Jason Hartman

Dollars only worth 40 cents. The $101 a month mortgage payment is now only 40 bucks. Great. What happened by the end of that? 30 years after 1972, when the person made the last payment on that mortgage, that payment was now, the dollar was worth 24 cents.

Dollars only worth 40 cents. The $101 a month mortgage payment is now only 40 bucks. Great. What happened by the end of that? 30 years after 1972, when the person made the last payment on that mortgage, that payment was now, the dollar was worth 24 cents.

Yeah. Well, maybe not ouch if you have debt.

Yeah. Well, maybe not ouch if you have debt.

Yeah. Ouch to the lender. Yeah. Yeah. Not to the borrower.

Yeah. Ouch to the lender. Yeah. Yeah. Not to the borrower.

And so now that $101 a month mortgage is only $24. Yeah. So what happened there? Like, if we really do the math on this, here's what happened. They got their loan, their mortgage, it's 7.3%, okay? They thought they were paying 7.3% and probably had several conversations over the years. Can you hear it now?

And so now that $101 a month mortgage is only $24. Yeah. So what happened there? Like, if we really do the math on this, here's what happened. They got their loan, their mortgage, it's 7.3%, okay? They thought they were paying 7.3% and probably had several conversations over the years. Can you hear it now?

The husband and the wife are saying, well, you know, hey, honey, do you think we should pay off this mortgage? Because we're paying 7.3%. Like, why should we be paying all this interest to the bank? The bank is getting rich. No, you're getting rich because the inflation is making your debt cheaper. So hopefully they didn't pay the mortgage off. Okay.

The husband and the wife are saying, well, you know, hey, honey, do you think we should pay off this mortgage? Because we're paying 7.3%. Like, why should we be paying all this interest to the bank? The bank is getting rich. No, you're getting rich because the inflation is making your debt cheaper. So hopefully they didn't pay the mortgage off. Okay.

But then, if you analyze it, after inflation debased the value of the loan balance and the monthly payment on the loan, both of them, right? They really were only paying 1.06%.

But then, if you analyze it, after inflation debased the value of the loan balance and the monthly payment on the loan, both of them, right? They really were only paying 1.06%.

Yes.

Yes.

That's all they paid in interest. Yes. That was their true interest rate.

That's all they paid in interest. Yes. That was their true interest rate.

Nope. Not the value, just the mortgage being debased by inflation. Inflation. That's it. Right? Assume the value just kept up with inflation. And by the way, you know, if you think real estate appreciation is going to make you rich, that's not as true as most people think.

Nope. Not the value, just the mortgage being debased by inflation. Inflation. That's it. Right? Assume the value just kept up with inflation. And by the way, you know, if you think real estate appreciation is going to make you rich, that's not as true as most people think.

Because historically, real estate only outperforms the consumer price index, the major, you know, determinant of inflation, which is bullshit, by the way. I call it, you know, it's the CPI. It's a made-up number. Yeah, I call it the CP lie, okay? Right. And we can talk about how the government manipulates that if you want.

Because historically, real estate only outperforms the consumer price index, the major, you know, determinant of inflation, which is bullshit, by the way. I call it, you know, it's the CPI. It's a made-up number. Yeah, I call it the CP lie, okay? Right. And we can talk about how the government manipulates that if you want.