If Money's Just Circulating… Who’s Actually Winning?

We don’t talk politics for the drama—we talk policy for how it affects you. In this episode, we unpack what’s really going on in the economy beyond the headlines—from tariffs and tax strategy to real estate moves and interest rate games.

If you’ve ever felt like the economic levers are out of your control, this convo will help you see how the system works—and how to work within it to build real, lasting freedom.

We get honest about:

• How government incentives actually work (hint: they’re not loopholes)
• What rising and falling interest rates mean for everyday investors
• Why real estate still makes sense (even with higher rates)
• The real reason inflation exists—and how the wealthy use it to their advantage
• Why we’re taxed to earn, taxed to spend, and taxed again—and what to do about it
  
  
  

📌 Key Topics:
 ✅ The purpose behind tariffs and why they can benefit local business
✅ Why bonus depreciation is more than just a tax perk—it’s a growth strategy
✅ The inflation-interest rate tug of war (and where we think it's heading)
✅ How to move your money with intention—not fear
✅ The case for keeping your cash in motion, not in hiding

There’s no need to obsess over the news—just learn to watch it like a strategist.

Chapters:

00:00 Economic Landscape Under Trump

05:46 Impact of Tariffs and Market Uncertainty

12:14 Pharmaceutical Industry and Economic Implications

17:46 Interest Rates and Real Estate Dynamics

23:56 Future Economic Predictions and Market Trends

Transcript

Ryan Miller (00:00)

No, all honesty though, I don't want to talk about Trump, but I'd like to talk about the economy. so we did Trump's coming into office back in December, January, something like that. Was that the election before he took office? And we talked about the economy and now there's been pretty major things right now. They have the big, beautiful bill. They're trying to vote on by the four. It doesn't come out after that. Um, but, uh,

They had the tariffs for the last however many months. just released that the tariffs put $88 million in the circulation or, you know, revenue for America. ⁓ and what's the other thing? ⁓ he keeps, the Fed chair, pow. Like he keeps playing, playing Trump games with him and throwing a fire in them and said, I'll these socks and stuff. So those are pretty big levers that he's pulled or pulling.

that are affecting the economy. So I just want to take a second. How's that affect ⁓ ownership? So business ownership, real estate ownership. I don't really care about the political side of things, but I watched politics more for how does it affect me? You know, what are these laws that they're passing versus the political side of things? You can't believe that.

keeping up with the news as much as I used to, but just understanding how money moves. And of course, people can be the exception to the rule, but the general rule is what economists follow, right? Is what do people do when there's uncertainty in the market? And they start to move their money out of the stock market, out of real estate, out of other types of affiliated securities, and into safer investments like bonds. And what that...

that does is increase bond yields, right? And decreases the, or expands the cap rates on real estate and other types of commercial investments. So, I mean, that's what I've been seeing is the wells have been drying up in most of the investment areas. The stock market's completely uncertain. People don't know what's gonna happen. Every news story, it's like seeing how volatile all the stocks are. Crazy. I can't even follow it. That's why I don't like stock, but it's a whole different.

I invest in the stock market just from the S and P security. Yeah. I mean it makes like I get a 401k and they didn't, do matching like, ⁓ but you're not daily tracking stuff and yeah, mean, not looking this week. I saw the, ⁓ the plan to get rid of, or to, ⁓ limit a pharmaceutical market. Like that is going to destroy those stocks. You talk about as far as advertising on TV.

No, they're doing something to limit their, to cap their whatever. Yeah. There's quite a few things that they're talking about there. I don't know enough about it to even talk about them. Because we're only one of two countries that allows advertisement, performer circles on TV. Yeah. It's not just advertisement though. It's something with capping their margins, like where they can develop a prescription for a dollar and then they sell it for a hundred dollars. They're going to try and restrict that.

I don't know enough about it to even have an opinion about it, but I just know that. How many years of research, ⁓ millions of dollars that they spend, like they should be able to, you know, anyhow. I get it. I mean, the general public talks about, you know, the pharmaceutical industry is just crooks and all this stuff. And, know, I agree with, you know, I stay pretty neutral about that. I, I don't believe in charging someone, you know, well, one,

We have a son with a peanut allergy. needs an EpiPen and those EpiPens are good for three to five years, but they make you get a new one every six months or every year and they're 80, 90 bucks, you know, per whatever 200 bucks without insurance. I think that's kind of ridiculous, but I do understand from the R &D. Yeah, I mean, guess you have to, it's easy to look at, drill into one prescription. Like, they're charging.

500 % markup on this. think it's, was a diet, ⁓ diabetic medicine has been a huge talking point. I don't know. Yeah. But what's their overall percentage margin? Insulin. This was called say. Yeah. So is everything 500 % or is it just that one thing? And why is it that much? Cause they could have had 20 years of research that went into that and they're just recouping their money. So it's easy to jump into the political

the politicalization of the pharmaceutical company. If you look at them and like, they're 15 % profit margin, that's a normal profit margin for, you know, a typical business, you know, you can't look at the micro, have to look at the micro. And I think that the, the, where people get anti-capitalist almost about it. So we've, we've talked before about the, um, your, your relative or your compensated relative to the value you're providing. Right. And

the analogy of the guy that goes into a ship and bangs on a pipe with a hammer and fixes the ship charges 5,000 and they say, you do is swing a hammer and he puts an invoice that says swinging a hammer, $1. It's like knowing where to hit 4,999. I get that aspect of it. It gets emotional when people are saying that you're, basically leveraging people's desire to, you know, cure their elements or, or, you know, cancer, whatever treatments and all that stuff. And it,

exploiting that for profitability. There's, I mean, I could see the argument from both sides there. Yeah, I mean, I could go on a whole podcast just about this one topic, but I'll leave my, my back to the economy, opinions to that. Like the economy, money dries up when, things are uncertain. I guess from my standpoint, I'm kind of excited about, so

There was aspects of this big, beautiful bill that I didn't like. I think Friday, Saturday, they, they cut them out. ⁓ or at least a big one, then that one being the, ⁓ the selling off of federal lands. I don't even know if you're watching that. that one got cut out and that more of political thing. ⁓ but from a, from a money standpoint, an investment standpoint, like they're talking about bringing back a hundred percent bonus depreciation, making it full term or full like.

Why though? Why does it excite me or why are they doing it? Well, both. One, what is the intention behind it? And then two, why do you like that stuff? The intention I think from the government, well, I think it's two parts. they have a lot of rich buddies that knew the tax write-off. I mean, that's the political side of it, but it stimulates the economy. So what does that mean? It keeps money in flow. if people...

If they don't want money setting, sitting on the sidelines so people could take their investment and, or their money and invested in something, be it affordable housing, be it new housing, be it, uh, whatever it is. But I hate the term loophole. Like the government puts laws into place, economic laws into place to help stimulate the economy. Sometimes they're good. Sometimes they're bad. Sometimes they work. Sometimes they don't, but they're incentives to, um, drive.

drive a habit. they're the same way that you bonus employees. Maybe you give your plumbers a bonus when they show up on time to work seven days or a month in a row. You know, it's an incentive because it drives profitability and the company is just, or the country is just a big business. Correct. So that excites me from my personal standpoint, because as I buy more property, that means I pay less taxes. But people are like, that's anti-American, you know, which I would

paying less taxes. Yeah. Yeah. I would say we fought a war over that. I don't think it's anti-American, but anyhow, 2 % tariffs. That's a whole different thing. But it's true though. mean, the beginning of this country was over 2 % tariffs and now people willingly pay 30, 40%. I get that it was more about the representation than the tax itself. It was a lot of political maneuvering that made the 2 % seem a lot worse than it was. Absolutely. But now we pay.

So you pay taxes on the income that you receive, then you pay taxes to go spend the money and then you pay taxes on taxes. Exactly. So, so yeah, I'm, you know, I want to do what the government wants me to do in order to pay less taxes. So how can I help benefit my family, benefit the community and benefit the country and pay less taxes. And it's because the things that they want you to do, like owning real estate,

They provide jobs. They add more money back into the economy by, you know, paying utility companies and construction companies and, all these things that generates. So a hundred thousand dollar per I saw a study and it was like a hundred thousand dollar purchase indirectly contributes to it's somewhere around like 400 jobs. And it sounds crazy because we're like, my property is bringing in a thousand dollars a month. I'm not paying, you know,

that many people, but just even through all the intrinsic things that it has. And so when you're improving a property, you're paying more relative taxes and it has property taxes, that is it has more, more influence. When you talked about money flowing, I saw a video on YouTube a while back of, was a skit, like almost like, ⁓ what's it called? Slapstick ⁓ comedy.

What are they called? Not beavis and butthead. Oh gosh, that's going to bother me. But basically it was like three guys standing in a circle and he was like, you you owe me, you owe me $10. And he's like, Hey, can I borrow $20 from, from this guy? And he's like, yeah, all right. And then he gives the money to this guy and he's like, Oh wait, you owe me $20. then I saw I'll unpack that because there was, I don't know if you're the one that told me this, but there's three stooges. That's all I've seen of. Sorry.

So yeah, there was a guy and hopefully I don't butcher the story, but guy went to the, to the inn, rented a room from the inn for a hundred dollars. Yep. Yep. Yep. He paid the guy a hundred dollars. The inn owner owed a guy a hundred dollars. So he took that a hundred dollars, paid it to that guy. That guy owed another guy a hundred dollars. He paid it to that guy. That guy owed the other guy a hundred dollars and gave it the original guy a hundred dollars.

The guy staying in the The guy staying in the end. And so he gave him his hundred dollars. At the end, right at the end.

who had what money, right? Because the guy basically ended up staying at the end for free and nobody, like the money just moved in circulation. No one became any richer. No one became any poorer. They all just paid down debt. They all just paid down what they owed. And that is how our economy operates. And so I think that's what's so important. That's why I want to highlight that is COVID is a perfect example. Why did we get all these stimulus checks? What does it even mean to have a stimulus check?

It's to stimulate the economy because when people are scared or they're stuck at home, locked away, not allowed to go anywhere, what happens is they just keep their money in their bank account and they don't spend anything. And if I'm sitting at home, keeping my money in my bank account, the person who's working at Amazon doesn't have any money coming in to pay their salaries so that they can pay their bills. And granted, it's all just that, like you said, circulation is

When money stands still, people aren't able to pay their bills, they're not able to spend more money. So I think that's the important thing. I would love to look at an illustration of this or maybe we can find I think that's what Trump's trying to do is he's trying to...

The terrorists are trying to circulate world economy. So I think he's got a multilever thing. He doesn't talk like this, but he's trying to take money from overseas, bring it back to America, increase in our GDP. What I think people don't understand is GDP is gross domestic product. So any dollar that we spend that goes overseas does not affect our GDP. It's gross domestic product. So he's trying to take money from overseas, bring it back stateside.

keep it stateside and increase our GDP, which will in turn circulate more money in America, which will in turn make more tax dollars and all that stuff, help out the economy. it's like... Our entire economy thrives in that. Yeah, there's so much stuff going on. And that's what like, when they started to tariff things, they're like, oh, tariffs and inflationary. Well, here we are six months later and the inflation is lower than it was six months ago.

So like where's the argument there? Well I think one of the arguments is that

The way that they're framing it is that these tariffs are we're taxing China. China's shipping products over here, we're taxing them. When what China is doing is they're just increasing the price of the product or the shipping cost. I look at stuff on Alibaba or at, you know, that's what Tmoo and stuff. I was about to say they really hit those people hard. Yeah. Yeah. And I look at those things and it was like for something I could buy a pack of a thousand for a product for a dollar a piece. It's still a dollar a piece.

They haven't changed the manufacturing costs. The only thing is, whereas it used to cost $15 to ship it, now it's $150. That's the big difference. Because it's like under 50 pounds or something. There's a weight thing or something. And so they tariff that pretty hard. that did. And yeah, that does go to the consumer, which then... Now that was the biggest, I would like to know, $98 million, how much of that came from there? But we're talking about incentives. And when I go and look over there,

and see something that was costing me $1,000 per pack to ship that I'm paying now, $1,000 plus $15 in shipping. Now I'm paying $1,000 plus $150 in shipping. It's incentivizing me to find ways to make it here. And if I can make it here for $1,100 and that's relative cost to what it does cost me now plus shipping, it brings more money into our country.

That's, think the whole point is how do we circulate the GDP? How do we circulate America's domestic product? Yeah. And keep more employment here. And that's the biggest thing. Not only is it circulate the economy and keep things going, but it creates jobs. And ultimately that I think raises everybody's ⁓ level of living, the cost or the living standard, whatever you want to word it. It's, it's almost like standard of living.

With seven kids, if I paid each of my kids a dollar a week for chores, and that's what I could afford was $7 a week, and I go and take some of that money, build a product, sell it to my neighbor, called a lemonade stand, and they pay me $10, I can take that $10 and now pay my kids $2 a week and I have $3 left over.

because now I have more money circulating my house because I sold something external. So that's all it's doing. And by going to Germany and saying, you know, I want Chevy's on your roads. I want Ford's on your roads is they're, they're, they're convincing these companies to buy American made products so that the money that they earned and created is now being circulated in our country versus theirs. Exactly. And it's again, strengthens the power of the dollar. So,

The other thing that we hadn't talked about is probably the thing I'm most excited about from a real estate standpoint on top of the, the bonus depreciation, but

think it might've been this week or this weekend or something like that, but Trump put out a true social tweet, whatever you call it, about how American interest rate, the Fed rate should be somewhere between one and 2%. Right now we're at 4.5%. So he's talking about we should be 3 % lower. Basically he's saying that the Fed has artificially raised it 3%.

And so I forgot Sweden or something like that, Norway, some country over there, they have a sub 1%. There's some countries that have a negative. I don't know if there is right now. I think this was the lowest main one, but it was sub 1%, whatever it was, but I mean, basically zero at that point in time. me, if we get there, which I don't know if we ever will, like you're talking 4 %

interest rates to buy a house, four and a half to five and a half percent on investment properties. That will stimulate the economy tremendously. People will start buying, you'll start seeing properties move again. But it's a tug and pull. That's basically all that they're doing is they raise interest rates to slow down how fast people are spending money because they don't want hyperinflation.

the hype when you have extremely low interest rates for too long of a period, the inflation goes crazy because there's more money supply and goods and materials start costing much more. So then they raise the interest rates. They slow the money supplies to keep the costs lower. I would argue that the interest rates is a lever to slow inflation, but it's not the cause of inflation. Yeah, it's correct.

Yeah. So the, the, the inflation is, happening on its own and they want to maintain. does the government want inflation? Like the government didn't want inflation. They could stop it today. So they want inflation because it incentivizes people to continue investing money. And so if I don't think so, well, so for example, that's why they want it is what I mean. Well, for example, if you buy a piece of real estate and there's no inflation,

that property in 30 years is going to be worth just as much as it is today with zero inflation. That's the benefit of ownership based on it, but I don't think that's the government's reason for it. I think that that's the feds. The fed is not the government, right? They're a private institution. I think they're all in bed together. Oh, naturally. But, with, if you had a piece of real estate that you knew in 30 years was going to be worth the exact same amount, would you buy it? Absolutely not.

You would if that was the norm because you get loan pay down. Right. But if it was worth the exact same amount, it wouldn't be worth the risk. Right. The only reason that it's worth the risk is because it is an appreciating asset because it's anti it beats inflation. Exactly. So the appreciation. does the government the government doesn't care if your property appreciates a lot. Why is the government won inflation? Well, whole thing that we talked about with with.

the incentives that they put in place is they incentivize business ownership and real estate ownership. And so if there is inflation, then it gets people to continue investing money rather than save it. Because if right now invested in something else, put in a savings account, you have a savings account that's earning 0.0025 % interest. If that is beating the rate that I expect my property to appreciate, it's a smarter investment for me just keep it in my savings. Well, I would say that you still get a loan pay down and rent cashflow.

So that's not, you would still be interest rates. I guess what I'm getting at is the reason that government wants inflation is because if they borrow a billion dollars and there's 3 % inflation five years from now, that billion dollars is worth less than five years from now. by doing that, they're paying.

They're paying back money yesterday with today's dollars, which is cheaper. Which is how bonds So that's how they stay. That's how our debt, national debt, that's how come they're not worried about it. Because yes, it's going up, but as long as it's going up less than inflation, which I don't know if it is or isn't right now, but they're fine. if the national debt is going up two and a half percent a year.

and are paying a percent and a half on a trillion dollar debt, it's still cheaper money. Right. Exactly. And, that's part of them looking at the earn or the, ⁓ was it the jobs report looking at unemployment, the GDP, you know, the looking into all those things and that's how they track it. But inflation or the, the fed rate increases and decreases is a reactionary measure. It's a lagging measure or lagging action to

tracking inflation because like you said, they don't move inflation. They just adjust the rate to try and make inflation go up or down. Yeah. Or they can just try up the supply. You know, I mean, they really wanted to, COVID, they put however much money, know, the M2 went up however much percent for causing all the inflation, all the money supply that they put in. They wanted to, they could just take all that. Hey,

We're taking a trillion dollars out of circulation next week. That would stop inflation, but they don't want that. they hurt the, well, I mean, they're hurting the government too. that's Trump's, I think one of Trump's things is we're paying taxes or we're paying China or whomever buys our debt back based off of our federal rate. So we're actually charging ourselves more money to.

payback debt right now. the same thing is true at the micro consumer level is when you have a credit card and the interest rate is 15%, you're going to use a little more sparingly. But when that interest rate drops to 3%, you're buying a boat, you're buying a new car, you're upgrading your house, and that puts a lot more money into circulation because you're using tomorrow's dollar to pay for that. Every time you use a credit card, you're using tomorrow's dollar to pay for something today.

That's my philosophy. if tomorrow's dollar is worth more than today's dollar, then it makes sense to do that. But if it's not, then it makes more sense to save your money. Yeah. Cause I look at anything basically below 5 % or below. It's like free money. I mean, right, wrong or indifferent, but that's kind of my philosophy on it. Yeah, absolutely. So what do you think? Do you think we'll get back to say one and a half percent? No, right. For fed rate. No, I don't, I don't think, I don't think we'll see that in our lifetime.

In our lifetime. I don't think so. I mean, the way I see it going, the interest rates are going to stabilize around that five and a half percent, maybe six percent mark, and that's going to become the new norm until the... When you say... It's been picky here. You're talking about private home ownership versus investment properties are two different things. Investment properties are a little bit higher. So when you say...

Five, six percent. You tell them up or if I want to buy a new home. Yeah, I'd say for buying a new home somewhere in that, that 5 % mark and for investment properties, it's going to be 75 to a hundred basis points above that, which means that the fed rate is going to be about three for be two at 5 % be two. Yeah. So, um,

investment properties are typically depending on where the market's at between 250 and 300 basis points. So for homeownership, it's slightly below that. So I think that's going to become the new norm for a while. just for reference, mean, you can speculate where home prices or home interest rates would be based off the Fed, but it's not tied to the Fed. Investment properties are tied a lot closer to the Fed than

Yeah, just as a general rule, just general rule. And in a more specific sense, it has to do with what mortgage backed securities are trading at based on alternative investments, right? Like if someone's going to buy mortgage backed securities versus bonds, then they need, there's a risk premium associated with that. And that's like we were talking about is if it makes more sense to put money in a savings account than it does to buy a piece of real estate, that's how big investors, institutional investors are looking at.

government issued bonds versus mortgage backed securities. And if that risk premium makes sense based on the alternative. if the government bonds are the risk free premium, right? Right. And the risk free premium, meaning I can buy this with zero risk to me. And you get tax on selling. Right. Then that's 4 % in order for me to buy mortgage backed securities.

it needs to give me at least 1 % above what my risk free premium rate is or whatever. And, and we're talking about smaller spreads or smaller premiums for larger amounts of money. Like if I'm moving a hundred thousand dollars, then I probably want my, my risk to be 3%. Like I'm going to buy an investment property if I can get 3 % above what bonds can get me. But if I'm moving a hundred million dollars, 1 % is adequate. Yeah. So interesting enough.

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bought the new plumbing company. And when I got it, we got a money market account associated with it. So money market is based off from the federate, the body call, you know, like federates four and a half, your money markets could be about four and a half. So it just so happened this was the first month of having this money market. so instead of having everything sitting in a checking account,

I just would move it to the money market account and just kind of keep it in circulation, you know, with my own stuff. So I got paid the interest today. I was like, I got $300 like just by a couple clicks of a mouse. But that's a very micro level of moving stuff around risk free and, ⁓ you know, getting a little bit of money based off from it. So it's nice though.

Yeah. mean, now I pay taxes on $100 total different, ⁓ Bolo wax, but yeah, it's.

How can you keep your money moving around? How can you watch the news without being obsessive? Yeah. And that's what like, I think a lot of times like people start letting the political side come into play versus how does this affect me? Like I try to look at it from an economic standpoint because that's kind of where my brains. the wealthiest people, they, they, it's not that they don't care about politics, but it doesn't matter. It doesn't matter as much when you, when you have a significant amount of wealth.

the, they look at more, where do I need to shift my investments based on who's in office? Yeah. I should make a GPT that just gives me the news like the daily. Objectively. Yeah. No fear mongering. Just search all these sites out there. There's 10 different sites. There's one I saw. I'm going have to find it and show it you, but it's, it's a newer app. And what it does is it takes any topic that you might think of. And it could be,

a tragedy that happened. could be economic sports, whatever, and it'll show you side by side. Here's what CNN is saying about it. Here's what Fox is saying about it. Here's what Newsmax is saying about it. And you can watch the headlines for each topic. See, I don't even want that. I just wanted to tell me just blend it all. Give me a nine bias report because if I see that I'm like, I know CNN's here. I know Fox is here. I know New Mac Newsmax is here. I know Wall Street Journal's here. Like

then I'll start putting my own personal biases on it versus just give me the, the nine biased total ⁓ picture of it, if you will. I like the idea of seeing them side by side. Cause you want to relate my own opinion. Yeah. You like being a spun up. Yeah. Yeah, exactly. But, ⁓ so she said you roughly see it around two and a half, 3 % interest rates. Why do you say that?

Fed rate. Yeah, sorry. Just based on, on like we said, how the adjusting adjustment fed rate is a reactionary measure. And I couldn't give statistical, you know, reasoning as to why I think that is, but just seeing how they've made the adjustments and they say, Oh, we're going to do another fed cut or we're going to do another hike. And then they do the opposite and how much song and dance there is to it. I just think the most plausible,

interest rate for the amount of growth that they want. like, like we talked about with the balancing, they're trying to balance it and maybe they have ulterior motives, but we can go down that conspiracy rabbit hole another day, finding a place where our economy is most balanced and less volatile. If they drop the interest rate, the fed rate down to sub 1 % spending increases significantly. Our inflation goes back up to 11, 12 % like we saw post COVID and they don't want that.

But if they keep the fed rate at five and a half, 6 % money stops too quickly. And so where do I see the happy medium is somewhere in that, that, you know, two to 3 % fed rate range where there's less of this and the waves start coming, making more sense. Now they'll start to see a steady decline or a steady increase. And the time that it takes for that to happen, granted they meet every, what is it 90 days?

I don't think they have a regular meeting, but yes. Well, so if it's every 90 days, whatever, or how often they typically meet, they're, they're trying to judge these macro ⁓ trends on a micro timeline. 90 days is a long time. Yes, but there's a lot of money moving. And so trying to figure out how that money's moving over time. And then they make this adjustment and they see what happens and that's all they can really do. And I think of it in the, in the trucking world. You know what?

what tends to happen when people are trying to back up a big long trailer for the first time. If you ever watch someone do it, not necessarily, but they adjust the wheel and then they start to move and then they adjust it back and then they adjust it back and they're making all these corrections and they're not giving the trailer time to show you what it's trying to do. So what you have to do is make an adjustment, then let it roll 10 or 15 feet and see what it's gonna do. And if you need to adjust, you adjust a little bit. So it's micro adjustments.

And then macro movement. That's what they're, they're doing is they make a micro adjustment, which is maybe a quarter percent, ⁓ change. And then they let it roll for 90 days or 120 days. And then they see what it's going to do and they make another adjustment. And so right now from COVID where money stopped and then they gave out all these stimulus checks, cut the interest rates significantly, which we were already seeing really low interest rates, historically low interest rates.

then they see the money supply start going like this. And then they're like, Oh, wait, wait, wait. It's like, I think of it like a rubber band lasso. They're throwing that rubber band lasso up on it, trying to pull it back so that we don't get into hyperinflation. They pull it back and then they're like, all right, I think we're doing good. Nope, much. And then we got to, so they're just constantly doing this and it drives me nuts. And until we get to the point where it's not going up and down as quickly and it starts to level out.

And then when it starts to level out, then we'll see, it trending downwards consistently or is it trending upwards? And the time that it might take that to happen is 10 years. It could take 10 years for them to get it stable to the point where it's not going drastically back and forth because they keep on going in and manipulating it. You have way more confidence in them than I do. ⁓ Well, I think that they, I think in the terms of the levers is they're pulling these levers, trying to see what's going to happen. And then they let it roll for a while.

And when it gets to the point where we see if it's trending upwards or downwards, like, I mean, we're going to be 10, 15 years into this. Yeah. And then we'll have another post COVID 2008 or what, know, what, we'll have something else that'll put it into another swing and we'll be chasing that tail. And we were long overdue for a recession. mean, and recession isn't this major 2008 and crap 2008 crash. There's been multiple recessions over the previous 20 years from, from COVID or the previous, uh, 75 years.

Talking about from the great depression to the great recession. There's multiple micro recessions. And from 2008, we didn't really have any. think we're going to see them less and less though. And my, my theory behind this is we are now at, we now have more data, more access to knowledge. have more computing power. So we can do, you know, you can run a Monte Carlo scenario on.

all of this really quickly. You know, you're testing 10,000 different scenarios all at once. And you, you take the average of them and say, this is, you what's possibly going to happen. You got your, ⁓ know, your deviation and all that stuff. they're plugging holes, trying to make sure it doesn't happen again. Like 2008 will not happen in the way it did again. Yeah. they plug the holes. I don't think we'll, I'm not saying we will never see another recession. That's not what I'm getting at, but

I think they'll get fewer and fewer and fewer. Right. And, and just like we saw, whereas, you know, prior to 2008, it was every five to seven years. Yeah. Five to seven years that we saw another micro recession or recession. And then 2008, we didn't have another one for 15 years. Well, there's still no one's officially ever said that we've had one. It's a recession. mean, let's call spade a spade. It's, it's, still a recession.

And so 15 years. if this takes five years to clean up and then it's another 18 years before we see the next one, then that's 18 years of them trying to stabilize it, you know, before it darts away from them again. So, so what's your, your hot take? So big, beautiful bill, inflation, interest rates, trying to bring them down.

Where are we at? So like I said, we did this basically six months ago, come Christmas time next year, one first of the year. Where are we six months from now? Where, where do we, are you bullish on buying stuff? know, not yet. Um, I think six months ago, I'd love to rewatch that episode before, you know, we talk about the next one at the one year mark. I had thought that we would see major.

fire sales going on, which we have seen an increase in sales. Mostly in the larger. Right. In larger purchases because most commercial, well, most, if I think there was like 85 or 90 % of the commercial market refinance their debt between 2018 and 2020, those are typically on five, sometimes seven year notes at the highest 10 year notes and they balloon. So 2019, that would have come to fruition at end of 2024.

What we didn't expect or what I didn't expect is that all these banks would give extensions because they don't want all their debt coming due all at once. So they give a one year extension. They give an 18 month extension. They, they're just hoping to kick the can long enough so that things start to make sense again. Yeah. Cause they're still using.

Theory behind it, why a bank wouldn't want to do that is because we gave you 3%. Today we can get 7%. Which will meet debt service and you'll have delinquent loans. Well yeah, but from a bank standpoint, you would want to, in theory, want to ⁓ get the 7 % if you can. They realized that they can't get it because, say you bought the property for $10 million, it might only be worth eight, or it might only cash flow at $8 million.

And people aren't going to want to, for one, the sellers aren't going to, they don't want to sell. And if the bank's going to work with them, they're not going to sell. But they would rather take the loss than lose money in being locked in for another five years. Right. And in a simple sense, yes, they would want to lend the money that's currently at four and a half percent, lend it out at 7%. Like, yeah, it's 3 % difference. That makes sense. Or 2.5 % difference.

But they can't because it won't meet that service. Like you said, yeah, it meet the debt service. won't mean the loan to value requirements. So, so what they're gonna have a race 50%. Right. And then that will start to affect their, their individual banks because if they have, let's, let's say 50 % of their loans are coming to maturity and they all are in that same boat where they can't meet debt service at a 7%, then those

those owners either have to inject more cash, which the investor markets dried up because there's uncertainty in the markets. They're not able to raise more capital to inject into these properties. So then they're left with fire selling it, which is just going to wash away equity. And then a lot of banks aren't going to be able to recoup their entire investment. they're still going to make less money relative to have a property that have a loan for $10 million at 4 % interest rate. And they have to fire sell it at 7

million dollars or six and a half million dollars. And now I'm getting 7%. Like my upside isn't very high for the bank. just put a new, a lot of times these, uh, investors are doing well. Like these are all things outside of their control. So now you're, you're increasing your risk as a bank. Cause now you're putting a new investor in charge of a property. These people didn't do anything necessarily. It's just the economy that changed. And so why

why increase your risk putting somebody else in the seat when these other people theoretically didn't do anything wrong. it just, mean, people get paid well to make these decisions. it's a lot of moving parts. That's why I really hate politics. I'll rephrase that. That's why I really hate Facebook politics is because everybody tries to look at it from a simplistic.

Well, that sounds good or this doesn't sound good, but you don't look at the whole area around it. but, ⁓ yeah. What else got anything else economy wise that you think is going to, I think right now there's a lot of people that are shifting to the sidelines. They're sitting on cash expecting, I don't say bubble to burst, but expecting things to start getting fires, ⁓ to fire cell and they can get them in at a discount.

And so with the, investment market, having a lot of cash on the sidelines and maybe they're just putting it into safe things like bonds or, ⁓ like we talked about S and P, they're just sitting on that cash waiting for something to happen. And I don't, I don't think we're going to see it this calendar year. Maybe spring 2026, we'll start to see some shift when these banks can't keep kicking the can, you know, 12 months on these delinquent loans. ⁓

But we've seen the impact it's had on office market. Like the office properties have been, since COVID, they were as low as some markets in 50 or 60 % occupancy across the market. That's starting to come back. A lot of companies have done away with the teleworking. You saw a lot of people that were teleworking for multiple companies. That's unheard of in our history. To have three jobs where you're teleworking from all three, and then they go move to a rural area, these Silicon Valley.

people were moving to the Midwest to have a lower cost of living and still work three jobs paying Silicon Valley salaries. Like that's, that's insane. Isn't it insane or is it smart? It's smart. Yeah. Insane that we see it in the marketplace. And so now people are being required to come back into the workforce and which is contributing to unemployment rising because people don't want to go back to work. it's interesting how, but I think like we said, just

push that trailer 10, 15 feet. It's going to be probably 20, 26 before we really start to see the impacts post COVID of us getting back into something that makes sense. It makes sense, not even in a good way, but makes sense. Like we can see a downward trend or a positive trend. Right now there's too much back and forth. Yeah. I'm really excited for 2020. ⁓ I don't think we'll see much. I think the way it is now is how we'll see it for the rest of the year. Yeah. mean, yes.

kind of make a political statement here. I don't think, I think Trump has pissed off Powell so much. He's not going to do much. He's not going to try to help. He would rather hurt the economy than help Trump. Right. I mean, that's just my opinion. I don't know the guy. I've never met him. And I mean, it's politics too. is like you look at the, the, the Congress, not even politics, it's just psychology. Well, Congress does this all the time and they did it in his first presidency that

They would rather shoot down a bill that helps people because they don't want that success tied to Trump's name. I mean, yeah. Like, I have your prime example is that

Somewhere around October to December timeframe when the Democrats were still in power. ⁓ They did the continued resolution and no Republicans voted for it. Then whatever it was, March or whatever, when Trump and the Republicans are in charge, it was the same continuing resolution. No Democrats voted for it. And all the Republican are, most of the Republicans voted for it. It was the same bill, the same everything.

And it just flipped off the roles because no one wants to vote for the other party. So I don't think we're going to solve that problem in this podcast. So, no, but I'm just using that as an example. Like, you can like, this is why I hate politics. If you will, like they're all lying. That's my hot take to let us get to work. I'm getting some politicians on this podcast. So,

I'm game. So I just like a lot of things. So I'll argue with everybody. Well, look forward to referencing this back and maybe putting some clips of our probably should have watched the other one before, we'll watch them both before the December podcast. Well, look forward in six months to doing this again. All right. Let's wrap.