2021 has just gone vertical and that shows to me that we're in the late stages of a real estate bubble and you know i was talking about that economic saying the cure for high prices is high prices eventually it brings around low prices because more supply comes on to the market because there's more profit to be made well there's another cure for high prices less currency in circulation these high prices are brought about a lot of it is just the amount of currency that is now in people's hands


hi everyone i'm mike maloney and i'm joined with adam taggart once again adam how are you doing i'm doing great mike uh still filling in for jeff clark while he's busy writing um but let's start because we have a lot to get through today but we're going to start with a recent piece by jeff titled while we wait on silver and gold do this i think there were two important points that piece you wanted to get across right yeah well the first uh point is that people tend to buy at the wrong time you


know if a store runs an ad on the sale they say uh get this now well it's 20 off or 10 off you know and people rush in and they buy when stuff is on sale at a store but when it comes to investments uh nobody advertises that it's being sold at a discount and what we see as a dealer you know we're very sensitive to this because we see the price fall and everybody stops buying and then the price starts rising when especially when it's setting new highs that's when everybody starts buying and so it's


really uh sort of backwards and you and i were just talking about dollar cost averaging before we started this video so um explain that to people sure well basically it's just what it sounds like you're just buying on a consistent purchasing schedule and the data shows pretty convincingly that if you dollar cost average into any asset you generally get a better average price over time by doing that but a huge reason why you do it is exactly what you're talking about is it counters our


emotional uh predilection just as as humans to not want to buy while the price is going down because it feels bad um but you know again the old adage is you want to buy low and sell high but a lot of people conversely because they're driven by emotions tend to buy while the price is rising so they tend to buy high and then sell low so dollar cost averaging takes it out of the equation and just makes it a progression that you just follow no matter what yeah and our producer dan uh was saying


just before we started this that uh when he gets paid he pays himself first he gets a paycheck but then he takes some of that and pays himself gold and silver so his schedule for buying is whenever he gets paid that's that's uh and i i love that idea of paying yourself first because uh when you buy money and when you trade currency in for money the money is going to maintain value over long periods of time the other point in this article is uh how well am i prepared for persistent inflation and you know jerome powell was


saying it would be transitory and when he and then but he didn't say it very well then he clarified it and basically even when he clarified he didn't clarify it very well what he said when he clarified it is that prices aren't going to go down they just they they're going to take this big leap and stay up there and then they're not going to rise quite as fast as uh you know what we're seeing right now but who knows if that is true or not it all depends you know if we see


a market break or something like that if the stock markets start falling they're gonna print like crazy and they're going to do direct stimulus and uh and the government doing a bunch of infrastructure spending and deficit spending to create jobs and so on and that is all creating currency that gets out into circulation and causes the retail prices to go up uh got any comments on that yeah well just that you know obviously we're already seeing that and anybody who buys food or fuel or you


know has to pay housing expenses or medical bills i mean they're already seeing this right and uh jeff mentioned in his article there an interview that i did very recently with steve henke who's a professor of economics at johns hopkins and he predicts that we're going to see regular government reported cpi inflation numbers of around 9 by the end of this year so this isn't something that's just academic that you and i are just you know starting off here mike this is something that is is already in


the real world and accelerating month after month here and that means that some time or another this trend of lower and lower interest rates the dis inflate that's what disinflation is is is less inflation each year is disinflation uh we're going to see that reverse some time or another and we're going to have uh interest rates going higher and higher but they are probably you know as long as the federal reserve and the world's central banks think that they have to manipulate the


economy all of the time that it can't get along without their brilliant minds uh that you know that people aren't good at making their own choices and stuff and they have to steer the economy as long as they do that they're going to try to keep uh the interest rates low to stimulate the economy which means they're going to be negative they're going to be below the real rate of inflation which means you better have uh your your well for me i'm going to have all of my investments in things


that are going to stay ahead of inflation if i can right like precious metals which you just were talking about real interest rates there the more negative real interest rates are uh the more tailwind is behind gold and silver that's sort of the primary thing that that drives them so talking about you know we've talked in previous videos mike about the unintended consequences that government thinks they're so brilliant they you know force some unilateral solution on the system and then of course all sorts


of things happen that they don't want to have happen like this runaway inflation now let's get to today's tweet of the day it's really two charts provided here by rob warnock this is a classic real world example right now of how quickly things are getting out of control these charts basically show what have happened to rents in the u.s over the past year i know you feel pretty passionate about this mike so what's your takeaway well you know we're seeing it's it's


rents are up 14 since january so forget that nine percent number that steve hanke was saying well maybe nine percent will be sort of consistent when you average it out but i have a feeling it could be a lot higher but this is huge uh 14 since january uh is that's like crazy you know you annualize that and you'll come out over 20 percent per year of uh rent increases so that's the first chart and it's interesting it shows uh you know since the pandemic was declared but you see it going going up seasonally


and you know it starts sometime just after the beginning of the year it would rise well this year it went up 14 since january it's it's just absolutely crazy it's a moonshot it's a moon shot and then in the next chart uh you see median rent price in the united states and you see the national vacancy index and the median rent price and there's this old saying in economics you know for at least for the austrian side of economics the people that understand economics the cure for high prices is high prices


when prices go high more supply will come onto the market now real estate there's a big lag there because you've got to build houses for more supply to come on to the market but you can see how the higher prices have reduced the amount of vacancy and then there's a couple of other charts i want to skip the next chart in this tweet thread and go to the annual change in the case shiller national home price index and you look at uh you know 2016 17 18 19 and then 2020 the last half of it was crazy and


2021 has just gone vertical and that shows to me that we're in the late stages of a real estate bubble and you know i was talking about that economic saying the cure for high prices is high prices eventually it brings around low prices because more supply comes on to the market because there's more profit to be made well there's another cure for high prices less currency in circulation these high prices are brought about a lot of it is just the amount of currency that is now in people's hands uh you


know we've seen in the past we've done some videos that showed uh the national savings rate uh the uh explosion in uh in m2 mzm uh just all of these various aggregates you know there's a lot of people that are just barely getting by and they get stimulus checks but they're sending me stimulus checks what do you think i do with that i just put it in the bank it sits you know it'll end up in an investment somewhere and it'll help drive asset prices higher because they are printing currency and


then the even the chart after that uh which is um the uh search volume uh for apartments for rent uh it just shows you that since february of this year uh that search vol the google search volume has just exploded uh people are looking uh for apartments and they have to search and search and search because now the prices are running away from them absolutely mike and i think the situation only gets worse uh when you look not just at rents but at housing prices and i want to get to today's chart of


the day but real quick just a reminder folks please like this video and subscribe to this channel all right mike yeah so um over here is an article on xero hedge that focuses again not on the price of rents going up but on the price of housing and as you'll see we have a similar moonshot here so what's your interpretation of this well a lot of the factor that drives rent prices is the cost of a house there's a whole lot of people that are real estate investors and what they're looking for is a home that cash flows or


at least one that comes close to breaking even which is not a good thing to do if somebody's buying a house and they can't get a as as the if the rent is not paying the entire mortgage uh plus uh the the uh you know the maintenance and insurance and so on on the house if the house is costing you more especially if you're buying at the peak of a bubble then that's not a good idea but most you know i was with robert kiyosaki for many years and he was the real estate guru of gurus during the peak of the 2006 7


real estate bubble and i would travel the world speaking with him and so looking for a cash flow investment is what people are doing well the higher the home price the higher the rent has to be to cash flow this is it's a very direct correlation here so to see um the uh let me see it says case-shiller industries the uh america's 20 largest cities have exploded 19.08 percent year over year and then it's got uh some of the city's phoenix being up 30 percent and san diego seattle san francisco


tampa dallas miami all posting 20 price increases so steve henke was talking about nine percent this is enormous and it directly uh affects people uh but uh you can see that this is all going to come back and and it's increasing at the highest rate ever this is the fastest pace of uh home price inflation on record back uh you know going back as far as you can go back and and measure this uh so uh it's a direct correlation and we're going to as um as more and more of our income gets used


up on housing there's less available for everything else then you need a raise the raise when everybody's going and asking for a raise it causes the retail price of goods and services to go up because all the manufacturers of everything have to raise their prices to keep up so this is a vicious circle all caused by the world's central banks uh thinking they're smarter than the free market and the government uh trying their best to come up with solutions that will get politicians elected nobody


wants to do anything that sounds hard or sounds like we're going to you know that it'll cause some short-term pain for a long-term benefit these are all everything they do is the easy way out goes back to the demotivational poster that we shared a few videos ago you know government if you hate the um if you hate the problems we create just wait until you get a load of our solutions so so mike um you're you're putting your finger on i think a really critical question which is um you know look


how how long can these sort of parasitic policies that the government is pursuing against the average citizen in their checkbook um how long can those continue before the host just basically begins to roll over here um and we've got a meme of the day and a quote of the day that go really well together in addressing this point i want to get to that in one second just a reminder for folks if you haven't yet downloaded mike's excellent free book on investing in gold and silver go to goldsilver.com


free book and if you want to watch the interviews that i've been posting on over on wealthy on including some very recent ones that are very gold friendly just go to youtube.com wealthyon so mike let's head over to the meme of the day here which is a picture of a politician throwing a lot of money around can you tell us why this is so salient to what you've just been talking about here well the man's saying look he's so generous uh and so this is a politician and they throw money around


currency yeah i'm going to get honked [Laughter] he's throwing currency around uh because that's what gets uh him elected and he you know all politicians get elected by all of this rhetoric saying elect i've got a good idea we'll fix it by this we'll fix it by that that you know i really liked gerald ford because he didn't do anything very few politicians i mean i looked back i liked kennedy but i was like four or five years old uh back then and i look back at it now he was actually


quite a socialist but most politicians i just don't like them but milton the great milton friedman once said there are four ways that you can spend he called it money there are four ways that you can spend currency one you can spend your own currency on yourself two you can spend your currency on someone else three you can spend someone else's currency on yourself four you can spend someone else's currency on someone else and what's interesting is you get more and more generous as you go up this


tree and so here's this politician uh just throwing money currency away i get two honks in this video [Laughter] it's not me this time huh glad it's not me this time look he's so generous but his wife says he has your wallet and it's so true which brings us to the final a quote of the day how long do politicians have to keep on promising heaven and delivering hell before people catch on and stop getting swept away by their rhetoric don't believe anything that they say and


when they promise you something for free it's not for free you got to think about how's that going to be paid for i want to thank everybody for watching thank you adam it was great my pleasure mike