looking at it from the high wage earner, you start thinking of business owners. So, for example, for your listeners, say you own a corner gas station. You are a small business owner, but you’re considered a high wage earner, because chances are, that money that you’re earning at your corner gas station is actually passed through as ordinary income. So, here you are, you are making money, you’re an entrepreneur, you own this business. The issue, though, and this is where I think the real hesitancy of everybody getting behind this thing, especially in Congress—but the feeling of, that small business owner may be reluctant to go out and hire more people, because therefore, you’re gonna have to force that small business owner to essentially take money out of his pocket, out of his ordinary income, and is forced to buy healthcare coverage for an employee if they reach a certain criteria at 30 hours or more. So, going forward, the question remains to be seen. Hasn’t been answered yet, but how this will impact the job market, and the job [indiscernible], because actually, you want people that are working. You don’t want this to be a hindrance. So, it’ll be interesting, over the next 24 months, because now that the challenges that the rollout had, as those fixes are taking place, and they’re continuing to take place, but it will be interesting to see, over the next 12, 24 month period, as more Americans do migrate to this, how that will impact wage earners and also jobs in this country.
JASON HARTMAN: We’re not gonna belabor the Affordable Care Act point here. But it really needs to be discussed on any economics and investing show, because, healthcare is a giant part of the economy! And it has major impacts on fiscal and monetary policy. So, you know, it certainly deserves some attention. But I think, ultimately, Todd—I’d love to get your thoughts on this. Americans have complained for decades now about how you can’t get a secure job anymore. Whatever happened to the idea of going to school and then, you know, working for a company for 40 years, and having faith in your employer, and them having faith in you, and having security, and getting a gold watch at retirement—well, those days are long gone, since we started reengineering the corporation, and the economy. And something like ObamaCare really puts even more pressure in the job insecurity world. It really pushes employers to want to subcontract everything out, and make everybody a freelancer, because undoubtedly, this 30 hour requirement, I bet, and this is just a total prediction, that you’ll see in the future, legislation coming out as employers have adjusted to this, and made the former 40 hour people 29 hours. You’ll see new pressure saying, well, the new number should be 25 hours, or 20 hours, and so every part time Starbucks employee—although Starbucks might be a bad example, because they do offer pretty good healthcare, from what I understand. But, you know, every part time retail worker that just has a side job, the employer, they’re gonna try and burden this employer with it, and it’s just gonna be more and more employers wanting to outsource, use freelancers, replace people with technology whenever possible. As I’ve done in my own businesses.
TODD SCHOENBERGER: Well, that’s the thing. Because, here—if you start taking away hourly earning, for an employee, and you’re doing this because you’re staying away from having to be forced to buy health insurance for that employee—well, that’s one thing. But look at the impact that that has on the employee. Because now the employee has less money, and if they have less money to work with, then they have less money to go out and spend, and therefore, they’re not gonna be able to buy the big ticket items, the items that really move the US economy. So, the thing about it is that one thing that wasn’t discussed a lot was with that GDP rate that we just had, gross domestic product, for your listeners, in the last [indiscernible] came out at =1%. And when you see that at -1%, you have to wonder, did the impact of ObamaCare going into place—did that have anything to do with it? Because, remember—if you start taking workers, and you’re taking away money, and you’re keeping it out of their pockets—well, clearly that’s gonna have an impact on discretionary incomes. That has an impact on discretionary incomes, people aren’t spending money, and that’s a big, big issue. The other side of this too is that we—really started seeing it in the second quarter of this year, were retail sales. Now we had retail sales data across the country that has just been absolutely horrible. And even on the housing side it wasn’t that great either. I mean, we just completed the home buying season, and people were just not buying homes, and they clearly aren’t then buying durable goods, things like ovens and washers and dryers. So, the impact to the overall economy—there was this feeling of an excuse of using the cold
raw winter that we just had, and I think a lot of people felt that that was the reason for all those poor weak macro data that we’ve received. But there is this underlying whisper that is taking place, that maybe it has something to do with the ObamaCare rollout. So, that does remain to be seen, where the third and fourth quarters end up, but right now it’s not looking so great.
Discussing the stock market
JASON HARTMAN: They do say that socialism is nothing more than trickle up poverty, right? So, here we go. Here we go. Let’s talk about the market. And when I say the market, I mean the stock market. What do you think of these run ups? I mean, I don’t know. Yesterday I had Robert Kiyosaki on the show, and he talked about the Dow, at a triple peak. When you look at these in real dollars—I mean, there really have been no real gains the last decade or so. Or they’ve been very minor. Again, and you know, if you take into account the real inflation number versus the officially reported numbers, of course that’s subject to people’s opinion, and I’ve got mine and you’ve got yours, but you know, people are really losing ground. It’s just—maybe they’re in for a really rude awakening here, I don’t know. What do you think?
TODD SCHOENBERGER: You bring up some interesting points. One thing to keep in mind is that right now, statistically, you only have 52% of Americans that are invested in a market. And they’re invested either direct or indirect. And what I mean by that is they could be invested through a 401(k) plan, maybe they aren’t investing directly, say with Charles Schwab, for example; they’re investing in a mutual fund, or maybe a pension plan, indirectly. So, when you start thinking about 52% of Americans—I mean, keep in mind, back in 1980, you had 280 million Americans living—according to the census bureau—and you had 50% of that 280 million that were actually invested in the stock market. And then you fast forward up into the year 2000, and here you had some 300 million Americans, and we actually had 60% of Americans were actually invested in the market. Now, here we are 2014 here. 310 million Americans, and roughly only half, a little over half, are invested in the markets. In other words, where I’m going with this, for your listeners, is that you have a great deal of Americans that are not participating in the full rally. And when they’re not participating, that means you have this top heavy [indiscernible] approach where you have many people, they choose to spend, they’re not saving, and then they’re at the bottom side, and then the top side, they continue to invest. What’s happening is that as the markets continue to unconditionally rise on their own, then you have that other side of the barbell of people who are invested in markets, and they’re actually seeing some very big gains.
That’s how you’re creating wealth for America, and I think that something that after the economic implosion that we had in ’09, you had a number of Americans that really felt, yeah, they still want to be in the stock market. But the problem is that they’re actually hurting themselves.
JASON HARTMAN: So, you said 52% directly or indirectly. Now, how does that compare to historical averages?
TODD SCHOENBERGER: Look at it this way. Let’s talk about the fact that you have 52% of Americans, but where you really can see the evidence, though, Jason, is in trading volumes. Trading volumes are anemic. There’s nothing going on. As a matter of fact, in the month of May in this year, we traded about 5.6 billion shares per day. That was the lowest May that we’ve had since 2007. Think about this. Where I’m going with that statement, for your listeners, is that you now have less people that are invested in the market, and therefore, you have less people that are trading, and the markets just continue to rise. So in other words, there’s not a lot—there’s not that big catalyst out there to create a sell off opportunity, and if you were an average investor and you’re waiting for that big sell off to happen, I gotta tell you, it’s probably not going to happen. Because unless we go into war—I mean a major, major violent conflict for this country—you’re probably not going to have a big swing down in the markets right now. Case in point is that even with all the turmoil in Iraq, you still have oil prices that—they are continuing to rise. And guess what else is rising? Oil and gas stocks! They still continue to rise. Including the markets. So, it really doesn’t matter what’s taking place in Iraq, unless you start having some serious bombs that are taking off, and a lot of people getting killed.
JASON HARTMAN: Overall I don’t know if I’d say you’re an optimist. You’re sort of a—there’s not gonna be downturn, but you’re not saying that there’s gonna be an upturn, right?
TODD SCHOENBERGER: Here’s the thing. I wouldn’t say I’m optimistic, because it’s a buyer beware market. Because every trader on the street is gonna tell you that this market is being held up by two things. And there’s probably going to be one thing that knocks everything down. It’s a house of cards situation. So, what is that going to be? I gotta tell you, everybody thought it was the poor weather, and it wasn’t that. Then we thought poor earnings. Wasn’t that. We thought the jobs picture, because it still is very fragile. That’s not it. So, what is going to be the catalyst? And maybe it’s higher oil prices, but realistically, Iraq has to really crumble in the next 72 hours. Which it may; which it may. And if it does, then you’re gonna see oil top over $115 a barrel. That’s gonna really start pushing Americans to afford our market at the pump; that will have an impact, and that would probably be a catalyst for a little bit of a swing down in the market, but here’s the thing. I don’t know if that’s going to happen. I don’t know what ISIS has. Who knows. But realistically, it’s just something that is a buyer beware situation. You gotta have one eye on regular TV, and knowing what to do, so these current events—you gotta have another eye on what the markets are doing.
JASON HARTMAN: Yeah, okay. So, it sounds like you’re speaking pretty short term too. On the overall macro picture, you know, with all of the resources we have back here in the good old US of A, I think, you know, overall, the pressure on oil prices is—it’s gonna be lower! I mean, in real dollars. You know, I’m talking adjusting for inflation, of course. We’re—ask you if inflation or deflation, what’s the future hold, because that’s another interesting subject. But overall, don’t you think oil prices—there’s gonna be downward pressure on oil prices? You know, macro. Longer term.
TODD SCHOENBERGER: Here’s the best statistic for you, for your listeners. Human beings in the world consume 85 million barrels of oil a day. We pump 86 million barrels of oil out of the ground each day. So if those numbers crisscross—if you have any type of supply constraint, oil prices are going to rise. Now, currently right now export data tells us that Iraq is pumping 2.6 million barrels of oil out each day. So, let’s remove Iraq out of the equation, and now you have global supply, you have a major supply constraint, because you’ll have people that are using more oil than you have pumping out of the ground. So what do you do then? Then you have to start looking at petroleum reserves. And now you have that great petroleum reserve, you know, out of Cushing, Oklahoma here in this country. We start pulling oil out of there—well, that’s a huge security risk. And that’s the problem. You have so many people in America, middle America, they don’t understand that, that that is a major—the reason why we have those reserves in place is for national security. It has nothing to do with the prices.
JASON HARTMAN: No, I agree with you there. But you’re still talking very proximate here. I’m talking about the overall, you know, the overall situation. You know, forget about Iraq. I mean, you know, that’s—these are not long term issues, necessarily. At least not in my eyes. I don’t know, maybe I’m crazy. The long term issue, in terms of supply—North Dakota and the oil sands, and all of the reserves under California. The natural gas being so abundant—it seems like we’ve really just discovered that the US is sitting on a lot of resources we didn’t think we had a few years ago. A couple of decades ago, everybody was talking about peak oil! Look how that changed! You know? It changes as often as Al Gore’s theories on the climate, okay?
TODD SCHOENBERGER: Right.
JASON HARTMAN: You know?
TODD SCHOENBERGER: I’ll add to this. I’ll add—in conclusion, the interior department of the government has said that we have enough natural gas off of our shores to heat every home in America for the next 10 years. But that would require off shore drilling, to get that gas. And the problem is, is that because it’s a heavily political topic, the chances of that happening are probably quite slim. But unfortunately—I mean, you are right. Fortunately, we do have the resources. But unfortunately, we’re probably not going to take advantage of these natural resources here in this country.
JASON HARTMAN: I think that’ll ultimately change, though. That political stance will change as the pressure mounts and the prices go up, and you know, if the administration hopefully changes next time around, you know, we may have a Keystone Pipeline and some real energy production, and maybe we could become an exporter, as we should be. You know? But anyway, that’s sort of another thing. So, what do you think about the metals?
Discussion of metals
TODD SCHOENBERGER: Well again, it’s another inflation hedge. You have gold, that’s been rising for the past two days based on Janet Yellen’s comments out of the Fed. There is an eye that they’re keeping on inflation, but we know that inflation is now at a record high, and we saw the data that came out yesterday. I mean, you have food and energy in this country at the highest they’ve ever been, and you know, it’s really costing quite a bit, and the problem is, is that as you see inflation in that area, the question will remain, is that, how do you get the government involved to try to turn that? And the only way that the Fed can do that is start increasing rates. You have a real feeling now that gold is gonna be in favor for the rest of the year, because inflation—there is a—it’s a very hedgy inflationary environment right now, and as long as food and energy continue to rise, which they are expected to in the third quarter, at least, you’re gonna have this real push, and a real appetite for metals. So, you can start looking at gold. You can start looking at—even at copper. Copper’s a big one. And so, at those levels, I think—if I’m an investor, that’s where I’m focused right now.
JASON HARTMAN: Give out your website, or any information you want people to know as to where they can find you.
TODD SCHOENBERGER: I encourage everyone to follow me on Twitter. My handle is TMSchoenberger, and that’s where you’ll find updates on the firm, as well as myself and other media appearances that come up.
JASON HARTMAN: Fantastic. So, on Twitter, it’s TMSchoenberger, and Todd Schoenberger, thank you so much for joining us!
TODD SCHOENBERGER: Thank you Jason. You take care.
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