Jason Hartman started the show with investment counselor Keri and talked about the red flags to watch out for when making cash deals and dealing with new providers. In the interview segment, Jason hosts James Ledbetter. James is the Founding Editor of Slate’s financial site, Big Money, Editor of Inc. Magazine, a contributor to Reuters and Time, and author of One Nation Under Gold and The Great Depression: A Diary.
Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
Announcer 0:13
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the company leet solution for real estate investors.
Jason Hartman 1:03
Welcome to the creating wealth Show episode number 857. This is your host, Jason Hartman. And I want to thank you so much for joining me today. We are going to do the intro portion with one of our investment counselors Carrie, who’s back on the show, and I promise I’m gonna let her talk this time. Carrie, thanks. You got to do some talking. Okay, so I’m gonna shut up.
Jason Hartman 1:26
Just been in you know, you gotta just take control. See, Carrie, you’re too nice. That’s polite. And our guest today will be James lead better. He is the editor of ink magazine. He’s a contributor for Reuters Time magazine and The Village Voice. And that guy’s just got a great history. He’s author of a couple of books. His most recent one is one nation under gold. And you might be thinking, Well, you know, here you go. Why are you talking about gold? Jason, this is a real estate Show. I’m telling you folks, even though I am completely not a gold bug, you You’ve heard my story, I’m, um, I don’t want to say I’m like anti gold. I’m just not pro gold. Okay, I’m kind of neutral. I think that most of these investments, precious metals, stocks, pretty much everything except income property and your own business are pretty darn lame, because they’re not multi dimensional and income properties, the most historically proven asset class in the world, because it’s a multi dimensional asset class. But I think you’ll find the interview with James who is, by the way, not a gold bug either. He’s acting as a journalist when he wrote the book. And I think you’ll find it to be interesting because, you know, it’s historically it’s a big deal. It’s an important commodity and an important form of money. So Carrie, welcome back. So we want to jump in, you’ve been doing a really nice job of cataloging all of these questions we’re getting from our air pod contest. You can win some apple EarPods if you go to Jason hartman.com slash contest. giving those away I have it as a podcast listener, you will love this product if you don’t have these air pods yet. There’s like a six week wait for them. They are phenomenal. I love this product. It’s probably the best product Apple’s done in five years or so. So we’re giving some of those away and we’ll wrap up the contest real soon and announce the winner. But as you have been entering the contest, you’ve been posting some great questions and comments, which we’re going to endeavor to address on the show. So Carrie, one of our show guests and longtime client who just got up between he and his wife, Sue to their 20 home Fannie Mae Freddie Mac limit, they’ve now got 20 properties, that is Captain Gary Pinkerton, who has been on the show before he has a question here in your document. Why don’t you tell us what his question is, and that’s gonna lead segue very well into a another related topic. Go ahead.
Keri 3:55
One of the largest risks to investing success is not doing a good deal with a bad person. So the challenge Gary’s had is finding is to Germany. In the good times when everyone’s making the money who the actual bad people are. They show themselves when they went as Warren Buffett says that tide goes out. So his question was, what have we found? Are the set are the telling signs that we can highlight to find a bad person?
Jason Hartman 4:20
that’s a that’s a great question, Carrie. And, you know, I have long said, I would rather be in a B market, like, you know, not the best real estate market. I’m talking geographically, like, not the best city. But I’d rather have a team in a B market and a B city, then the other way around a B team in a market because the team is the most important thing, this whole thing lives or dies on the quality of, you know, not only the properties, but the provider, the local market specialists that we pick, and that’s why that’s We’re not doing deals in foreign countries. I mean, I don’t want to say we never will I just haven’t found one that works. You know, we’re not doing this crappy stuff in these third world developing countries where there’s no regulation and you have no recourse whatsoever. And there’s just a lot of promoters promoting a lot of crap out there. But even in in the US, you know, there’s a there’s a lot of Crux and what happens, like Gary’s comment about the tide going out, is when, when the money is just flowing like crazy, and the market is crazy. That’s when screening becomes a big thing. I remember when I was 20 years old, and I was taking real estate classes at century 21 corporate office in Anaheim, California. And Dennis McKenzie, who was the author of several other real estate books was just this great teacher. And he talked about that. He said, in a booming market, your biggest job is screening. You know, it’s screening the people you’re dealing with because every flake comes out of would work, you know, in a recessionary time when it’s a more of a buyers market than a seller’s market, then you know, only the strong survive. Okay. And that well not completely sometimes the weak survive too and the unethical But mostly, you know, so screening is the big job and carry that is what you do.
Keri 6:19
Yes, yes on a regular basis, I am constantly following up with providers that we have some from the past some new ones. And just rescreening and making sure you know, nothing comes up. That would be a big red flag, which we found lately in one of the providers. We were about to take on.
Jason Hartman 6:37
Yeah, yeah. So this tell us which market is this. We’re going to save them by not getting sued again and not mentioning their name. But tell us about this company. This, this XYZ real estate company and where they’re located.
Keri 6:52
So XYZ is located in Toledo, Ohio, and we thought they were a unique provider. They had some Good strong returns, you know, good credibility out there. And they were, you could only do cash deals though they weren’t finance. So that was one kind of, okay unique idea that we could bring on for those cash buyers. Not your ultimate ideal buyer. But, you know, just another option. So we said, okay, let’s give it a try and let’s get it out there. But towards the end of, you know, just about to launch them. We were going through the routine of, you know, how do we close the investor? You know, what’s the process? We’ll offer referrals for inspection reports. And right away they said, No, there’s no inspection reports. They buy the turnkey property as is
Jason Hartman 7:43
are you freakin kidding?
Keri 7:46
And you had to get your inspection report after you close the property. And so that was a huge red flag that you know what
Jason Hartman 7:55
it means. Can these people actually say this crap with a straight face. I mean, Yeah, you know, inspection report after you close the whole point of an inspection is to be a good buyer and not make a mistake and do it before you close, obviously. I mean, that seems so obvious, right? Right. These people really with a straight face, we’re saying that our buyers were not allowed to do inspections before buying they. In other words, they wanted to pull the wool over their eye. And by the way, Carrie, this is one of the things our listeners need to understand. Whenever you have someone who will only do cash deals, that should be an alert. I’m not saying don’t do it. I’m just saying, buyer. You know, that old Latin phrase caveat emptor, I think is how you say it buyer let the buyer beware. Well, if it’s a cash deal, the buyer needs to be more aware, because when you have a lender involved in the transaction, that’s sort of another check and balance right. They’re going to do an appraisal. You know, they’re gonna have some requirements, they’re not gonna protect you from everything. I mean, it’s, you know, it’s not your lenders job to do your home inspection, okay? But you’re gonna have some, you know, additional additional safeguard there an additional check and balance, whereas if it’s cash, it’s just, you know, the Wild West. I mean, there, there’s not going to be any lenders title insurance policy. So, you know, it’s more possible you could have title problems, it’s, you know, there’s not going to be an appraisal that and appraisers inspect properties. So, it’s not a home inspection, there is a major difference, but you know, the appraiser does a basic visual inspection, just looking at the house. And then when they say something like this, like, don’t have a home inspection, you got to just instantly think what are they hiding? It’s that’s just absurd. frickin ridiculous.
Keri 9:53
Right? Yeah. What kind of secrets Do they have and you’re not going to find out as an as an investor out of state. You know? That’s what the lender, as Jason said, the lender, the appraiser Inspector, they’re going to find that stuff out for you. And being not sight unseen. You have no idea. It’s just too risky,
Jason Hartman 10:11
way too risky. It is. It’s way too risky. And I mean, the fact that they would even put this in a document is beyond absurd. Okay, let’s just look at this. Let’s just look at this email you sent me I gotta blow up the screen because it’s on voxer here, but I’m seriously. So seriously though. This house is one of the best deals of 2017 it’s absolutely stunning three bedroom blah, blah, blah. And Carrie, is there anything we should share with our audience out of this out of this image? You know, the one I’m talking about right?
Keri 10:43
Yeah, I have it in front of me. Well, it’s just the language isn’t up to standards for what our our investors our clients would want. This is
Jason Hartman 10:53
Oh, I love what they say. This is a thing. Okay, the F word, a class deal and in my opinion We’re 10,000 below market. Right?
Keri 11:02
Right. Yeah, that’s the same one. Yeah. So it’s just
Jason Hartman 11:05
it doesn’t look like s like shit.
Keri 11:10
Yeah, so a few explicit words in there that just, it’s just not up to standards. And and those are the red flags. I just stopped at all, then we just had to hold this and pull it from potential provider. Yeah,
Jason Hartman 11:23
yeah, that’s a that’s a great point. And one of the things that I just love about you and the rest of our team, Carrie, is that, you know, you’ve really all take the long term view, you know, you’re not, you’re not like these quick buck sales, people that are certainly exist in the world. You know, and I think one of the things that might be beneficial about our company culture that makes that true, is that you guys have to deal with all the problems. You know, because the investment counselors are the one that ones that have to follow up. And when the client calls and has problems, you’re doing kind of that customer service role, if you will. And, and I think that kind of ties the two together. It’s certainly not the most efficient thing for the business. But, you know, I think I think it’s a good thing to have to put the investment counselors at stake, if you will, in in the client success,
Keri 12:20
right. Yeah. I mean, we know you’re out there, you’re coming to us and you’re going to buy a property. So it’s just to find you the right property. We’re not just going to throw you something that, you know, in a year or two, you’re going to just come back and growling at us. You know, you’re going to buy it, we know it. So we want to help you the right way.
Jason Hartman 12:37
Yeah. So we’re property agnostic. We are area agnostic, and we are local market specialist agnostic. I do want to make one distinction on what I said about cash deals earlier. And that is that if you do a cash deal with a cash only local market specialist, that’s when I want the alert. signed to go up, if you do a cash deal with a local market specialist that, you know, normally find lets you finance the deals, okay? That’s a different thing. That’s not a big cause for concern. It’s a little bit of one because just remember, there’s no safeguards, like, no one’s gonna tell you, you know, and I’ve done this myself, I mean, you know, I, I try to admit my own mistakes, okay, and, you know, be transparent about them. I’ve made many of them. I have closed on properties that I purchased with cash, with no insurance. No one alerted me. You know, I just wasn’t used to it. I, I forgot about it, basically. And if you don’t have a lender, the lender is not going to say, hey, that’s a condition of closing, right? If you’re buying with cash, they’re just gonna close the deal for you. Okay, and, and I have literally lost a few sleepless nights where I thought, Oh, my God, I have this property like first thing in the morning. You know, if it’s an East Coast property, I got It’s 7am or 6am, I’m up cuz it’s 9am there and I’m gonna get an insurance policy. My god, I can’t believe I did that. What a screw up, like, literally if someone slipped and fell on that property or if the property burnt down that night, I’d be That’s it, you know, Come on dad. I’m just paying for it. And that that can happen on a cash deal, right? There’s no appraisal, there’s no value safeguard. So you got to be a little more concerned about is the value really there, okay? Because there’s no appraisal not to say that appraisals are by any means perfect. They’re massively flawed. I mean, appraisers appraise properties Too high and too low all the time. Okay. It’s not perfect by any means. But you know, it’s something right, it’s an additional check. So you got to be careful on cash deals.
Keri 14:48
Well, this one particular provider that we may ended up passing, they did have around the hundred thousand dollar deals, you know, where lenders could take that property, but other providers might have it under 60,000 where you You have to do the cash deal, and you can’t get a lender to finance that. So that’s one thing also that they were pretty higher end deals to not make it just cash, but we could have financed it.
Jason Hartman 15:10
Yeah, let me elaborate on that for you, because I’m not sure people know what you mean. So on on the really inexpensive lower end properties, a lot of times those are sold for cash, just because they’re sort of not worth financing sometimes for necessarily the buyer and the lender. A lot of lenders have minimum loan amounts, it’s like, Look, you know, they’re not going to make a loan for under $50,000. So if the house is 60, and you put, you know, 25% down, well, the loan amounts way below $50,000. Okay, and it’s just not worth it for them. I mean, you know, like a car loan is bigger than 50 grand a lot of times, right. So, a lot of those lower end properties are sold for cash, but again, we’ve talked about the myth of the $40,000 house too. So that’s another topic we’ll go into today, but yeah, Good stuff. Well, Carrie, thank you for sharing this. Gary also made a comment. Do you want to share that with our audience?
Keri 16:06
Sure. Yeah. So Gary’s comment is basin is an educator at heart and has proven again and again that he is a principled, ethical person that maintains a consistent message. He sticks to his 1010 plus commandments. So many podcasts and radio show host blow in the direction of the individual plane to be on the show or that is sponsoring the show. awesome content, great education. incredible person.
Jason Hartman 16:30
Gary, you’re you’re my biggest fan. I love you. Thank you. Awesome. That’s awesome. But you know, yes, you got to be consistent and you got to believe in something. I think the problem? You know, I remember a long time ago, one of my early mentors Denis waitley. I remember listening to his tapes. Yes, they were tapes cassette tapes, that used to you know, become tangled and the tape used to come out on the machine and the problems we used to have carry before your time. You remember cassette tapes, right? You’re not bad young
Keri 17:06
boys to men,
Jason Hartman 17:07
Boys to Men on cassette. Okay. Yeah, you remember I bet you don’t know what an eight track tape is, though.
Keri 17:13
No.
Keri 17:15
No don’t even know what
Keri 17:17
I’m trying.
Jason Hartman 17:20
So that was like this bigger cassette tape that you would put into your car and it was like big it was like the size of a, an old VHS videotape, you know, or the size of a book a small book. I mean, it was ridiculous eight track tapes. Yeah, yeah, I even remember those. So, wasn’t gonna say about that. I don’t know where it was going with that. A Tate’s Oh, Denis waitley. He said, You’ve got to stand for something. If you don’t stand for something, you’ll fall for anything. And you know, you got to have some core belief system and that’s what the 10 commandments or as Gary said the 10 plus because now we actually have 20 really help you do as an investor. They help you stand for something, you have an actual philosophy, something that’s grounded, you have a real outline and a real methodology. And, you know, though those are those are sort of your foundational principles. And you go from there. Of course, there’s more to it than that. But that’s your foundation. And it’s, you know, it’s something that I think is just just critical. So, Carrie, thank you so much for joining us. Um, let’s before we get to our guests, let’s tell people about some of the stuff worth thinking about. Okay. And I’m talking about Hawaii, remember our messages back and forth? About Hawaii?
Keri 18:36
Yes, yes. Okay. So no, I don’t know. I don’t to explain. Oh, were
Jason Hartman 18:41
you were you not in this conversation? Maybe it was just Sarah and I’m attributing it to you. I don’t think you were on that chapter. It was with Sarah. So we’re thinking about doing our first event in Hawaii. Yeah. profits in Paradise, maybe we’ll call it profits in Paradise, that’d be a good name. So, you know a lot of a lot of our clients in Asia and you know that side of the world it’d be in we have a lot in Hawaii, who are listening. Hi, Hawaiian Aloha, not Hi, hello, aloha to our Hawaiian plants, you know, just thought it’d be nice to go to why we’ve been talking about doing that for the venture Alliance mastermind group. And Heck, maybe we’ll just do a seminar there. So stay tuned for that. You know, we might do it, we might actually do it. So keep that in mind. But in the meantime, yeah. Wouldn’t it be cool, go to Jason hartman.com slash contest, and enter to win some apple EarPods.
And let’s get to our guests. James, lead better editor at ink magazine. And Carrie, thanks so much for joining me on the intro. Here’s James. It’s my pleasure to welcome James lead better to the show. He’s founding editor of slates financial site, the big money, former opinion editor at Reuters and editor at ink magazine inc.com. Time and The Village Voice, author of The New York Times best selling book, The Great Depression, a diary and the new book one nation under gold. How one precious metal has dominated the American imagination for four centuries. James, welcome. How are you?
James Ledbetter 20:22
I’m great. Thanks for having me. Jason. My pleasure. Give
Jason Hartman 20:25
us a sense of geography where you located
James Ledbetter 20:27
New York City, Manhattan. Fantastic. So the new book is quite interesting. And I just want to say to our audience, to maybe start because we were talking a little bit off air about this. You are not a gold bug. And you don’t really have an agenda. You’re a journalist, right? Yeah, absolutely. I mean, I’ve written this book one nation under gold, about the American obsession with this particular metal. That doesn’t mean that I own it. It doesn’t mean that I advocate that people own it. Also Through that I am not saying people should not my point is more historical, that gold, for better or worse is written into the American DNA. It’s in our Constitution. When you have the discovery of gold in California in 1848, you create all of a sudden and kind of from nothing. This sense that the West Coast is just as important, if not more important than East Coast for a brief time, the San Francisco Stock Exchange becomes more valuable than the New York Stock Exchange during this period. Globally, suddenly, this kind of you know, quazy bankrupt, former colony called the United States becomes a global center of power of finance, because of gold, and that, again, for better or worse is written into who we are as a country, and you can’t erase it, you can’t quite at any given point make sense of it. But that’s who we are. And that’s the thesis of my book.
Jason Hartman 22:11
It’s fantastic. So, you know, you write about something that I guess no one has ever really written about before. There’s something that happened under the Johnson administration in the 60s. Now we all know, you know that Nixon finally closed the gold window in 1971. And, you know, we’ll talk about that, but let’s go kind of in a chronological fashion, and tell us about what happened
James Ledbetter 22:33
with LBJ. So Jason, let me set this up a little bit. In the post war period, you have what’s globally known as the Bretton Woods system. In this system, the dollar is fixed to gold at the price of $35 per ounce of gold. Every other major currency in the world the franc, the Deutsche Mark, the yen is fixed to the dollar. So it’s all kind of tied to gold. And the bands in which these currencies can trade is very, very narrow. This works really well. It works, arguably, to well, the development of Western Europe and Japan in the 50s. And 60s, creates a system in which you have so many dollars. And so many dollar denominated securities out there in the world, that if they were all to be redeemed at the Treasury window, where they’re supposedly exchangeable at the rate of $35. Now, you’d have no more gold, that’s a problem. That’s a big problem. You can either say, Hey, we’re not going to exchange money, which is a disaster, or let it all come in. Another disaster and there is really no way out of this. So the increasingly what you find if you look through the file, of Washington at this time is a kind of panic. the Johnson administration thinks it can come up with a solution, which is basically let’s find gold, where it has never been found before. And because it’s 1965 they call it what else would they call it? operation Goldfinger, right, named after the James Bond movie that was hugely hugely popular at the time. Operation Goldfinger top secret no one has ever written about this because the documents have just become declassified as I published, my book has three components. One, let’s use state of the art technology to find gold, where it has never been found before. So is there gold in meteorites that hit the Earth? Is there gold in seawater? Is there gold in animal brains? Is there gold in deer antlers? I mean, honestly, you can’t make this stuff up. And the answer is well, yeah. Kinda, there’s some if, once the technology gets sophisticated enough to be able to measure parts per million parts per billion, you can find traces of gold in almost anything in your pencil in your hair, whatever. But when the price is fixed at $35 an ounce, it’s meaningless, right? It would cost you a gazillion dollars to get the golden deer antlers, so it’s sort of silly. Second thing, kind of like fracking. We know that there’s gold in, you know, mine x in Nevada or New Mexico or Arizona, but we’ve got the majority of it out of the ground at $35. Now, there’s a good chance that there’s more gold further down into the mind, but we can’t get there using conventional explosives. What if What if Put a nuclear bomb in the ground and blew all the gold up and Leach it out. I mean, this was
Jason Hartman 26:07
Yeah, if you’re an environmentalist, you can’t be a gold. But at the same time, those are contradictory.
James Ledbetter 26:12
In the mid 60s, you know, people weren’t really thinking about and but by the time they actually get to experimented with this, you know, and by the way, many experiments along these lines were conducted. Finally, you know, cooler heads prevailed, but, but it was a it was a very serious line of inquiry. And the third aspect of gold finger was, well, can we make gold out of base metals? I mean, yeah, I mean, this is a centuries old, how can we quiz and the answer is, yes, it can be done. The head of the Atomic Energy Commission, Glenn seaborg, a great scientist for whom multiple elements are named after the actually does it later. In 1980, kind of trying to do something else, but you take very, very thin bismuth foil, bombard it with a particle beam and you displace some electrons and what you’re left with is a form of gold. However, there’s a big big however seaborg calculates at the time that to produce gold by this method would cost approximately one quadrillion dollars per ounce. Right? So it’s, it’s, it’s off the charts, it can be done, it’s just not worth doing so not worth doing. With the technology gets better and the price goes down Jason, here is evidence of a monetary system that has gone off the rails the logic, if you need to find gold this badly, then then the idea of paying your monetary system to gold is clearly wrong. Something needs to happen to break it. It also happens under Nixon, it might have happened later Johnson but it had to happen one way or not.
Jason Hartman 28:04
Okay, so So what is the result of operation gold finger then basically leave it to Nixon
James Ledbetter 28:10
closed the gold window in 71. It kind of fizzles out like Yeah. Okay, now Now you could make an argument in the private sector, that some of the methods that they deployed actually rejuvenate the private gold industry. And by the way, by the 1980s, the otherwise dormant United States gold mining industry has it has a Renaissance. It’s fantastic. I mean, it doesn’t become a world leader, but it’s, it’s way way off of the doldrums that it was in the 1960s. And so, to some degree, operation, Goldfinger succeeds in terms of inspiring the private sector, but but basically, it all Just fizzles. And and and and but more importantly, the relationship between the dollar and gold finally breaks down in 1971 August 15 1971 Nixon kind of quietly interrupts an episode of Bonanza on a Sunday night and says, We’re gonna, we’re gonna temporarily suspend the relationship between the dog well, temporarily It’s been more than 50 years so I think it’s kind of the government solo tells you taxes temporarily you know or any any monetary thing that’s gonna benefit them it’s never temporary.
James Ledbetter 29:36
And
Jason Hartman 29:37
James James Yeah I got some questions for you because I want to kind of focus this discussion as to number one let’s listeners need to know why this discussion is important to them. Right. So, you know, gold you I am definitely not a gold bug. I think that’s a totally flawed asset class. It’s one dimensional. You know, I like investing in real estate. Okay, income producing real estate. That’s a multi dimensional wonderful investment. But But, you know, gold is a good measuring stick. It’s something that, you know, throughout history people have used as this measuring stick and it’s interesting to see the rise of all these cryptocurrencies now. And I’m sure you’ve probably covered that early stay No, no look at a little bit.
James Ledbetter 30:14
And, you know, where is
Jason Hartman 30:16
this going? I mean, for example, just a broad question here, and we can circle back to you know, the Book More specifically, but
James Ledbetter 30:23
what does the future look like?
Jason Hartman 30:25
does the future look inflationary deflationary? Or is it kind of, you know, just stagnation? What, what, what are we looking
James Ledbetter 30:32
at? It’s a great question. And, you know,
James Ledbetter 30:38
people of a certain age I’m in my 50s. I grew up in the 1970s, when inflation as as officially measured was kind of out of control. worldwide. I mean, stagflation you know, massive inflation and some of this was a hangover from the Nixon shock of take the dollar off. Cool. By comparison, in, in, you know, in, in the larger economies, we seem to, you know, knock on wood, thanks to I think the monetary policy of our big bang, inflation is more or less under control. I mean, it’s 2% 3% in any given year, it’s good, but that’s understated. We all know that. But you know, it’s still relatively low, right? Compared to Argentina or compared to like, what it was when when compared to Jimmy Carter, right. Well, exactly. Well, exactly. And, and and so under those circumstances, the desire to move to gold should be and kind of, you know, arguably is very understate like, who I mean, who cares, right? If if we’re not having massive inflation, what is the impetus to move toward gold and yes, and get because of the Great Recession because of the obvious shortcomings of the current monetary system, there is always going to be a constituency that says the solution is gold gold standard. Now, I don’t agree with that. But the point of writing my book, one nation under gold, is to try and understand what are these people saying? Why did they believe what they believe? And what does that have to do with our, our DNA, our history as a nation? What is the connection between this bit of political rhetoric and kind of who we are? That’s the book that I’ve written? Yeah. So the future it sounds like you think is inflationary? Right. I do. I mean, I, in the sense that I don’t believe that there’s going to be any return to a gold standard. It’s it’s simply too complicated. And also, it would be it would be massively disruptive. Let’s just thinking through. If we were to, if you and I have a deadline tomorrow at 8am, we have to restore the United States dollar to a gold standard. What would the valuation be? like today’s market price?
James Ledbetter 33:17
An average over, I don’t know, three years, five years, I don’t think you could do it. All the credit
Jason Hartman 33:24
in circulation and not just a monitor of the money supply, but the credit supply. There’s like a bazillion dollars an ounce.
James Ledbetter 33:33
And imagine what that would do to the global economy. So so it’s not really an option. And yet it remains politically a attractive and attractive, kind of glittering prize for a certain sector of mostly republican voting population. And I find that fascinating. And again, it’s it’s almost uniquely American. Like if you go to France, are you going to Japan, you’re not gonna find 20% of the population that thinks that they should have a goldson. But in America, it’s it’s, it’s kind of still really attractive even though or maybe because it’s never going to happen. And I that’s really what drove me to write the book one nation under gold. Yeah, very interesting.
Jason Hartman 34:21
So he wrote that other book about the Great Depression. Are there any lessons? Of course there are I mean, this is like a rhetorical question, really. But you know, what lessons maybe I should say, should we learn, you know, from from what happened in the past man.
James Ledbetter 34:36
In the depression book, my co author, Dan Roth, who’s still alive at 90 Plus, it was it was his father’s diary. Fascinating. The Great Depression diary. I really, really encourage readers to find a copy of it. His thing in that era was an insurance policy. That was literally the difference between No starvation you mean an end we don’t mean an
Jason Hartman 35:03
actual insurance policy, you mean insurance
James Ledbetter 35:06
of your own like savings. I mean an actual actual life insurance policy that you could cash out for money. And that is how he funded his daughter’s college education. That’s how he got through the lean years. Now, I’m not recommending this as a 21st century. Obviously, finance policy I’m not but but I really encourage people to read the book, The Great Depression Adar, it’s fantastic. But that’s how that’s how we got through, you know, in terms of the 21st century, again, I’m not pro gold, anti gold. If people want to hold gold as part of a broader portfolio that represents you know, less than 10% of your portfolio value. Go for it. I’m in no way. Anti gold, my point Is that, for better or worse in America, gold brings with it all of this as it were baggage that that we should know about if we’re going to take it on either as an individual investor or as a country, in terms our currency, and that we really need to know we’re doing historically and most people don’t know that. And that’s why I wrote the book. Interesting stuff. So tell us what’s going on in ink magazine. How our business is booming out there. I am right now in in the process of closing the September issue. Our September issue is the Inc 500. The 500 fastest growing companies in America. It’s my favorite thing to do. It’s our biggest issue of the year. We come up with these great stories, looking at you know, the real engine of capitalism in the United States, which is small and growing businesses. You have to have a $2 million revenue. All your third year you have to be have have been in business for three years. And it’s super fun. Jason, it’s my absolute favorite thing to do right now. And you’ll see it all in the September issue.
Jason Hartman 37:13
So I’ve got a question about that. That really is a barometer on the economy. How are businesses doing? I mean, are they you know, you’ve been doing Inc 505,000 for many, many years. How old is that, by the way, that count?
James Ledbetter 37:26
The franchise is about 25 years old. So for 25 years, I mean, are these companies growing faster than they were? You know, are there is it growing particularly fast now? What does that tell us? We’re at the fastest pace ever. But you put your finger on something really, really important, which is this year. political uncertainty. These companies don’t know what’s gonna happen with health care. They don’t know what’s gonna happen with Trump. Where we’re what 100 quarters into economic growth, there’s gotta be a recession coming anytime soon, no one knows exactly what and and one of the things that we try to do is to really focus on companies who are able to grow even through this period of tremendous uncertainty. And that’s a wealth you’ll have to buy the September issue, but it’s great stuff.
Jason Hartman 38:17
You know, it is just amazing to me though, how innovative these entrepreneurs are, I mean, just ideas that you you never saw
James Ledbetter 38:25
it.
James Ledbetter 38:28
It’s incredible. People come up with businesses in the craziest places. Here, you know, there’s a business in having people painting in bars, right? Like you have a bachelor party or bachelorette party. You take your 12 people out to a bar and they all paint and drink wine at the same time. I would never come up with that in a million years, fidgets spinners, you know the craze of the year. All this people are endlessly creative and the great thing about the United States We have a structure for our economy, where these kind of crazy ideas can become businesses almost overnight. If you were in Venezuela, or if you were in France, or if you were in Japan, it could take you, you know, weeks or months to start a business. Yeah, you know, that’s
Jason Hartman 39:19
just blows my mind that politicians in the US and people in the US think the US should be more like Europe. Listen, I was born in Europe. I was there a few weeks. I was there just about a month ago. I’m going back next week. Europe is a disaster. Okay, let me just tell you a Europe is a frickin mess. And to think that you want to make the US more like Europe, you’re out of your tree. Get your head examined, please. Europe sucks. Okay, now it’s got Europe Europe’s got great culture and, and you know, yeah, I know I’m
James Ledbetter 39:54
just in Italy myself. Yeah,
Jason Hartman 39:55
yeah, no, I mean, I love going there. It’s It’s cool, but like what I want to live there. And B be under that economies thumb. Do you know how hard it is to get anything done in Europe? I mean there’s like obstacles galore the government gets in your way tradition gets in your way and people live in monopoly
James Ledbetter 40:14
monopolies Don’t be yeah we have ways I monopolies we have to do opposite. Like if you’re in Italy man, you’re dealing with Telecom Italia. If you’re in France, you’re dealing with France Telecom. Like that’s it like you there are no you know, Sprint’s or T mobile’s or whatever, like you’re dealing with the government or recently devolved from government monopoly,
Jason Hartman 40:40
or a union. Okay, that is run your life and beyond strike or you’re going to have to join the union to get a job. It is pathetic. I mean, the people live in crappy little houses, they drive crappy little cars. They have crappy little stores with no selection and really high prices. I mean, it’s just there’s just not enough competition. There’s not a free month. But it’s but it’s a mess. And then the French president says people should only have to work 32 hours a week, you know, you’re going exactly the opposite way. You want your country to prosper incentivize people to work. You know, it’s just it’s just a joke. It’s a disaster.
James Ledbetter 41:14
Yeah. Well, this is a little far afield from where we started. But it’s Jason, it’s great to talk to you.
Jason Hartman 41:21
Yeah, absolutely. Likewise, and get out your website and tell people where they can get the book or you know, ink obviously, everybody knows about it. But sure.
James Ledbetter 41:30
So one nation under gold calm, a recently launched website for my book, or just buy it on Amazon and Barnes and Noble, your local bookstore, and of course, ink magazine inc.com. Please look for our Inc 500 issue in September. Fantastic. And James, I really loved hearing about gold singer. That was fantastic. And you make me want to watch the James Bond movie again after I read your book and then learn more about pretty good. Yeah. Excellent. James lead better. Thanks for joining us. Jason’s pleasure.
Jason Hartman 42:02
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