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 hi I just wanted to tell you about gold Silver's 111 ounce silver giveaway where you can win win one one one one one ounce silver bar one 10 ounce silver bar and one 100 ounce silver bar so enter today and win hi everyone in the last video I had Carl Krueger with me and he shared some data on real estate and the ex the how extreme the bubble is how you doing Carl good good Mike how are you good so you sent me another chart uh recently and I just want to show this to everybody this is you know I believe I covered

this in my first book uh you know so I've been following this since 2005 I think and this is the mortgage rent ratio so how much does it cost for you to make payments on a home uh versus renting that exact same home or if you're making payments on the home and you're renting it to somebody else uh how much can you get in income and what you see is with the well you tell me what what uh uh you were really attracted to in here first well I mean first of all what just stands out about this chart is you know I love charts you

love charts Mike I know and so this this just stands out it just jumps out actually is that the extreme nature of the cost of owning a home now right and this is post covet and you can see from the chart of course where did this begin uh you actually had um uh owner basically the cost of ownership below the cost of renting uh prior to covet and right so the average cash the average house will cash flow then you could buy a house as an investment and rent it out and at cash flows exactly right and so then the cost just to you

know skyrocketed of course with the um basically in my personal opinion anyway with you know the uh printing of money essentially right during covid with all the covered related program and so the cost of the average home I think that the number is something like about 260 000 for the average median price home uh prior to Coven in 2019 that same home today this is just unbelievable is now 440 000 okay so if I if I remember it's about a seventy percent uh increase in the price of a home to my knowledge

that's never happened in the entire history of the country and so there's something very different now as as we well know than than was prior to covet yes you know I'm going to zoom in on this uh a little bit more because I want everybody to see this uh we're you know this starts out in 1970 and I'm sorry if I'm taking my eyes off the camera for everybody but uh like when I'm uh doing an interview like I had Rick rule on a few uh weeks ago and I kept on looking away well I was looking at Rick while he

was talking uh anyway um so what we've got here is a portion where the price of homes uh along with the uh interest rates the cost of the mortgage uh so it's your payments per month was below the cost that you could rent it for uh good uh uh time to possibly accumulate real estate for rental purposes and then you see where the spread between this now I'm used to seeing this as a single line This is the raw data you have the rents and you have the price at the the monthly price of the mortgage and when

you divide those two you get the mortgage rent ratio and that's what I always use to follow so it's a single line and when you do that you can see that there's this Natural Balance and it'll go above and below that Natural Balance pointing out when you're in a bubble or when Real Estate is uh undervalued and this lines up very well with like the um let me see the uh gold real estate ratio uh when when the price of a home is way over the rents it also tends to be when homes are overvalued

measured in gold or oil or shares of the Dow whenever you do a ratio chart they tend to run in waves where it points out bubbles and undervaluations at about the same time it's very interesting but you can see uh the home at about 400 little over 400 dollars here at the same time that it's over 800 the the payments are eight hundred dollars and you can rent it for four hundred dollars exactly obviously 82 uh so this is the point in time where uh mortgages where uh above between fifteen and twenty

percent for a 30-year mortgage yeah somewhere yeah that's right day in in 1980 or 82 where the FED funds rate was I believe 22 or 20 it's in my yeah in that in that range for sure then you get to a point in the 90s the 92 recession this right here in nineteen it started actually in 89 in the east coast and uh then the gulf the first Gulf War just uh really caused real estate to do this big pullback and Alan Greenspan lowered the rates making homes affordable again and you can see it was a confirmative

balance so this would be if you were doing a ratio chart this would be like your zero line where things are inbound months wherever it's here here and here and then a huge bubble again in 2006 obviously everybody remembers 2006 and seven and then what happened and the time to be buying real estate if you were going to rent it was in in 2010 and 11. that was right uh the pickup real estate and now you see the biggest spread between these although because this is all a linear uh chart and it's not percentages uh this spread

is not uh this spread here 400 to 875 is greater than 100 percent this spread here 1600 to uh 27 27 yeah yeah is not 100 so it's actually if this was a single line this would be a little bit smaller than that one in the 80s no that's true it's so extreme it's uh it is totally insane and that's a technical term though Mike it totally insane because obviously the um the backdrop of the macro environment right the the again I come back to the postcode you know the the postcode programs

um relief programs right have just pumped so much currency into the economy and it has to find a home and it Finds Its home in all the nooks and crannies um housing is definitely one of those big nooks and crannies that it's found its way into uh and you can see I mean this is just you know to a pardon the pun but it's off the charts almost right yeah so yeah absolutely all of that currency that they printed though runs out one day all of these gifts that they made to everybody during and it was just

it was theft uh you know they were when you create currency you're stealing from anybody who is holding currency because you didn't create new purchasing power you didn't create new goods and services that's right created this the measurement tool you you diluted the the pool of those measurement tools and it's just like making taking a ruler and making it six inches instead of 12 inches and you for a foot and you say wow the ceiling was raised by double my ceilings are twice as high now

so it was stolen from the old method of measurement and transferred therefore it's stolen from any stolen purchasing power to make a gift to all of the people they were helping stimulation and this is what the Federal Reserve is unbelievable that the people that are running the game the the you know basically the bank in Monopoly or the house in Las Vegas the people running the game here the Federal Reserve the world's central banks those people don't understand fundamental economics well if

they don't understand exactly yeah and they don't belong in their job if they do understand it then they're criminals and they belong in jail I think I think they understand it very well honestly and it's you know as you well know is that you know what they're doing is they're borrowing from the future or by diluting each dollar that that's already in circulation right and so as we all know it's a hidden it's a hidden tax and inflation is is an expansion of the currency Supply it's a

hidden tax on the population it's far more palatable than passing an actual um increase in the income tax right and so the primary beneficiary of that expansion of the currency is always the government first and so the government I always make this point is that the government doesn't pay inflation the government does not pay the rate of inflation they simply inflate more to account what they've already inflated previously and so you know they don't they don't have that limitation

um you know on the ability to um expand the currency Supply and so if inflation's up three percent or five percent or ten percent or whatever then they can simply account for that by the next round of either Taxation and or inflation which is another form of Taxation okay with that I want to end this video and uh thank you very much for uh doing this great good good seeing you again Mike hi I just wanted to tell you about gold Silver's 111 ounce silver giveaway where you can win win win one

one one one one ounce silver bar one 10 ounce silver bar and one 100 ounce silver bar so enter today and win