The Housing Market Just Changed Forever (What You Need To Know)
Summary
US Housing: Extensive critique of proposed 50-year mortgages, arguing they would push home prices higher, slow equity buildup, and increase systemic risk for buyers.
Stimulus Checks: Strongly bearish on renewed stimulus or a tariff-funded “dividend,” warning it would stoke inflation and reduce purchasing power after the short-term boost fades.
US Treasuries: Concerns about deficits and potential need for 50-year Treasuries to match mortgage duration, highlighting risks to financial plumbing and duration mismatches.
Tariffs: Argues tariffs are effectively a tax on US importers rather than foreigners, do not reduce import prices, and would still increase Treasury issuance if proceeds are spent.
Key Companies: Frequent references to Fannie Mae (FNMA) and Freddie Mac (FMCC) as ultimate holders/packagers of long-dated mortgages, with taxpayers bearing losses if they fail.
AI: Notes data center buildout tied to an AI bubble and warns of malinvestment and potential job displacement pressures.
Inflation Outlook: Expects a disinflationary recession followed by higher inflation akin to the 1940s if policies move toward UBI and renewed stimmies.
Distributional Effects: Highlights a K-shaped economy where asset owners benefit from rising home prices while young and asset-light households face worsening affordability and risk.
Transcript
Hello fellow robo capitals. Hope you're well. So we got big news in the housing market and we have big news in the form of stmmies. I've got a twofer for you today as far as government stupidity. That is right. So first and foremost, Trump comes out or the administration over the weekend and says, you know what would be fantastic for the housing market? It would be a 50year mortgage. Because right now we have a 30-year mortgage, and everyone likes that one. And a 40-year mortgage. Well, that's kind of the same. So, let's just do a 50-year mortgage. In fact, let's just do a hundredyear mortgage. Or maybe we can do a,000-year mortgage. And then your down payment or what your down payment would probably be the same, but then your monthly payment would be like a dollar a month. Think about how awesome that would be for the economy. And think about how affordable housing would be then. >> [laughter] >> I mean, this is just the stupidity of this is staggering. Is staggering. And I haven't even gotten to the STEMI checks. He wants to do STEMI checks again. So, let's get into it. If you saw the thumbnail there, housing prices are too low. Yeah. I mean, is he saying housing prices are too low? No, not literally. But that's what he's implying here. Because if you do a 50year mortgage, then what's going to happen to housing prices? They're just going to go up. And then housing prices go up and then the down payment or excuse me, the monthly payment stays the same. And you're just making consumers worse off because then the monthly payments are the same, but then they literally build zero equity for like 25 years or I'm exaggerating. But this is this is like the motherload of bad ideas in the housing market. And you know what's really gets under my skin is if Biden would have done this, the MAGA crowd would have completely lost their minds. Like the government's getting involved. This is too much government. This is going to increase housing prices. It's going to be bad, bad, bad, bad, bad. But I assure you that probably 90% of the mega crowd think this is a great idea. Oh yeah, 50-year mortgages. Yes, awesome. Let's just do that. [sighs] And by the way, if you think that a and this is probably going to be a fixed rate, which no bank in their right mind would ever ever ever ever issue. So what's gonna happen here? We're likely and and you know once the camel's nose is underneath the tent it might not happen right away but the more the only check and balance we had were the Republicans as far as keeping the Democrats from going full socialist. But now the Republicans want socialism or bigger government bigger government socialism just as bad as the Democrats do. They just market it in a slightly different way. So, I think any like freebie the government is thinking about or texting about or tweeting about, I I think it's a very high probability that we have it within the next 3 years. Like, I would be shocked if we didn't have UBI in the next three years. I would be absolutely shocked. And we're going to get into the whole STEMI check thing here in a moment, but let's remember that a 30-year fixed rate loan is not a market that that's not a free market thing. Like the market wouldn't produce that because there's just way too much inflation risk over 30 years. So banks would never do that. The reason we have this in the United States is because banks go ahead and they act like a mortgage broker really like they're just the loan originator and then before the ink is dry they just pawn that off on Fanny and Freddy and then if Fanny and Freddy goes bust then who picks up the tab? That would be you. That would be you, the taxpayer. So when this inevitably blows up like it will, then you guys are on the hook and this is being done in the name of the consumer, the average Joe, because we've got to make housing more affordable. Well, a you're not going to make housing more affordable. You're just going to make it a lot worse, and you're going to increase housing prices. Remember, I did a video on this probably three months ago because Trump and the administration was talking about lowering or making housing more affordable. Housing more affordable, housing more affordable. And I said, they're actually between a rock and a hard place here because by saying you want to make housing more affordable, you are also saying that you want housing prices to come down. But if housing prices come down, then that impacts a good majority of your voters who are old people who own houses. And the old people that own houses, they don't want housing prices to come down. They want them to go up. So, how can you make housing prices go up while at the same time giving the illusion of making it more affordable? This is it. This is it. And obviously, the banks won't do this. So, you have to just get more government. That's what the endgame is here. Just more government, bigger government, and then we're just going to socialize losses. I mean, this is such a bad idea. And then think about this. So, the home prices are going to adjust upwards, right? And therefore, you're going to have the people who own assets, they're going to have more purchasing power. the people that don't have assets, they're not going to have any more purchasing power because things just adjust. And then what's going to happen? Prices are going to go up. So you have you're just turbocharging the K-shaped economy, which if we do have a recession, home prices come down, you take the K-shaped economy and it turns into a little Hshaped economy. I mean, I don't know if I could think of a worse idea. If you put me in charge of the housing market and you said, "George, what's the worst idea you could possibly think of?" I would probably say a 50-year mortgage. Well, I'd probably say a 100red-year mortgage, but I I would say a longer maturity or longer duration on the mortgage. That would be the worst idea I could think of if my objective was to actually improve the standard of living for the average American. Now, if my objective was just to benefit old rich people, then yeah, that's that that that would not be a bad idea. That would be a good idea. But just think about the homelessness rate that we've seen just since 2020. And you have to attribute a portion of that to home prices being skyhigh. And this now of course there are other dynamics here. If we have the real if we have the u economy implode, if we have the unemployment rate go up, then that's going to bring housing prices down. Uh regardless if you have a 50-year mortgage or whatever, but we're just saying all else being equal. Okay? So all else being equal, if nothing else changes except that, then you're going to increase home prices and you're going to make things more unaffordable. So let let's just let me show you here real quick. Let me do a screen share. And then, you know, that's obviously not, believe it or not, that's not the worst idea they had over the weekend because we haven't even gotten to the STEMI checks yet, which we know how well that worked for the economy. I mean, think about how much inflation the stim checks created from 2020 to 2022. And that was during what would have been a massive deflationary bust. Okay. Well, now that we're not in a deflationary bust, just think what stim checks would do to inflation now or the price of stuff. And people say, "Oh yeah, give me the free money. Give me the free money." But as soon as the free money's over with, prices have adjusted higher, but their wages are still the same, and therefore their purchasing power decreases. But it's the exact same nonsense with housing, except for the few people up there that already own homes. I mean, for and for the young people, this just completely crushes them. Let me show you what I'm talking about here. Let's go over to a mortgage calculator. And so I just this is the default right here. $400,000 home, which if we get a 50-year mortgage that's going bye-bye. I mean, you you're not going to be able to buy it's going to be like Australia or like Canada where you can't even buy like a 700 square foot home that was built in the 1950s for 400 grand. But let's just use this as our our base here. So, the monthly payment would go is starting at $2,289. Okay. So, now let's go ahead and put in the 50-year term. Now, another thing I want you to notice is the total amount of interest paid. You see that total amount of interest paid is roughly $369. And then you can see this dotted line because I believe this is the what would this be here? That would probably be how much equity you have or this is probably the amount the the dark blue down here is probably the amount that's going to principal. Yeah. So let's see how this changes in the middle. This is how much is going to interest. So let's see how this changes. We got the 50-year in there. Now calculate. So your your monthly payment only goes down by $200. As Thomas Soul always says, there are no solutions. There are only tradeoffs. So, what's the tradeoff here? And again, this assumes that home prices won't go up or adjust higher to where your mortgage payment on that same house would still be the exact same, which it likely would. But what are the trade-offs here? So, you save $200 a month. Woohoo. Awesome. Fantastic. Now, look at how much equity you're building. the the the the amount that's going to principal here is $1,000 where I'm assuming these are annual payments here. So, the amount that's going to principal, $1,000 if you pay this for a year [laughter] and then and then $19,000 is going to interest. And then look at the total interest paid. It goes from 369 to 687. 687. And think about that. Now what happens if home prices like go down, heaven forbid, in nominal terms, because you're ba you basically have no more equity than your down payment. I'm sure Trump's going to come out with something that makes you uh that gives you a subsidy for the down payment. So, we're like, "Oh, no. Uh, you know, we can't have home prices go down. We have to have them continue to go up because we need to buy votes, but we also need to make home prices more affordable. [laughter] Again, there's going to be a cost. There's going to be a cost. There is no benefit without a cost. There are only tradeoffs, right? [snorts] So, let's just take the down payment to zero. Woohoo. or let's just take it to 10% or 5% or whatever it is. And then you're basically building zero equity every single year for the first I mean look at this. We go out to 2035. [laughter] I didn't even do this before we went live. This is so ridiculous. 2035. So 10 years from now, your your $24,000 a year in payments is only give is only going 1,800 of it is going to principal [laughter] in 10 years. In 10 years of making payments, you're still only going to have $1,800 a year go to building equity. And so then obviously the question becomes, what if home prices actually go downlightly 5%. I mean, you're totally wiped out. You're totally wiped out. You're just it it's jingle mail. remember what they called it back in the GFC where people just mailing in the keys like why why would you [laughter] like you're totally up you have a 5% move in the market and basically you're totally wiped out your equity's gone like you're done and yet you still are making payments out you still might want the roof over your head that's fine but especially for investors or if you have a second I mean this is just again think about the unintended consequ consequences here. I mean, part of the reason we had the GFC is because you had 30-year fixed rate. Well, I guess that would be more adjustable rate mortgages, but it was financial engineering. It was financial engineering. You no money down, liar loans, all these things. And and I'm defining financial engineering is something that is non-market, right? So, and the the the free market would never come up with a mortgage that was 0% down. That that's not that's not real. You need the government for that. Just like the free market would never have a 30-year fixed rate mortgage. The government has to be involved for that. And when I say the government, I'm talking about you, the taxpayer, are inevitably going to have to bail this out. I mean, the the burden is going to lie on your shoulders. So, here's the irony. Trump is coming out and saying, "We're going to do this to make housing more affordable," which is not going to make housing more affordable. It's just going to make it a thousand times more risky. And when you do see this thing blow up, then the people he is supposedly helping are the ones that are going to bear the brunt of the downside. That's what we're doing here. And it's all just to buy votes for the midterms or whatever the hell is coming up in the United States. I mean, it's again, if you had to say, George, if your priority is improving the standard of living for the poor and middle class, what's the worst thing that you could think of to do in the housing market? This is it. This is it. It's really it's it's you can see my frustration because, you know, I voted for Trump and I voted for Trump because I was all about free speech. I'm like, no matter how bad the problems get in the United States, as long as we have free speech, we can fix the problems. We can fix the problems. We're Americans. We're great entrepreneurs. As long as we have free speech, we can fix the problems. And so, fortunately, Trump hasn't been too bad on that. although he has tried to pull back the free speech thing with the burning of the flag and but we'll save that for a separate video. But I'm like, you know, I I voted for the guy and it's just frustrating that he's just getting worse and worse and worse and worse as if your definition of worse is expanding the role of government in the economy. And that is definitely outside of free speech. That is definitely my idea of worse. Now, you say, "Well, he's doing some good things here at the border." Great. Fantastic. I'll give him kudos over there. But 1% of what he's doing is maybe good or 10% or whatever it is, but the vast majority of this and it's just getting worse by the day. Like the pie chart when he started like 90% of what he was doing was good and 10% was bad. But it the pie chart just keeps evolving and it keeps getting it keeps going in the wrong direction. So now we're at about 75% bad and 25% good. And we're not even a year into it. It's like where are we going to be in 3 years? We're likely going to be at 99% bad and 1% good. And look, if you're whole team mega and all that, I mean, fantastic. Great. You're supporting the Trump the president, but you have to be principled about this at some point. You have to be principled. And if something is against your principles, if there's a policy that is against your principles, you have to stand up and say, "No, I don't agree with that. I I like Trump, but I I don't agree with what he's doing here." Whereas 50% of And it's not just maggots. It's on both sides. They're just tribal. So, whoever your guy is or whoever your girl or whoever your party is, whoever your whether you're team red or team blue, whatever your team says, you just completely abandon your principles and you say, "Yes, I support that." And then you just use mental gymnastics to try to rationalize as to why that's a good idea. No matter how bad the ideas are, you just use those mental gymnastics to try to rationalize. I mean, Trump could come out and say that he wants to lower the speed limit on the highways to 10 miles per hour, and I can assure you 50% of the MAGA crew would say, "Yeah, but yeah, I had never thought of that. Oh my gosh, that's brilliant. That's such a great idea. I mean, it's it's a matter of national security that if we lower the speed limit down to 10 miles per hour on the highway, we're going to use a lot less oil. And if we use less oil, then we can allocate that energy to AI. And then we can beat China at AI. And then we're less dependent on Saudi Arabia. Win, win, win. TRUMP. YES. 5D CHESS AGAIN. YEAH. [laughter] That's the world we're living in. Unbelievable. But unfortunately, we're not done. I mean, let's go back. I I had an article pulled up here, and we haven't even gotten to the STEMI checks. Geez. So, here you go. Right now, there is no 50-year Treasury. Great point. Great point. because this is something that I look [sighs and gasps] not that Trump has thought this through at all, but this is something that he can't even comprehend because he doesn't have anyone around him other than Bent, but Bent is such a yes man that that he's who knows what's happening behind the scenes. But here's a big problem with the 50-year mortgage is that when you have a 50-year mortgage, that's going to be pawned off on somebody. I mean, I don't know who. And yes, it's going to go to Fanny and Freddy, but then what are Fanny and Freddy going to do with it? They're going to turn it into a mortgage back sausage and they're going to pawn it off on Wall Street. And Wall Street is going to sit there and sell it to probably your pension fund that's going to somehow convince them that it's a great idea to buy a 50-year mortgage. Or you might even have some stupid idiotic banks that buy them. But if the banks buy them or if there's some sort of lending on a financial instit institution's balance sheet, well, let's just say it's to buy uh a mortgage back sausage that has 50 years of duration or whatever. I I don't know, you know, the financial plumbing there and how they operate the balance sheets in the network that is the monetary system gets pretty complex. But what I can tell you is that if they're issuing and it's not just banks, I understand they're not going to keep these on their balance sheet, but it's going to end up on someone's balance sheet, right? And if they've got and if someone's borrowing, then that's the asset, if you want to call it that. And then the offsetting uh liability would be a 50-year loan. or if you have the if you're lending uh to buy something that's 50 years in duration, then you're going to have to offset that with a 50-year asset. And usually the banks would do that with treasuries. So, as an example, right now in a 30-year loan or, you know, a 20-year or something like that, uh, if the bank does keep that on or it ends up somehow on, uh, the bank's balance sheet as far as the the loan, then what would happen is they would need to offset that, let's just say liability. So, let's actually, let me back up here. So, if you have a liability on the bank's balance sheet that is 50 years in or whatever the duration is, it doesn't matter. Let's just say it's 10 years or something like that, then the bank has to offset that liability with a 10-year asset. So, they can usually do that very easily with a 10-year Treasury. See, and I'm just using that. I understand the banks are just going to offload this to Fanny and Freddy, but at some point in time, there is going to be a duration mismatch. That's really my my my point here. And that you're going to have 50-year mortgages floating around somewhere. And you're not going to have a 50year treasury to offset that somehow. You see? So, now this begs the question, if they do this, then are they going to go to a 50-year Treasury? I don't know. They they would almost have to because of how the financial plumbing works and how these balance sheets and how the financial institutions have to match up duration. That's a big question, right? And it's not just George Gammon saying that. Look at this. Wall Street has mused about the idea. In 2017, the Treasury Borrowing Advisory Committee said while it didn't see evidence yet of strong or sustainable demand for ultra longdated securities, it would be warranted to boost Treasury's capacity to borrow. So, what they're talking about is issuing a 50-year Treasury. That's what they're talking about. They're talking about issuing a 50-year Treasury, which again, if they go to a 50-year mortgage, you you would probably I'm sure there might be some other ways around it that I'm not thinking about, but you would probably the easiest way to do it, the best way to do it, I shouldn't say best, uh, the best way to match up the duration with the least risk is to have a 50-year Treasury if you have a 50-year mortgage. So then they say given there aren't any insurers or pension fund cash flows that stretch out that long. And again, why would you need that? Because you need something that as far as the duration mismatch. So that's what you got to think of. You got to think of number one, how bad of an idea this is just from the basic math that we went over and how this isn't going to decrease payments because housing prices are just going to adjust. But the thing it is going to do is make it so you literally never have equity in your house or at least not for 10 years or it's such a minuscule amount that you're building and you're paying double the amount of interest. And then on top of that, what we have to think about as rebel capitalists is the duration mismatch because right now you've got treasuries that match up with the uh maturity of mortgages we have. But if you extend the mortgage and you don't extend the treasuries, now all of a sudden you could have a potential mismatch there and that could dramatically impact the plumbing of the monetary system, the financial system. [sighs and gasps] Okay, now let's go from bad to worse because here we go. Trump tweets about this. Why not have a $2,000 tariff dividend, which is a sty check? And you know, regardless of what you think of Trump, you have to admit that this is straight BS and this is, let's say, manipulative. Even if you love Trump, you could have him tattooed on your forehead. I I I don't know. You have to admit that this is manipulative. Let me show you exactly what I'm referring to. So, he did a a post on uh Twitter or whatever, Truth Social. Ironically, it's called truth social when there is no one that I can think of that's farther from the truth than Donald Trump other than every other politician out there in the world. Uh Trump argued that the US was taking in trillions of dollars from tariffs. Wrong. [laughter] That's that's just patently false. And will soon be paying down the debt of 37 trillion. False. He touted record investments in the United States. Eh, false. Plants and factories. They're going up all over the place. Yeah, I was just in the United States. You know what? I didn't see any plants and factories. There's data centers that are going up everywhere. Absolutely. Because of the AI bubble, but that doesn't end well. That's just massive misallocation of resources [laughter] and malinvestment. But let's go through this here because the idea that he's trying to pitch, and this is what I'm saying, it's it's it really misrepresents the truth. The idea he's trying to pitch is they're making so much money from these incredible tariffs. I think he started off the tweet by saying that anyone that doesn't like tariffs is just an idiot or something like that or or just a fool. They're just fools if you don't approve of tariffs [laughter] because look, we're getting rich. We're we're we're we're we're the richest country in the world and we're just getting richer and richer and richer by the day because we've got all this money flowing. We're a Scrooge McDuck. We've got so much money coming in from the tariffs. So, what he fails to tell you is number one, foreigners are not paying the tariffs. And and I know I get a lot of push back on this, but I I think I get push back from people that like their only news source is like Fox or maybe Truth Social or maybe even Trump's Twitter feed is their only source of news. Because if you just do a little bit, just a little teeny weeny weeny weeny weeny bit of critical thinking, what you do is you're like, you know what, there's a pretty easy way to test this. What we have to do is we just have to look at import prices because import prices that exclude the tariffs. If the foreigners are paying the tariffs, then import prices would go down because it's so if you're selling a widget to the United States at $100 and you have to pay the tariff and you can't increase your prices to the American consumer. So then you have to lower your prices down to 90 bucks. So, it's a very easy litmus test to determine who is paying the tariffs. So, let's go over to a chart of import prices. Voila, they have not gone down. In fact, since retardation day, well, they're the exact same, right around 130. So prices have not gone down. So the fact that prices import prices have not gone down tells you definitively beyond a shadow of a doubt empirically that the foreigners are not paying the tariffs. So they say well who is George? Because the CPI is only at 3%. Okay. So again we go back to a pie chart. Now the consumer is not paying much of the tariffs. That is absolutely true. Not that Trump said that, but that's absolutely true. So, but we have this pie chart. You say maybe 10% is being picked up by the consumer. They're not paying all of it. Absolutely not. So, who is? It's the US importer. It's the US importer. And when I say they're paying the tariffs, a lot of people say yes, of course they pay the tariffs. That's that's who always pays the tariffs, but that doesn't necessarily mean it comes out of their margin. And the foreigners could be paying that. That's not what I'm saying. For anyone who wants to have that rebuttal and not listen to what I am saying, I am saying that yes, I get it. Foreign or uh US importers always pay the tariffs, but it doesn't necessarily mean that it's reducing their margin or they're the ones that are taking the haircut, right? So, what we have to do is we have to say start here. Foreigners definitively are not paying them. uh they're not paying them by a decrease in margin and they're literally not paying them. The consumer is probably picking up 10% of the tab and 90% of the tab or the decrease in margin is coming from the US importers. So what Trump is doing is he is proposing to increase taxes effectively just increase taxes on US businesses and then take the money and just give it to people for free money. So we're going to tax the rich and give to the poor. You know what? There has been a political party that has done that for quite some time. And if my memory serves me well, it is the Democrats. That's right. The Democrats are the ones that always say, "Tax businesses and let's give people free money." They're the party of higher taxes and free money. But now the Republicans are also the party of higher taxes on businesses and free money. [laughter] At least the Democrats are are honest about it. At least the Democrats are forthright. At least the Democrats will say to your face, "Yes, we want to increase taxes on business and we want to give people free money." The Democrat or the Republicans want to do the exact same thing, but they can't really say that. They got to Yeah, they got to be shifty about it. Like Trump comes out and makes it seem that we're just we we're flushed with cash to the point where we might as well just give the plebs a little bit here. I mean, my goodness gracious. give them some breadcrumbs down there at the end of the table. So, another reason why this is so disingenuous is because we still have a deficit. We still have a deficit. So, even if you think this is a great idea that wow, you know what's wrong? I mean, what's wrong with Trump? Okay, fine. He's he's he's sticking it to Wall Street. He's sticking it to the importers. So, what if they're US corporations? Who cares? Finally. Finally, we have a president that's actually taking action and doing something for the little guy by by sticking it to those big corporations and just giving us a dividend which eventually will turn into stimulus which will eventually turn into UBI. But let's just assume that's your position. Okay, great. Well, let's look at the deficit. Let me just type this in here. So, as you probably know, [laughter] we have a little bit of a deficit. That's right. So, what's happening here is the government is spending way more money than they're taking in. No shocker, right? But think about this. If they're spending more money than they're taking in, [clears throat] then where are they getting the extra money? That's right. They're issuing treasuries. They're issuing treasuries. So, let's think this through. Let's assume for a moment that the deficit is, I don't know, $1.7 trillion, which you can see. I don't know what it is now, but you know, broad strokes, that's roughly where we are. I don't know when this data uh it's updated October 16th. There you go. October 16th. So as of October 16th, we are running at about a $1.7 trillion deficit. So let's just assume for a moment you have a hundred billion dollars that comes in in tariffs. Okay. Well, you've got two options there, don't you? You could either reduce the size of the deficit, which means you have to you could reduce the amount of treasuries you issue, or you could spend the money. And if you spend the money, the hundred billion, now you have to issue a h 100red billion worth of treasuries that you otherwise would not have had to issue. So you see what he's doing? What he's doing is he's selling treasuries. He's literally increasing the debt above and beyond where it otherwise would have been to give the STEMI checks to the average Joe and Jane to make it seem like it's coming out of additional revenue or you or it's or it's it's coming it isn't coming as a result of increasing the debt. He's making it seem that way in order to buy their vote and then saying that anyone that wouldn't favor tariffs is a complete fool. They're an idiot because we're just getting so rich that we're not only going to be able to pay a dividend, but we're also going to be able to pay off the the we're going to be able to pay off the $37 trillion in debt or at least make a large dent in it. Really, how are you going to pay off the $37 trillion in debt if you're not reducing the deficit? Because if all this money that's coming in with tariffs isn't reducing the deficit, if you're just spending it like a drunken sailor on sty checks that by the way will just increase inflation just like the co stimmy checks did. If then then you can't sit there with any honesty. whatsoever and say that this somehow will benefit the debt. It absolutely will not. It and and again, this is not George. So, I know a lot of people are going to be pissed off at this video. Oh, George, you don't get it. We got to do something. Finally, we have a guy that's up there in office that's on our side. It's that's doing something for the the, you know, the average Joe and Jane or whatever the argument is. And fine, if that's your position, great. But what I'm trying to encourage you to do is set politics aside for a moment. Just set the tribalism aside and ask yourself, did you on net balance, was society better or worse as a result of the STEMI checks that we got from Biden? I think pretty much 99% of the people on this live stream right now would say we are far worse off because that increased the inflation rate. And at the end of the day, yes, we got a little bit of a sugar rush where people were able to afford the higher prices because they were flushed with stimulus money. But when that runs out now all of a sudden their the prices adjust higher, but their paychecks didn't. So now you have a big discrepancy where their overall purchasing power has decreased. So why would it be any different now? The answer is it wouldn't. It wouldn't. It's just as bad of an idea under Trump as it is under Biden. But the the the disingenuous part of it is Trump is making it seem like it's not increasing the deficit above and beyond where it otherwise would be. And that is a lie. It's a lie. No matter how much you love Trump, it's a lie. It's just math. If you don't believe me, stop the video and think about it for a while. Just think about the fact that you're running a $1.7 trillion deficit. And if you have an additional hundred billion come in from tariffs, how are you going to spend that money without impacting the deficit? Now, it might not go up, but it's going to be higher than it otherwise would have been because you could have taken the hundred billion and you could have used that to decrease the deficit. But no, no, no, no, no. Trump's not going to do that because he's not a small government guy. He's a he's just as big of a government guy as the kid that just won in New York. It's just they have different marketing. That's it. They both want the same thing. They want bigger government and socialism. And unfortunately, it looks like we're going to get it because like I said earlier, the check and balance component of this was at one point in time the Republicans didn't want bigger government and they didn't want STEMI checks and they didn't want higher taxes, but unfortunately those days are completely gone. So now it's just a uni party with just slightly different marketing and both of them want the exact same things. So that's probably what we're going to get which is going to lead to the exact same thing that we saw in 2020 through 2022. And most likely you get a recession first. So it's disinflationary and then coming out the other side of the recession especially with AI taking jobs now which we can see in the challenger survey. Then you go straight to UBI and then coming out of the recession then I don't know what does the CPI go to 12% 15% 20%. It's going to be the exact same thing as the 1940s. I've been saying that for like five years now. We're just we're we're in the 1940s. So if you think that inflation going higher and wages stagnating is a good thing and if you think that mortgage payments staying the same but home prices going up and putting young people in a position where they can never build equity basically and they're paying twice as much interest. If you think all those things are good, then great. Then then applaud these policies. applaud, then you want a 50-year mortgage and you definitely want STEMI checks, but I would assume that most people don't want that. All right. I mean, we're going to have to see how this plays out. You can sense my frustration here because it's just it's unfortunate. It it's really really really unfortunate. You know, Trump could have done so many good things and he has done some good things. Absolutely. But we're at the point now where the bad things that he's doing far far outweigh far far outweigh the good things. And unfortunately, I think he's just going to get worse. Hopefully, I'm wrong. All right, guys. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market capitalism. In free market capitalism, we don't have 50-year mortgages. We don't even have 30-year fixed rate mortgages. and we actually have 20% down payments and we don't have any stim checks in which case we wouldn't have a deficit and we would have a very very low amount of debt. But we have to have free market capitalism which means less government not more government. See you in the next video.
The Housing Market Just Changed Forever (What You Need To Know)
Summary
Transcript
Hello fellow robo capitals. Hope you're well. So we got big news in the housing market and we have big news in the form of stmmies. I've got a twofer for you today as far as government stupidity. That is right. So first and foremost, Trump comes out or the administration over the weekend and says, you know what would be fantastic for the housing market? It would be a 50year mortgage. Because right now we have a 30-year mortgage, and everyone likes that one. And a 40-year mortgage. Well, that's kind of the same. So, let's just do a 50-year mortgage. In fact, let's just do a hundredyear mortgage. Or maybe we can do a,000-year mortgage. And then your down payment or what your down payment would probably be the same, but then your monthly payment would be like a dollar a month. Think about how awesome that would be for the economy. And think about how affordable housing would be then. >> [laughter] >> I mean, this is just the stupidity of this is staggering. Is staggering. And I haven't even gotten to the STEMI checks. He wants to do STEMI checks again. So, let's get into it. If you saw the thumbnail there, housing prices are too low. Yeah. I mean, is he saying housing prices are too low? No, not literally. But that's what he's implying here. Because if you do a 50year mortgage, then what's going to happen to housing prices? They're just going to go up. And then housing prices go up and then the down payment or excuse me, the monthly payment stays the same. And you're just making consumers worse off because then the monthly payments are the same, but then they literally build zero equity for like 25 years or I'm exaggerating. But this is this is like the motherload of bad ideas in the housing market. And you know what's really gets under my skin is if Biden would have done this, the MAGA crowd would have completely lost their minds. Like the government's getting involved. This is too much government. This is going to increase housing prices. It's going to be bad, bad, bad, bad, bad. But I assure you that probably 90% of the mega crowd think this is a great idea. Oh yeah, 50-year mortgages. Yes, awesome. Let's just do that. [sighs] And by the way, if you think that a and this is probably going to be a fixed rate, which no bank in their right mind would ever ever ever ever issue. So what's gonna happen here? We're likely and and you know once the camel's nose is underneath the tent it might not happen right away but the more the only check and balance we had were the Republicans as far as keeping the Democrats from going full socialist. But now the Republicans want socialism or bigger government bigger government socialism just as bad as the Democrats do. They just market it in a slightly different way. So, I think any like freebie the government is thinking about or texting about or tweeting about, I I think it's a very high probability that we have it within the next 3 years. Like, I would be shocked if we didn't have UBI in the next three years. I would be absolutely shocked. And we're going to get into the whole STEMI check thing here in a moment, but let's remember that a 30-year fixed rate loan is not a market that that's not a free market thing. Like the market wouldn't produce that because there's just way too much inflation risk over 30 years. So banks would never do that. The reason we have this in the United States is because banks go ahead and they act like a mortgage broker really like they're just the loan originator and then before the ink is dry they just pawn that off on Fanny and Freddy and then if Fanny and Freddy goes bust then who picks up the tab? That would be you. That would be you, the taxpayer. So when this inevitably blows up like it will, then you guys are on the hook and this is being done in the name of the consumer, the average Joe, because we've got to make housing more affordable. Well, a you're not going to make housing more affordable. You're just going to make it a lot worse, and you're going to increase housing prices. Remember, I did a video on this probably three months ago because Trump and the administration was talking about lowering or making housing more affordable. Housing more affordable, housing more affordable. And I said, they're actually between a rock and a hard place here because by saying you want to make housing more affordable, you are also saying that you want housing prices to come down. But if housing prices come down, then that impacts a good majority of your voters who are old people who own houses. And the old people that own houses, they don't want housing prices to come down. They want them to go up. So, how can you make housing prices go up while at the same time giving the illusion of making it more affordable? This is it. This is it. And obviously, the banks won't do this. So, you have to just get more government. That's what the endgame is here. Just more government, bigger government, and then we're just going to socialize losses. I mean, this is such a bad idea. And then think about this. So, the home prices are going to adjust upwards, right? And therefore, you're going to have the people who own assets, they're going to have more purchasing power. the people that don't have assets, they're not going to have any more purchasing power because things just adjust. And then what's going to happen? Prices are going to go up. So you have you're just turbocharging the K-shaped economy, which if we do have a recession, home prices come down, you take the K-shaped economy and it turns into a little Hshaped economy. I mean, I don't know if I could think of a worse idea. If you put me in charge of the housing market and you said, "George, what's the worst idea you could possibly think of?" I would probably say a 50-year mortgage. Well, I'd probably say a 100red-year mortgage, but I I would say a longer maturity or longer duration on the mortgage. That would be the worst idea I could think of if my objective was to actually improve the standard of living for the average American. Now, if my objective was just to benefit old rich people, then yeah, that's that that that would not be a bad idea. That would be a good idea. But just think about the homelessness rate that we've seen just since 2020. And you have to attribute a portion of that to home prices being skyhigh. And this now of course there are other dynamics here. If we have the real if we have the u economy implode, if we have the unemployment rate go up, then that's going to bring housing prices down. Uh regardless if you have a 50-year mortgage or whatever, but we're just saying all else being equal. Okay? So all else being equal, if nothing else changes except that, then you're going to increase home prices and you're going to make things more unaffordable. So let let's just let me show you here real quick. Let me do a screen share. And then, you know, that's obviously not, believe it or not, that's not the worst idea they had over the weekend because we haven't even gotten to the STEMI checks yet, which we know how well that worked for the economy. I mean, think about how much inflation the stim checks created from 2020 to 2022. And that was during what would have been a massive deflationary bust. Okay. Well, now that we're not in a deflationary bust, just think what stim checks would do to inflation now or the price of stuff. And people say, "Oh yeah, give me the free money. Give me the free money." But as soon as the free money's over with, prices have adjusted higher, but their wages are still the same, and therefore their purchasing power decreases. But it's the exact same nonsense with housing, except for the few people up there that already own homes. I mean, for and for the young people, this just completely crushes them. Let me show you what I'm talking about here. Let's go over to a mortgage calculator. And so I just this is the default right here. $400,000 home, which if we get a 50-year mortgage that's going bye-bye. I mean, you you're not going to be able to buy it's going to be like Australia or like Canada where you can't even buy like a 700 square foot home that was built in the 1950s for 400 grand. But let's just use this as our our base here. So, the monthly payment would go is starting at $2,289. Okay. So, now let's go ahead and put in the 50-year term. Now, another thing I want you to notice is the total amount of interest paid. You see that total amount of interest paid is roughly $369. And then you can see this dotted line because I believe this is the what would this be here? That would probably be how much equity you have or this is probably the amount the the dark blue down here is probably the amount that's going to principal. Yeah. So let's see how this changes in the middle. This is how much is going to interest. So let's see how this changes. We got the 50-year in there. Now calculate. So your your monthly payment only goes down by $200. As Thomas Soul always says, there are no solutions. There are only tradeoffs. So, what's the tradeoff here? And again, this assumes that home prices won't go up or adjust higher to where your mortgage payment on that same house would still be the exact same, which it likely would. But what are the trade-offs here? So, you save $200 a month. Woohoo. Awesome. Fantastic. Now, look at how much equity you're building. the the the the amount that's going to principal here is $1,000 where I'm assuming these are annual payments here. So, the amount that's going to principal, $1,000 if you pay this for a year [laughter] and then and then $19,000 is going to interest. And then look at the total interest paid. It goes from 369 to 687. 687. And think about that. Now what happens if home prices like go down, heaven forbid, in nominal terms, because you're ba you basically have no more equity than your down payment. I'm sure Trump's going to come out with something that makes you uh that gives you a subsidy for the down payment. So, we're like, "Oh, no. Uh, you know, we can't have home prices go down. We have to have them continue to go up because we need to buy votes, but we also need to make home prices more affordable. [laughter] Again, there's going to be a cost. There's going to be a cost. There is no benefit without a cost. There are only tradeoffs, right? [snorts] So, let's just take the down payment to zero. Woohoo. or let's just take it to 10% or 5% or whatever it is. And then you're basically building zero equity every single year for the first I mean look at this. We go out to 2035. [laughter] I didn't even do this before we went live. This is so ridiculous. 2035. So 10 years from now, your your $24,000 a year in payments is only give is only going 1,800 of it is going to principal [laughter] in 10 years. In 10 years of making payments, you're still only going to have $1,800 a year go to building equity. And so then obviously the question becomes, what if home prices actually go downlightly 5%. I mean, you're totally wiped out. You're totally wiped out. You're just it it's jingle mail. remember what they called it back in the GFC where people just mailing in the keys like why why would you [laughter] like you're totally up you have a 5% move in the market and basically you're totally wiped out your equity's gone like you're done and yet you still are making payments out you still might want the roof over your head that's fine but especially for investors or if you have a second I mean this is just again think about the unintended consequ consequences here. I mean, part of the reason we had the GFC is because you had 30-year fixed rate. Well, I guess that would be more adjustable rate mortgages, but it was financial engineering. It was financial engineering. You no money down, liar loans, all these things. And and I'm defining financial engineering is something that is non-market, right? So, and the the the free market would never come up with a mortgage that was 0% down. That that's not that's not real. You need the government for that. Just like the free market would never have a 30-year fixed rate mortgage. The government has to be involved for that. And when I say the government, I'm talking about you, the taxpayer, are inevitably going to have to bail this out. I mean, the the burden is going to lie on your shoulders. So, here's the irony. Trump is coming out and saying, "We're going to do this to make housing more affordable," which is not going to make housing more affordable. It's just going to make it a thousand times more risky. And when you do see this thing blow up, then the people he is supposedly helping are the ones that are going to bear the brunt of the downside. That's what we're doing here. And it's all just to buy votes for the midterms or whatever the hell is coming up in the United States. I mean, it's again, if you had to say, George, if your priority is improving the standard of living for the poor and middle class, what's the worst thing that you could think of to do in the housing market? This is it. This is it. It's really it's it's you can see my frustration because, you know, I voted for Trump and I voted for Trump because I was all about free speech. I'm like, no matter how bad the problems get in the United States, as long as we have free speech, we can fix the problems. We can fix the problems. We're Americans. We're great entrepreneurs. As long as we have free speech, we can fix the problems. And so, fortunately, Trump hasn't been too bad on that. although he has tried to pull back the free speech thing with the burning of the flag and but we'll save that for a separate video. But I'm like, you know, I I voted for the guy and it's just frustrating that he's just getting worse and worse and worse and worse as if your definition of worse is expanding the role of government in the economy. And that is definitely outside of free speech. That is definitely my idea of worse. Now, you say, "Well, he's doing some good things here at the border." Great. Fantastic. I'll give him kudos over there. But 1% of what he's doing is maybe good or 10% or whatever it is, but the vast majority of this and it's just getting worse by the day. Like the pie chart when he started like 90% of what he was doing was good and 10% was bad. But it the pie chart just keeps evolving and it keeps getting it keeps going in the wrong direction. So now we're at about 75% bad and 25% good. And we're not even a year into it. It's like where are we going to be in 3 years? We're likely going to be at 99% bad and 1% good. And look, if you're whole team mega and all that, I mean, fantastic. Great. You're supporting the Trump the president, but you have to be principled about this at some point. You have to be principled. And if something is against your principles, if there's a policy that is against your principles, you have to stand up and say, "No, I don't agree with that. I I like Trump, but I I don't agree with what he's doing here." Whereas 50% of And it's not just maggots. It's on both sides. They're just tribal. So, whoever your guy is or whoever your girl or whoever your party is, whoever your whether you're team red or team blue, whatever your team says, you just completely abandon your principles and you say, "Yes, I support that." And then you just use mental gymnastics to try to rationalize as to why that's a good idea. No matter how bad the ideas are, you just use those mental gymnastics to try to rationalize. I mean, Trump could come out and say that he wants to lower the speed limit on the highways to 10 miles per hour, and I can assure you 50% of the MAGA crew would say, "Yeah, but yeah, I had never thought of that. Oh my gosh, that's brilliant. That's such a great idea. I mean, it's it's a matter of national security that if we lower the speed limit down to 10 miles per hour on the highway, we're going to use a lot less oil. And if we use less oil, then we can allocate that energy to AI. And then we can beat China at AI. And then we're less dependent on Saudi Arabia. Win, win, win. TRUMP. YES. 5D CHESS AGAIN. YEAH. [laughter] That's the world we're living in. Unbelievable. But unfortunately, we're not done. I mean, let's go back. I I had an article pulled up here, and we haven't even gotten to the STEMI checks. Geez. So, here you go. Right now, there is no 50-year Treasury. Great point. Great point. because this is something that I look [sighs and gasps] not that Trump has thought this through at all, but this is something that he can't even comprehend because he doesn't have anyone around him other than Bent, but Bent is such a yes man that that he's who knows what's happening behind the scenes. But here's a big problem with the 50-year mortgage is that when you have a 50-year mortgage, that's going to be pawned off on somebody. I mean, I don't know who. And yes, it's going to go to Fanny and Freddy, but then what are Fanny and Freddy going to do with it? They're going to turn it into a mortgage back sausage and they're going to pawn it off on Wall Street. And Wall Street is going to sit there and sell it to probably your pension fund that's going to somehow convince them that it's a great idea to buy a 50-year mortgage. Or you might even have some stupid idiotic banks that buy them. But if the banks buy them or if there's some sort of lending on a financial instit institution's balance sheet, well, let's just say it's to buy uh a mortgage back sausage that has 50 years of duration or whatever. I I don't know, you know, the financial plumbing there and how they operate the balance sheets in the network that is the monetary system gets pretty complex. But what I can tell you is that if they're issuing and it's not just banks, I understand they're not going to keep these on their balance sheet, but it's going to end up on someone's balance sheet, right? And if they've got and if someone's borrowing, then that's the asset, if you want to call it that. And then the offsetting uh liability would be a 50-year loan. or if you have the if you're lending uh to buy something that's 50 years in duration, then you're going to have to offset that with a 50-year asset. And usually the banks would do that with treasuries. So, as an example, right now in a 30-year loan or, you know, a 20-year or something like that, uh, if the bank does keep that on or it ends up somehow on, uh, the bank's balance sheet as far as the the loan, then what would happen is they would need to offset that, let's just say liability. So, let's actually, let me back up here. So, if you have a liability on the bank's balance sheet that is 50 years in or whatever the duration is, it doesn't matter. Let's just say it's 10 years or something like that, then the bank has to offset that liability with a 10-year asset. So, they can usually do that very easily with a 10-year Treasury. See, and I'm just using that. I understand the banks are just going to offload this to Fanny and Freddy, but at some point in time, there is going to be a duration mismatch. That's really my my my point here. And that you're going to have 50-year mortgages floating around somewhere. And you're not going to have a 50year treasury to offset that somehow. You see? So, now this begs the question, if they do this, then are they going to go to a 50-year Treasury? I don't know. They they would almost have to because of how the financial plumbing works and how these balance sheets and how the financial institutions have to match up duration. That's a big question, right? And it's not just George Gammon saying that. Look at this. Wall Street has mused about the idea. In 2017, the Treasury Borrowing Advisory Committee said while it didn't see evidence yet of strong or sustainable demand for ultra longdated securities, it would be warranted to boost Treasury's capacity to borrow. So, what they're talking about is issuing a 50-year Treasury. That's what they're talking about. They're talking about issuing a 50-year Treasury, which again, if they go to a 50-year mortgage, you you would probably I'm sure there might be some other ways around it that I'm not thinking about, but you would probably the easiest way to do it, the best way to do it, I shouldn't say best, uh, the best way to match up the duration with the least risk is to have a 50-year Treasury if you have a 50-year mortgage. So then they say given there aren't any insurers or pension fund cash flows that stretch out that long. And again, why would you need that? Because you need something that as far as the duration mismatch. So that's what you got to think of. You got to think of number one, how bad of an idea this is just from the basic math that we went over and how this isn't going to decrease payments because housing prices are just going to adjust. But the thing it is going to do is make it so you literally never have equity in your house or at least not for 10 years or it's such a minuscule amount that you're building and you're paying double the amount of interest. And then on top of that, what we have to think about as rebel capitalists is the duration mismatch because right now you've got treasuries that match up with the uh maturity of mortgages we have. But if you extend the mortgage and you don't extend the treasuries, now all of a sudden you could have a potential mismatch there and that could dramatically impact the plumbing of the monetary system, the financial system. [sighs and gasps] Okay, now let's go from bad to worse because here we go. Trump tweets about this. Why not have a $2,000 tariff dividend, which is a sty check? And you know, regardless of what you think of Trump, you have to admit that this is straight BS and this is, let's say, manipulative. Even if you love Trump, you could have him tattooed on your forehead. I I I don't know. You have to admit that this is manipulative. Let me show you exactly what I'm referring to. So, he did a a post on uh Twitter or whatever, Truth Social. Ironically, it's called truth social when there is no one that I can think of that's farther from the truth than Donald Trump other than every other politician out there in the world. Uh Trump argued that the US was taking in trillions of dollars from tariffs. Wrong. [laughter] That's that's just patently false. And will soon be paying down the debt of 37 trillion. False. He touted record investments in the United States. Eh, false. Plants and factories. They're going up all over the place. Yeah, I was just in the United States. You know what? I didn't see any plants and factories. There's data centers that are going up everywhere. Absolutely. Because of the AI bubble, but that doesn't end well. That's just massive misallocation of resources [laughter] and malinvestment. But let's go through this here because the idea that he's trying to pitch, and this is what I'm saying, it's it's it really misrepresents the truth. The idea he's trying to pitch is they're making so much money from these incredible tariffs. I think he started off the tweet by saying that anyone that doesn't like tariffs is just an idiot or something like that or or just a fool. They're just fools if you don't approve of tariffs [laughter] because look, we're getting rich. We're we're we're we're we're the richest country in the world and we're just getting richer and richer and richer by the day because we've got all this money flowing. We're a Scrooge McDuck. We've got so much money coming in from the tariffs. So, what he fails to tell you is number one, foreigners are not paying the tariffs. And and I know I get a lot of push back on this, but I I think I get push back from people that like their only news source is like Fox or maybe Truth Social or maybe even Trump's Twitter feed is their only source of news. Because if you just do a little bit, just a little teeny weeny weeny weeny weeny bit of critical thinking, what you do is you're like, you know what, there's a pretty easy way to test this. What we have to do is we just have to look at import prices because import prices that exclude the tariffs. If the foreigners are paying the tariffs, then import prices would go down because it's so if you're selling a widget to the United States at $100 and you have to pay the tariff and you can't increase your prices to the American consumer. So then you have to lower your prices down to 90 bucks. So, it's a very easy litmus test to determine who is paying the tariffs. So, let's go over to a chart of import prices. Voila, they have not gone down. In fact, since retardation day, well, they're the exact same, right around 130. So prices have not gone down. So the fact that prices import prices have not gone down tells you definitively beyond a shadow of a doubt empirically that the foreigners are not paying the tariffs. So they say well who is George? Because the CPI is only at 3%. Okay. So again we go back to a pie chart. Now the consumer is not paying much of the tariffs. That is absolutely true. Not that Trump said that, but that's absolutely true. So, but we have this pie chart. You say maybe 10% is being picked up by the consumer. They're not paying all of it. Absolutely not. So, who is? It's the US importer. It's the US importer. And when I say they're paying the tariffs, a lot of people say yes, of course they pay the tariffs. That's that's who always pays the tariffs, but that doesn't necessarily mean it comes out of their margin. And the foreigners could be paying that. That's not what I'm saying. For anyone who wants to have that rebuttal and not listen to what I am saying, I am saying that yes, I get it. Foreign or uh US importers always pay the tariffs, but it doesn't necessarily mean that it's reducing their margin or they're the ones that are taking the haircut, right? So, what we have to do is we have to say start here. Foreigners definitively are not paying them. uh they're not paying them by a decrease in margin and they're literally not paying them. The consumer is probably picking up 10% of the tab and 90% of the tab or the decrease in margin is coming from the US importers. So what Trump is doing is he is proposing to increase taxes effectively just increase taxes on US businesses and then take the money and just give it to people for free money. So we're going to tax the rich and give to the poor. You know what? There has been a political party that has done that for quite some time. And if my memory serves me well, it is the Democrats. That's right. The Democrats are the ones that always say, "Tax businesses and let's give people free money." They're the party of higher taxes and free money. But now the Republicans are also the party of higher taxes on businesses and free money. [laughter] At least the Democrats are are honest about it. At least the Democrats are forthright. At least the Democrats will say to your face, "Yes, we want to increase taxes on business and we want to give people free money." The Democrat or the Republicans want to do the exact same thing, but they can't really say that. They got to Yeah, they got to be shifty about it. Like Trump comes out and makes it seem that we're just we we're flushed with cash to the point where we might as well just give the plebs a little bit here. I mean, my goodness gracious. give them some breadcrumbs down there at the end of the table. So, another reason why this is so disingenuous is because we still have a deficit. We still have a deficit. So, even if you think this is a great idea that wow, you know what's wrong? I mean, what's wrong with Trump? Okay, fine. He's he's he's sticking it to Wall Street. He's sticking it to the importers. So, what if they're US corporations? Who cares? Finally. Finally, we have a president that's actually taking action and doing something for the little guy by by sticking it to those big corporations and just giving us a dividend which eventually will turn into stimulus which will eventually turn into UBI. But let's just assume that's your position. Okay, great. Well, let's look at the deficit. Let me just type this in here. So, as you probably know, [laughter] we have a little bit of a deficit. That's right. So, what's happening here is the government is spending way more money than they're taking in. No shocker, right? But think about this. If they're spending more money than they're taking in, [clears throat] then where are they getting the extra money? That's right. They're issuing treasuries. They're issuing treasuries. So, let's think this through. Let's assume for a moment that the deficit is, I don't know, $1.7 trillion, which you can see. I don't know what it is now, but you know, broad strokes, that's roughly where we are. I don't know when this data uh it's updated October 16th. There you go. October 16th. So as of October 16th, we are running at about a $1.7 trillion deficit. So let's just assume for a moment you have a hundred billion dollars that comes in in tariffs. Okay. Well, you've got two options there, don't you? You could either reduce the size of the deficit, which means you have to you could reduce the amount of treasuries you issue, or you could spend the money. And if you spend the money, the hundred billion, now you have to issue a h 100red billion worth of treasuries that you otherwise would not have had to issue. So you see what he's doing? What he's doing is he's selling treasuries. He's literally increasing the debt above and beyond where it otherwise would have been to give the STEMI checks to the average Joe and Jane to make it seem like it's coming out of additional revenue or you or it's or it's it's coming it isn't coming as a result of increasing the debt. He's making it seem that way in order to buy their vote and then saying that anyone that wouldn't favor tariffs is a complete fool. They're an idiot because we're just getting so rich that we're not only going to be able to pay a dividend, but we're also going to be able to pay off the the we're going to be able to pay off the $37 trillion in debt or at least make a large dent in it. Really, how are you going to pay off the $37 trillion in debt if you're not reducing the deficit? Because if all this money that's coming in with tariffs isn't reducing the deficit, if you're just spending it like a drunken sailor on sty checks that by the way will just increase inflation just like the co stimmy checks did. If then then you can't sit there with any honesty. whatsoever and say that this somehow will benefit the debt. It absolutely will not. It and and again, this is not George. So, I know a lot of people are going to be pissed off at this video. Oh, George, you don't get it. We got to do something. Finally, we have a guy that's up there in office that's on our side. It's that's doing something for the the, you know, the average Joe and Jane or whatever the argument is. And fine, if that's your position, great. But what I'm trying to encourage you to do is set politics aside for a moment. Just set the tribalism aside and ask yourself, did you on net balance, was society better or worse as a result of the STEMI checks that we got from Biden? I think pretty much 99% of the people on this live stream right now would say we are far worse off because that increased the inflation rate. And at the end of the day, yes, we got a little bit of a sugar rush where people were able to afford the higher prices because they were flushed with stimulus money. But when that runs out now all of a sudden their the prices adjust higher, but their paychecks didn't. So now you have a big discrepancy where their overall purchasing power has decreased. So why would it be any different now? The answer is it wouldn't. It wouldn't. It's just as bad of an idea under Trump as it is under Biden. But the the the disingenuous part of it is Trump is making it seem like it's not increasing the deficit above and beyond where it otherwise would be. And that is a lie. It's a lie. No matter how much you love Trump, it's a lie. It's just math. If you don't believe me, stop the video and think about it for a while. Just think about the fact that you're running a $1.7 trillion deficit. And if you have an additional hundred billion come in from tariffs, how are you going to spend that money without impacting the deficit? Now, it might not go up, but it's going to be higher than it otherwise would have been because you could have taken the hundred billion and you could have used that to decrease the deficit. But no, no, no, no, no. Trump's not going to do that because he's not a small government guy. He's a he's just as big of a government guy as the kid that just won in New York. It's just they have different marketing. That's it. They both want the same thing. They want bigger government and socialism. And unfortunately, it looks like we're going to get it because like I said earlier, the check and balance component of this was at one point in time the Republicans didn't want bigger government and they didn't want STEMI checks and they didn't want higher taxes, but unfortunately those days are completely gone. So now it's just a uni party with just slightly different marketing and both of them want the exact same things. So that's probably what we're going to get which is going to lead to the exact same thing that we saw in 2020 through 2022. And most likely you get a recession first. So it's disinflationary and then coming out the other side of the recession especially with AI taking jobs now which we can see in the challenger survey. Then you go straight to UBI and then coming out of the recession then I don't know what does the CPI go to 12% 15% 20%. It's going to be the exact same thing as the 1940s. I've been saying that for like five years now. We're just we're we're in the 1940s. So if you think that inflation going higher and wages stagnating is a good thing and if you think that mortgage payments staying the same but home prices going up and putting young people in a position where they can never build equity basically and they're paying twice as much interest. If you think all those things are good, then great. Then then applaud these policies. applaud, then you want a 50-year mortgage and you definitely want STEMI checks, but I would assume that most people don't want that. All right. I mean, we're going to have to see how this plays out. You can sense my frustration here because it's just it's unfortunate. It it's really really really unfortunate. You know, Trump could have done so many good things and he has done some good things. Absolutely. But we're at the point now where the bad things that he's doing far far outweigh far far outweigh the good things. And unfortunately, I think he's just going to get worse. Hopefully, I'm wrong. All right, guys. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market capitalism. In free market capitalism, we don't have 50-year mortgages. We don't even have 30-year fixed rate mortgages. and we actually have 20% down payments and we don't have any stim checks in which case we wouldn't have a deficit and we would have a very very low amount of debt. But we have to have free market capitalism which means less government not more government. See you in the next video.