Jason Hartman discusses with Viktor Jiracek possible solutions to our monetary crisis, how to succeed with real estate’s hidden wealth creator – inflation induced debt destruction, his Ultimate Investing Equation strategy and shares his insight into the question on everyone’s mind: is the real estate market in a bubble? Learn more to win the real estate game!

0:00 Introduction
1:28 Jason Hartman is an economist, an investor, has been doing this 18 plus years and has a great podcast called The Creating Wealth Show
3:10 The elite class is oppressing us peasants and they’re really taking advantage of people, it’s very sad
3:56 Is there a bubble? When will it pop? What’s going to happen when it pops?
7:53 How do we position ourselves and how do we win this game because it’s almost guaranteed that the government will continue to print more dollars and spend more dollars
10:46 Housing is such a great asset class because its supply is extremely limited
13:30 The government every day, keeps making more promises that it can’t keep mathematically and today, those promises are about $220 trillion
14:35 I’ve identified six ways the government could potentially get out of the mess
16:52 When we talk about inflation versus deflation, we’re really talking about a war between two things: really bad fiscal and monetary policy
18:52 We need to understand that inflation is a hidden tax that steals our money and destroys our purchasing power
21:57 In 1971, Richard Nixon took us off the final attachment to the gold standard; it was almost exactly 50 years ago
25:57 That’s what people consider the hedge against inflation, but they don’t consider the inflation induced debt destruction: that’s the hidden wealth creator
26:52 The Hartman Comparison Index compares the price of housing to a whole bunch of other commodities.
29:07 So I have another strategy I teach called The Ultimate Investing Equation
34:08 Why do you think all of these big institutional investors are just crazy about buying more houses right now?
34:31 So the final question, is the housing market in a bubble?

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Win With Real Estate’s Hidden Wealth Creator – Inflation Induced Debt Destruction!

Real estate has long been heralded as a lucrative investment avenue, providing individuals with an opportunity to build wealth over time. However, there is a hidden wealth creator within the realm of real estate that is often overlooked – inflation induced debt destruction.

Inflation induced debt destruction can be best understood by analyzing its two primary components – inflation and debt. Inflation, in simple terms, refers to the general increase in prices of goods and services over time. Debt, on the other hand, is the amount of money borrowed by an individual or entity with the expectation of repayment.

The concept of inflation induced debt destruction comes into play when we consider the impact of inflation on debt. Over time, as inflation increases, the value of the currency decreases. This means that the purchasing power of the individual’s income also diminishes. However, this decrease in the value of money has a positive impact on debt.

Let’s consider a practical example. Suppose an individual takes out a mortgage for $200,000 to purchase a property. The mortgage carries an annual interest rate of 4% and has a term of 30 years. Inflation is running at an average of 2% per year.

Initially, the individual owes $200,000 on the mortgage. However, as time goes on, inflation eats away at the value of the currency. This means that the purchasing power of the individual’s income increases, making it easier for them to pay off their debt. Additionally, the income derived from the property may also increase due to inflation, leading to higher rental income or property value.

The real magic happens when we consider the effects of inflation on the interest payments. As the value of money decreases, the real cost of interest decreases as well. This means that the individual is effectively paying off their debt with “cheaper” dollars. In other words, the debt is being eroded by inflation.

By the time the 30-year term is up, the individual could end up paying off a significantly smaller amount of real value than the initial $200,000 borrowed. This is the essence of inflation induced debt destruction – the debt becomes easier to pay off over time due to the decrease in the value of money.

Real estate investors can exploit this phenomenon to their advantage by utilizing leverage. By taking on debt to finance real estate purchases, investors can benefit from inflation as it erodes the real value of their debt. This allows them to accelerate wealth creation and potentially achieve higher returns on their investments.

However, it is important to note that inflation induced debt destruction is not without its risks. Inflation can be unpredictable, and if it spirals out of control, it could lead to negative consequences for the economy and real estate market as a whole. Additionally, the success of this strategy relies heavily on maintaining a steady income and being able to service the debt.

In conclusion, inflation induced debt destruction is a hidden wealth creator within the realm of real estate investment. By understanding and leveraging the impact of inflation on debt, individuals can accelerate wealth creation and potentially achieve higher returns on their investments. However, it is crucial to approach this strategy with caution and be aware of the risks involved.