Jason Hartman

But when the delta is, you know, from 4.5% to 7%, They're just not willing to deal.

But when the delta is, you know, from 4.5% to 7%, They're just not willing to deal.

Right.

Right.

Yeah, no. Buyers can't afford it. The affordability is strong.

Yeah, no. Buyers can't afford it. The affordability is strong.

Right. Absolutely. OK, so so here's what happened. Just so I can tell you, this is not a theory. It's a fact because it happened historically and it keeps happening every day. So in 1972, a typical house was eighteen thousand dollars. In 1972, if you bought that house, you would typically put 20% down and you'd get a mortgage that was 7.3%. Okay. That was the rate.

Right. Absolutely. OK, so so here's what happened. Just so I can tell you, this is not a theory. It's a fact because it happened historically and it keeps happening every day. So in 1972, a typical house was eighteen thousand dollars. In 1972, if you bought that house, you would typically put 20% down and you'd get a mortgage that was 7.3%. Okay. That was the rate.

That's a year after Nixon took us off the gold standard. Okay. So then if you got a 30-year mortgage, basically you would have paid $101 a month for three decades. But just fast forward 12 years, and let's go to—it's a famous year, and that's why I'll use it. George Orwell wrote this great book called 1984, okay? Which everyone needs to read because it's come true, okay? Sadly.

That's a year after Nixon took us off the gold standard. Okay. So then if you got a 30-year mortgage, basically you would have paid $101 a month for three decades. But just fast forward 12 years, and let's go to—it's a famous year, and that's why I'll use it. George Orwell wrote this great book called 1984, okay? Which everyone needs to read because it's come true, okay? Sadly.

Government surveillance, etc. So in 1984, that 1972 dollar is now only worth 40 cents. Mm-hmm. Because of inflation. Because of inflation, right? There was a lot of inflation in the 70s. And every month for that 12-year period, that homeowner kept writing a check for $101 every single month. But guess what? That $101 felt really burdensome in 1972, but by 1984, it only felt like $40. Right.

Government surveillance, etc. So in 1984, that 1972 dollar is now only worth 40 cents. Mm-hmm. Because of inflation. Because of inflation, right? There was a lot of inflation in the 70s. And every month for that 12-year period, that homeowner kept writing a check for $101 every single month. But guess what? That $101 felt really burdensome in 1972, but by 1984, it only felt like $40. Right.

Right. Their income went up.

Right. Their income went up.

And the value of the dollar declined. And when the dollar's value declines, the value of the debt that's denominated in dollars also declines. Mm-hmm. Debt is my favorite four-dollar word.

And the value of the dollar declined. And when the dollar's value declines, the value of the debt that's denominated in dollars also declines. Mm-hmm. Debt is my favorite four-dollar word.

Absolutely. That's exactly what happens. That is inflation-induced debt destruction.

Absolutely. That's exactly what happens. That is inflation-induced debt destruction.

Literally, there is a wealth, you know, we hear the word a lot lately, this phrase wealth transfer, okay, which means the wealth is being transferred from, you know, the little people to the global elites, right? And that's certainly true, sadly. But there's also this wealth transfer going on all the time, transferring wealth from lenders to borrowers.

Literally, there is a wealth, you know, we hear the word a lot lately, this phrase wealth transfer, okay, which means the wealth is being transferred from, you know, the little people to the global elites, right? And that's certainly true, sadly. But there's also this wealth transfer going on all the time, transferring wealth from lenders to borrowers.