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 State the same house prior to covid in 2019 was about 260 000. today that same home is about 440 000 Nationwide and so that's an astronomical increase hi this is Mike Maloney and I want to introduce everybody to a new friend of mine Carl Krueger Carl how are you doing uh doing really well Mike thank you good thanks for joining in yeah you're a Financial Consultant right what's your title of senior wealth advisor with a firm in Houston uh so we're yeah we basically are a personal financial advisors okay

so you've got some information that you posted recently on your LinkedIn site uh can you show us that and uh go over it a little bit for us uh and it has to do with real estate and yeah so sure yes so basically you know one of the one of the things that as you all know Mike in the um recent uh you know with the recent rise in interest rates and some of the post-covered um uh you know peculiarities with the money supply or obviously the money supply has increased dramatically after covid combined with you know

significantly Rising interest rates what if interest rates interest rates have gone up something like what four almost five plus percent in the span of uh you know just the past year and a half not even quite a year they've gone up two five plus percent they have gone up by like fifty eight hundred percent exactly right right so that's it right I agree with you on that right so in terms of affordability of housing uh in the United States of course that's had a dramatic impact as we were talking about

and so when you look at this is actually a chart that kind of highlights up and so when you look at the um basically home affordability we're now at one of the least affordable times ever in U.S history uh at least in modern history yeah going back to the late 70s early 80s yeah you know uh when it peaked there uh hang on one second I I'm in a I'm traveling I'm on the road I'm in a hotel and uh I just need to take a closer look at this at your chart because it's pretty small on my laptop

and uh so there's a percentage on the side oh okay uh as a percentage of income 70 percent well that's impossible to maintain uh to sustain and that was uh 1980. um you know what's interesting is um real estate wasn't at the end of a bull market it you know it's it maintained its bull market it was incredibly resilient for a long long time and uh the uh it was more toward the beginning of a bull market then so now you've got these uh overpriced homes in this new interest rate environment so

this is a measure you know with the if you take the same home year after year what's it going to cost you to buy that home and finance that home with the interest rates what percentage of the average income is it going to take exactly yeah it's pretty breathtaking and it shows you that the real estate bubbles really should be popping at any moment yeah and so some of the Dynamics you know now um are it's debatable but it may may have changed you know when you go back to the late 70s early 80s of course

during those extreme you know uh periods where you had super high interest rates uh and very high inflation that the Fed was you know attempting to correct for um that basically um back then you know housing eventually corrected in price you know significantly you know with those High interest rates today it's debatable we'll have to wait and see how this plays out but the post covet you know money printing combined now with this incredible rise in interest rates is actually one of the fastest if not the

fastest single rise in interest rates ever in history or five percent or more uh so now you're coming up basically you're you have this higher plateau of prices perhaps in housing across the United States there's certain Pockets that have sold off um but now you have a higher plateau of prices combined with much higher interest rates right what in the seven and a half percent range on a 30-year mortgage uh you know coming from about a three percent uh mortgage you know back in early say 2022 yeah and so much

higher prices combined with much higher interest rates um just a double whammy effect in the in the U.S housing market and so so much of this is of course due to Cove of it in the aftermath of covet in the in the money printing right that we saw that was you know extreme by any measurement uh that you can possibly come up with currency printing my bad I make the contention and people think I'm crazy I I 100 agree with you when I was writing my first book that's when I realized wow part of the the the key functions of

money and Aristotle was the first to describe it uh medium of exchange a unit of account and a store of value if it can't serve those functions it is not money and I decided uh to make the distinction between these uh with my and it's the first episode of hidden secrets absolutely and I've been just uh standing fast on this principle and a lot of people think that I'm crazy and because I think you're exactly right it's it's cumbersome to try and uh to try and always uh

use the right words to but you know Confucius said that um using the correct language is the first step toward uh knowledge but something like that right uh you know truth and understanding uh depends on how well we can communicate and understand each other and if we use the wrong words and money is definitely the wrong word for National Fiat currencies that must lose value over time based on their very design if if you don't keep expanding the currency Supply forever the interest owed on it

eats it up you go into this inflation deflationary implosion uh and uh you you always have to expand the currency Supply and the way that works is with new loans and for the first time in a since the Great Depression M2 is Contracting right now that's right that's right pretty scary uh yet the bubbles continue it's uh it's it's amazing it's amazing so absolutely I'm 100 on board with you it's currency not money that that we're now dealing with and so there is no

store of value and what we're um and what we use as a a uh uh medium of exchange and so um as that currency expands right uh in Supply over time of course then prices you know reflect that expansion of the currency um I think we're seeing that in Spades in the housing market and combined with the unaffordability you know what the average I think the average uh per capita income is about fifty six thousand dollars that the the state the same house prior to covid in 2019 was about 260 000. today that same home is

about 440 000 Nationwide and so that's an astronomical increase uh and combined with now a seven and a half percent third year mortgage this is uh this is a brand new world that you know it's becoming just just totally unaffordable for people yeah I see it as a recipe for disaster for the vast majority of the population you know when you measure things in value not price you try and price them with something else how many shares of Dow is a single family median price home worth sure how

many share how many barrels of oil and how many ounces of gold is that and when you look at it that way uh you can see that like a home has become very very expensive lately gold hasn't really moved much and oil hasn't moved that much but real estate has moved like you said from before covet to after covet uh 70 increase on average which is just nothing like that's ever taken place in U.S history ever and so you're exactly right when measured in in real things that's a totally different measurement

yeah and everything reverts to the mean and when it reverts to the mean it usually overshoots to the opposite extreme so I'm gonna hey so we are over the 50 Mark right now yeah exactly that is an enormous percentage of the average person's income where you know back wow so just in 2020 it was down uh at about what 24 or 25 of the average person's income that's one of the lowest points in the past what um what 45 plus years right yeah right right so it was very affordable now it's

shot to the opposite extreme uh you know the rule of thumb used to be that about a third of your income is what you can right if you're going to try to finance a home and uh and here we are at over half it really you know real estate needs to come down by a long ways so this was great uh I want to try and make a short video this time so this was one topic and we'll get together soon I thank you very much for uh presenting this material so everybody can look for Carl E Krueger on LinkedIn

and you can read uh his comments here so I want to thank you Carl for joining me and uh presenting this information great thank you Mike this is this was excellent uh been a fan of yours for years as you know and so I look forward to uh to being a contributor and and helping out the uh the mission gold silver any way I can okay we'll see you next time thanks so much