Holistic Survival
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Holistic Survival #8 – What the Future Holds

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The purpose of trend forecasting is to provide insights and directions in anticipation of what the future may bring, and to be prepared for the unexpected. Gerald Celente, founder of The Trends Research Institute and author of the national bestseller Trends 2000: How to Prepare for and Profit from the Changes of the 21st Century, understands the importance of proacting rather than reacting: “The first rule of Close Combat is to attack the attacker. Visit http://www.holisticsurvival.com/podcast-with-holistic-survival.php. Action is faster than reaction. The same holds true for the future. You know the future is coming…attack it before it attacks you.” Tune in to this episode of The Holistic Survival Show to discover the upcoming trends and the tools needed to make profitable business, career, or personal decisions for your future!’’

Narrator: Welcome to the Holistic Survival Show with Jason Hartman. The economic storm brewing around the world is set to spill into all aspects of our lives. Are you prepared? Where are you going to turn for the critical life skills necessary to survive and prosper? The Holistic Survival Show is your family’s insurance for a better life. Jason will teach you to think independently, how to understand threats, and how to create the ultimate action plan. Sudden change or worst case scenario, you’ll be ready. Welcome to Holistic Survival, your key resource for protecting the people, places, and profits you care about in uncertain times. Ladies and gentlemen, your host, Jason Hartman.

Jason Hartman: Welcome to Holistic Survival show number 8. I’m your host Jason Hartman. Thanks for joining us today. We are going to do something a little different today. We’re going to have a prediction person on and he’s quite well known, quite famous. His name is Gerald Celente. You’ve probably heard of him. And what makes this interview kind of interesting is that we recorded it quite a few months ago. Actually I think it’s about 8 or 9 months old. So you’re going to have a chance to gauge some of the accuracy of some of his predictions. We’ll let you listen into that. I also want to mention, the show of course is all about protecting people, places and profits. And if you want to know more about the profit side of life, our other show, our sister show, the Creating Wealth podcast, is very renowned, very famous show, and you can find out more about that at JasonHartman.com and get involved in some of the coaching programs, the live events that that my other company, Platinum Properties Investor Network offers, and we have one of our signature events coming up on October 10th and 11th which is called the masters weekend. We only do that twice a year and we’d love to have you join us for that and if you require any coaching as far as the financial side of things, inquire about our coaching program, our property investments, so on and so forth. And that’s the Creating Wealth podcast. You can find it by looking up my name, Jason Hartman, at the ITunes store or going to JasonHartman.com and that’s all completely free. So join us for that if you’re interested in protecting the profits, the money side of life. Okay, let’s go to the interview with Gerald Celente. And again, this is a little bit older so it will be kind of more interesting that way and he’s gonna talk to you about commercial real estate which we are very bearish on by the way. Still pretty bullish on housing as long as it’s in the right markets, but commercial real estate is just going into its tough time. And Gerald will talk about that on the show and many other predictions as well. So let’s listen into the interview with Trends Research forecaster Gerald Celente.

Jason Hartman: It’s my pleasure to welcome Gerald Celente of TrendsResearch.com. Gerald, welcome to the show.

Gerald Celente: Hey, thanks for having me.

Jason Hartman: Good to have you on. Tell us what you’re forecasting for the economy. I love your work and just want to hear more.

Gerald Celente: Well in 2007 we had predicted the panic of ’08. As a matter of fact, we took the domain name out on November 7th of 2007 of thepanicof08.com. And now we’re saying that we’re going to go into the greatest depression and it’s just beginning. So 2009 is going to be the awakening. Reality is going to set in really, really strong. You go back during 2008, for over half a year it was a question among the major media and between the two presidential candidates whether or not we were going into recession and now it’s very clear that we are.

Jason Hartman: They kept focusing on the ridiculous academic definition which isn’t adjusted for inflation. And of course we’re in a recession. I mean we’ve been in one for about a year and a half if you ask me.

Gerald Celente: Yeah, I agree. And matter of fact, we said we were in recession in 2007 by the second half. And we look the real world. And in the real world, as you well know, median household income is below 1999 levels. Wages are not keeping up with inflation. People are working longer and harder and having more difficulty making ends meet. So yeah, we’re in a recessionary cycle that we believe is going to devolve into a depressionary cycle. And I’ll tell you why we’re saying this is the greatest depression and why it will be worse than the one that everyone refers to in the 1930s. Back then most people, as you well know, didn’t own homes. And those that did, didn’t have what they call home equity homes, and back then they’re called second mortgages. If you had a second mortgage back then, you were considered a loser. Back then, people didn’t have credit cards. Those are a relatively new invention over the last about 40 or 50 years. And back then people weren’t holding 14 trillion dollars plus worth of private debt, personal debt.

Jason Hartman: Debt has certainly become fashionable, hasn’t it?

Gerald Celente: Yeah. And back then we had trade surpluses. We had a $700 billion about trade deficit this year. And it’s been registered that continually in those numbers. Back then we had budget surpluses. Now we’re $11.5 trillion in the hole and it might get worse because they’ve taken on the debt of Fannie Maye, Freddie Mac, AIG, and who knows how many other banks that they won’t tell us, who they’re giving money to and who they’re buying. And back then we weren’t fighting two wars that have cost over $2 trillion and keep bumping money into them. And back then, people didn’t see their life savings evaporate with their IRAs and their 401K.

Jason Hartman: And back then people actually had more savings as a percentage of income I would assume than today.

Gerald Celente: Oh, much higher. I would venture to say it was probably in the 7th percentile and that’s just a guess. But I mean that’s what it was even during the 70s. So we’re going into the downturn at a very, very difficult time. And there’s no amount of fiscal or monetary stimulus or packages that anybody’s going to event that’s going to get us out of it.

Jason Hartman: So you mean Bernanke, Paulson, and Obama can’t save us?

Gerald Celente: Well, you know, it’s interesting how we needed that $700 billion bailout bill because if we didn’t, the world would come to an end. And now they’re saying, as the treasuries are, Paulson is saying “Well we’re not gonna use that $700 billion the way we said we were. We’re gonna use it differently.” Well wait a minute, if you’re gonna use it differently, then the way you said you were gonna use it to save it, that was a lie or you were wrong?

Jason Hartman: Of course it’s a lie. That’s what they do there, you know?

Gerald Celente: Well, look. I look at both the Democrats and Republicans. I’m a political atheist. I don’t believe in fairy tales.

Jason Hartman: Yeah.

Gerald Celente: And I look at both of them as criminal organizations and I’ll tell you why. It’s not an inflammatory statement. It’s a moral one. We’re fighting wars in foreign countries for fake reasons. And the reasons we’re in Iraq, Saddam Husain was supposed to have had weapons of mass destruction and ties to Al Qaeda. And both of those are false. Whether they’re intentionally false or manipulated false makes no difference. They’re false. So fighting those wars and killing innocent people to me is an immoral act. They’re robbing us blind in broad daylight with these bailouts, rescue plans, and giving money to their friends. That’s thievery. So I’m against these acts. They’re against my moral principles. So that’s why I say that they’re criminal organizations.

Jason Hartman: Yeah.

Gerald Celente: And don’t forget to include Wall Street in there as a criminal organization.

Jason Hartman: Well it’s the Wall Street mob that’s running DC.

Gerald Celente: Right.

Jason Hartman: And you have the different members of the families. And now you have the Goldman Sachs mob in DC. You have the Morgan Stanley mobs in New York and you go around the country. So that’s all it is. The mob is control. Hey, before we leave the whole subject of Bernanke and Paulson and Wall Street, everybody is accusing Paulson and I don’t disagree with it, but I just wanted to know if there was a specific of lining the pockets of his old buddies that he worked with at Goldman Sachs, how is he enriching himself from this bailout? Certainly he’s a powerful person. He’s like a financial czar if he’s got all that money to dole out.

Gerald Celente: Well I think there have been reports out on what his stake in Goldman is or was. It’s like saying, I love the term, how the liberals, of course I’m no Bush fan either, as I mentioned, I’m a political atheist, how they went after Cheney for having ties with Halliburton. And what’s the difference here? And then we look at the Obama time that he went to for the first advice following his election, and who did he bring in? Robert Reuben and Larry Summers, the chief architects who went with Graham from the Republican end of the destruction of the Glass-Steagall Act, which was put in place. It was a depression era piece of legislation to prevent the banks from becoming banksters.

Jason Hartman: And that’s what formed the FDIC Glass-Steagall, right?

Gerald Celente: I’m not sure.

Jason Hartman: Yeah, I think the FDIC was like a big part of that act if I’m not mistaken. But could be. Anyway, go ahead.

Gerald Celente: So anyway, so when they talk about change, how about no change? So it’s the same group in there. And as we’d know, as Robert Reuben left the Clinton administration, he then got a plump position with Citigroup, which was created as a result of the breaking up of the Glass-Steagall act that allowed banks to get into the brokerage and insurance business and other businesses that they were previously not allowed to get into. So this whole thing’s really started unraveling under the Carter administration. Because if most people remember, if they’re old enough, there was only intrastate banking, there was no interstate banking. And that’s what kept the banks from expanding and become too big to fail. And as we see it now with the government now in control of the world’s largest insurance company and control of the world’s largest mortgage company, buying up banks and now talking about buying up a good chunk or loaning money to the biggest auto companies. You know, you could call this communism in the sense of the state controlled monopolies or you could call it fascism or you could call it socialism. But the one thing you cannot call it is free enterprise. And you can’t call it democracy because the people have no say in it and the majority of the polls are showing the people being against it and particularly in the congressional districts where people had registered 500 to 1 complaints about the bailouts.

Jason Hartman: So what do we do about it? I mean obviously Washington is completely detached from the citizens. I mean there are so many things of concern with the government, you know, these national ID and I see Bill Gross last week of Pimco, okay, and asked him about this consolidation that’s going on in the banks and he actually was saying that we’ll probably consolidate down to really 50 or so large banks. What do we have? Like 8000 now. They say there will be about 3000 in just a couple of years as failures and consolidations continue. And what the regulars want to do is consolidate it even more, which to me is disconcerting. I mean you’ve got less choice, you’ve got more control of the money supply by the federal reserve and the government and all of this stuff. I mean the government is just becoming too intrusive. It’s a concern.

Gerald Celente: I think disconcerting is too mild a word. Because I said you could cause socialism, fascism, and communism. You can’t cause free enterprise.

Jason Hartman: Yeah.

Gerald Celente: And what they’re doing is they’re creating giants that are too big to fall and so we all become servants to the giants. And that’s what’s going on over here right in front of our eyes. The levels of hypocrisy are beyond anything that anyone’s ever seen before. And again, the general public is against it. They don’t understand it in totality, but they feel it’s not right. And so as it continues to go, I agree we’re going to see less and less banks. Look, there was the New York Times report of listening in on a JP Morgan Chase conference call following the gift of $25 billion dollars to them of our taxpayer money, and it was extensively going to be used to buy up toxic debt and it didn’t. They said in the conference call that they were gonna use it to buy up weak or financial institutions. So they’re telling us in black and white and anyone that wants to listen to it could hear it. So that’s what’s going on here.

Jason Hartman: And now you’ve got the big 3 from Detroit on Capitol Hill today and they’ve got their hand out. The government, what are they gonna do? Be in every business now?

Gerald Celente: Well that’s what we’re saying is that we’re looking at something here that is entirely out of context with the basic fundamentals of who we are as a country, and more than that, the levels of hypocrisy, because these are the same people out there that lecture each one of us little people to be responsible and slap us down and beat us around when we’re not. Yet they do what they want to do to bail out their buddies. Here’s a trend. We’re looking at a revolution in this country, because what’s going on now is that they’re forcing the little people to pay for the too big to fails at every level. For example, here in New York, Mayor Bloomberg, they want to raise property taxes 7%. Oh brilliant. As people are earning less and losing their job, keep raising property taxes so these bureaucrats can keep working. Oh, and then on top of that, we’re going to put more enforcement offers on the beat. So if you drive your car and you go over that little white line that pedestrians have to walk through, that box over there, you’re blocking the light, then you get a ticket. And then they’re sending more sales tax agents out and shaking down the pizza parlors and every little store or grocery store, whatever, the green grocers, for more tax receipts.

Jason Hartman: I think, Gerald, for years the government has really gone into business against the citizens. All this over controlled parking and is your dog on a leash, and all this stuff seemingly logical and good and we need it for a cooperative society, but every time they pass a new law all they do is find a way to raise revenue. It’s really a tax increase. You know, the parking meters used to, in most cities, not be patrolled after 5pm. And now it’s 7, 8, 9pm. And it’s just more revenue to raise, give out more parking tickets.

Gerald Celente: Exactly. More revenue to raise, keep shaking down the little people. This is a titanic situation. You have Obama on the bow saying yes we can. And you know who the WEs are? The WEs are the people that rode first class, you know, the first class passage on the Titanic. The too big to says are the too big to drown. And the rest of the people, they lock down into steerage and wouldn’t let them out. It’s a metaphor for exactly what’s happening today.

Jason Hartman: So what do we do about it?

Gerald Celente: Well, you know, personally what I’ve done is I don’t have any money in the banks anymore. We only keep the Trends Research Institute’s operating expenses in it, and I take everything out. Because I believe a great probability, since they’re painting Obama as the next FDR that they probably will call a bank holiday following his inauguration or coronation.

Jason Hartman: So what does the bank holiday mean?

Gerald Celente: Well the bank holiday means that…And I love the world they use, holiday, we’re supposed to have a holiday. You know, we’ll take the money is what it means.

Jason Hartman: Right.

Gerald Celente: Yeah, you’ll be able to get your money out, don’t worry. It’s FDIC insured. You just can’t get it out all at once.

Jason Hartman: And the thing, I interviewed Peter Schiff a couple of shows ago on my show and I love what he said. He said yeah, the FDIC insures that you’ll get your money back but they just don’t insure what it’ll actually be worse, in other words in real dollars.

Gerald Celente: Exactly.

Jason Hartman: So they’ll deflate the value of the money.

Gerald Celente: Like they do in Argentina and other under developing nations. So that’s part of it. And also, they may confiscate gold. There’s a lot of talk coming out and they’re just putting the trial balloons out about reestablishing some type of a Bretton Woods Agreement and putting standards back on gold, in which case gold would then have to be worth several thousand dollars an ounce.

Jason Hartman: Didn’t they meet last weekend? I think November 15th there was a meeting on that, the G20 meeting or something.

Gerald Celente: That’s correct.

Jason Hartman: Yeah, tell us about that. What happened there?

Gerald Celente: Well, they don’t’ know. They’re not putting out much information on it and they’re really downplaying it as though nothing happened. And we’re convinced here at the institute that something did happen and they’re not telling us who what it is.

Jason Hartman: But it’s so interesting. I can’t imagine that they would ever want to put us back on the gold standard. I mean fiat money is every central banker in the world, that’s their dream is fiat money.

Gerald Celente: Here’s the thing why we’re still bullish on gold. What are all the countries doing to battle this credit crisis, a downward spiral?

Jason Hartman: Printing more fiat money.

Gerald Celente: How much can you print? When does it become worthless?

Jason Hartman: Well, when the people finally figure out the smoke and mirrors scam, the chicken comes home to roost, and they figure out that their money’s worthless. I guess it’s really like the Weimar Republic. When you take a wheelbarrow of money to go buy a loaf of bread and the wheelbarrow won’t fit through the door you leave it outside to go in and get your bread and someone dumps the money out to run off with the wheelbarrow, you know? That’s when you know that the scam has ended.

Gerald Celente: That’s when you know. That’s a good one. Yep, running down the street with the wheelbarrow. And that’s why we’re bullish on gold, because here’s another fact that’s happening. And as you well know, central banks, and other banks are short in gold, selling gold, particularly on the COMEX there’s reports of banks selling tens and tens of thousand, 20 thousand, hundreds of thousands of shorting gold futures to drive down the price.

Jason Hartman: Right, right. So I wanted to get to that with you. As we talked before, we started recording, Gerald. The gold price is manipulated. See, I agree, as I mentioned before, with the premise of the gold bugs in the sense that fiat money, inflation, blah, blah, blah, all of that is totally accurate and completely true in my opinion. However, you can’t finance it for 30 years. The interest isn’t tax deductible if you could. You can’t rent it to anybody. And it’s manipulated by these central bankers.

Gerald Celente: No question. But here’s the difference. When hyperinflation happens, and we think it’s going to happen if they continue, the only response that they could ever give is to print more money, stimulus package, a work project administration package, whatever it might be it comes out to printing more money. And at some point that money is going to have less and less value. The other point of what I wanted to say about gold, you could go to any of the major websites that sell gold and you’ll see the same thing on all of them. Due to the high demand and shortage of product, it will take several weeks before we can send you the physical project.

Jason Hartman: Well it’s not just that. The premiums are so much higher. The spot price may be $710 or whatever it is, but the premium went a year ago from like $30 an ounce to $110 an ounce.

Gerald Celente: And there’s a shortage of product.

Jason Hartman: Which makes me thinks COMEX is gonna start defaulting because if you want to take…

Gerald Celente: A lot of talk about that as well, that COMEX is saying that they won’t deliver unless it’s an economic necessity. This is what I’ve heard. I don’t know it as a fact.

Jason Hartman: Right, yeah. I’ve heard that too. I talked to a commodities broker yesterday in Chicago who was on another show. I heard him talking, so I called him up. And he knows how you can take delivery from COMEX and they make it very difficult. They make it rather easy though to take delivery and leave it in their warehouse. How convenient. But see, if you really want to see that stuff and get your hands on it, it is really difficult to do, unless you live in New York right near the exchange, then it’s probably fairly easy, but if you’re like me in California, you can’t get it. It’s just really hard.

Gerald Celente: Years ago, I had taken delivery and it was very easy. And now of course the game has changed. So what we’re saying is there’s a shortage of product out there. And particularly, people around the world who have gone through these kinds of scenarios before know that gold is gold and when paper money isn’t worth anything. Now to address the other issue about interest and not getting a product, right now the strategy is not risk. It’s capital preservation. And gold is looked upon by many as preserving capital, not necessarily looking at it as an investment to make money, but to keep the value of what you have as the value of what you have continues to decline dramatically. We don’t give investment advice. But I can tell you what people that I know, what they’re doing. They’re putting assets in gold. They’re putting assets in euros even though the dollar’s beating it now. They’re putting assets in Swiss francs. And what they’re doing is they’re hedging that if one goes up, the other goes down. At least they have some type of a parity. And that’s what the game is now, wealth preservation.

Jason Hartman: Yeah, it’s a defensive posture. No question about that, I agree with you. But talk to me about the gold price manipulation. See, I agree that you can’t manipulate anything forever. But I interviewed Ellen Brown on a prior show, author of web of debt. You probably know her. And she talked about how the 300 year Ponzi scheme of central banking is coming to an end. And it seems like it is. But it’s like the people on Wall Street that say buy a stupid mutual fund and invest for the long term. Well, I agree with value investing. I mean I agree with sort of the Buffett style of investing, you know, long term, not instant gratification type thing. But the question is how long can we all wait? Can they manipulate the price of those precious metals for another 10, 20, 30, 40, 50 years?

Gerald Celente: I think the string is running out and that’s why we’re saying there’s gonna be the greatest depression in 2009. It’s gonna be really people are gonna start to feel it. Of course they’re not going to call it that, just like they’re not calling the recession a recession.

Jason Hartman: Well, they’ll probably call it a correction.

Gerald Celente: Yeah, or either how many times the market bottom out as well. The market’s capitulated, it’s a good time to buy. How many times have I heard that one?

Jason Hartman: Oh, I’ve been hearing that like forever. I heard that when the DOW was 9700.

Gerald Celente: So in talking about the long term investment, let’s put some reality on to the picture. Remember when the .com bubble burst in 2000?

Jason Hartman: Mhm.

Gerald Celente: And by the way, we had predicted in our Trends Journal in October of 1999 that the .com bubble would burst by the second quarter of 2000.

Jason Hartman: Right on the money.

Gerald Celente: And we knew it because of all of the talk about e-commerce and we looked at Christmas sales results and saw how minimal they were regarding internet purchasing, so we knew the thing was gonna end, that was gonna be the wakeup call. Although the reality had set in before, the wakeup call has to hit people hard in the head before they realize it. So let’s now go back to 2000. The NASDAQ was the DOW, was the 1920s. It was the 1929 DOW. In the 1920s, it was railroads and radio and real estate. In 2000 it was technology. When it peaked, it peaked at 5000, the NASDAQ. What’s the NASDAQ worth today?

Jason Hartman: Well, the NASDAQ today, let me see. I got the DOW up here. I don’t have NASDAQ. DOW’s 8424. Oh, there’s the NASDAQ, 1483.

Gerald Celente: Yeah. Long haul investing?

Jason Hartman: Yeah. Right.

Gerald Celente: For how long? How many lifetimes? Really, how many lifetimes? This is gonna be great for people when the people are believing in reincarnation. I remember it was a lifetime. I mean come on, this thing is even happening. So the whole system is breaking down. And what people need to realize we believe in our forecast, that what’s going on in the financial markets is a symptom of a much greater trend.

Jason Hartman: Which is?

Gerald Celente: The decline of empire America.

Jason Hartman: Yes. The empire is trying to set up a territory in the Middle East right now and it seems to be a rather bit of a struggle I’d say.

Gerald Celente: You know, I do a lot of media and I was on a station in the UK yesterday, and I said to the fellow basically the same thing, but I went with an opening with it. I said you’ll be able to understand what I’m saying very clearly. I said just like what happened to England, the same thing is happening in America. It’s the end of the empire. And for the same reasons that you guys went under, we’re going under. It’s called imperial overreach. Imperial overreach doesn’t only mean it in a military sense. There are many other factors that make it happen.

Jason Hartman: Yeah, at home too. I mean we’re overreaching at home. The empire is getting into everything here.

Gerald Celente: Exactly.

Jason Hartman: And abroad. We’ve got military bases in 130 countries. I mean they ought to just call Earth America, you know? It’s unbelievable the reach of this country. And it needs to become a little more isolationist in my view.

Gerald Celente: Well I wouldn’t call it isolationist. I would go back to the fundamentals of what the country was built upon. How about let’s listen to Washington about not getting involved in foreign.

Jason Hartman: Avoid foreign entanglements, yeah.

Gerald Celente: Can’t be clearer than that.

Jason Hartman: Right.

Gerald Celente: I mean if Washington knew what they did to his name by calling it Washington, he’d be turning in his grave.

Jason Hartman: That’s for sure. All of those founding fathers led.

Gerald Celente: Washington is a far cry from what Washington believed in. So anyway, I’m joking in one sense, but in another I’m really not. This is the end of the empire and it’s only beginning.

Jason Hartman: Well tell us, number 1, how 2009 is going to look. You say that we’ll have a depression. There’s no academic definition for depression like there is recession. Do you have a definition?

Gerald Celente: Well, again, the academic definition, it’s like going to college to learn about economics.

Jason Hartman: Sure.

Gerald Celente: When in the real world, economics is what you face every day and learn about it on a day to day basis. So yeah, we’re going to see violent crime to levels that we’ve never seen before. It’s gonna look a lot like Mexico City and New York City.

Jason Hartman: But that’s really violent property crime, but for the gain of property, right?

Gerald Celente: Property crime and violent crime, robberies, muggings. You know, it’s a lot worse than the past because now you have people whacked out on crystal meth and a variety of prescription drugs that never existed before. So you get somebody that’s out of their mind and desperate. I practice close combat martial arts, and I’ve been for over 25 years. And one of the first things my teacher taught me, John Perkins, AttackProof.com is his website if anybody wants to see what this stuff is about, is don’t go into redneck bars. That’s the first line of self-defense. In other words, you stay away from people who you know you’re gonna have a problem with trying to talk reason to. See, you don’t talk reason to anybody that’s whacked out in their minds to begin with and now they’re drugged out on top of it. And we’re gonna see more and more of that. We’re gonna see violence to levels that we’ve never seen before. By the way, in 2009, the next shoe to drop is gonna be the commercial real estate sector. Now you’re a real estate expert.

Jason Hartman: Yeah. And we do commercial as well. Now when you say that, though, I want you to define it. What type of commercial do you mean? Do you mean office space, apartment buildings, retail centers? I think retail and office have huge problems. But I’m still fairly bullish on housing as long as it’s in the right market.

Gerald Celente: Well I wouldn’t consider apartments in the commercial sector.

Jason Hartman: Okay, good. That’s residential in your mind.

Gerald Celente: That’s residential and you’re gonna see more rentals as less people could afford to buy.

Jason Hartman: True.

Gerald Celente: And that in theory, but if things get so bad, maybe people won’t be able to afford to rent, and by the way, one of the trends that we’re looking at in 2009 is that McMansions become McBoarding Houses.

Jason Hartman: Oh, I agree with that by the way. We’ve built so many McMansions, and part of the Harry Dent thought is that by 2010, 2012, there’s gonna be just a huge glut of McMansions, and that was before his current thinking on the great depression ahead. I agree with you.

Gerald Celente: So now what we’re gonna look at in the commercial sector, again, current events form future trends. What did Citigroup announce yesterday, gonna lay off 53,000 people?

Jason Hartman: That’s a big layoff. By the way, Gerald, do you know how many employees they have in total?

Gerald Celente: I think 300 and something thousand.

Jason Hartman: So that’s a good portion of their work force.

Gerald Celente: I think about 8% of their work force is being laid off. And now we’re looking at we just saw Circuit City go bankrupt. We saw Linens and Things is going out of business.

Jason Hartman: And there’s no new big box retailer starting up, are there?

Gerald Celente: No. So now we’re gonna start seeing ghost malls start to pop up, because a lot of new malls have been built. You know the deal, the developer goes to the bank and say listen, I’ve got these lease agreements.

Jason Hartman: And the leases are broken. I have friends that are in that sector.

Gerald Celente: The leases are broken.

Jason Hartman: Yeah, they’re pulling out of the deals left and right. Target, yeah. They just overbuild. There’s a total overcapacity.

Gerald Celente: And how long I ask you has this overcapacity been going on?

Jason Hartman: For a good, well you could say 40 years, but you could for sure say 8 years.

Gerald Celente: For sure 8 years. So now you have this dramatic overcapacity, we’re overstored as they used to say. And now you’re seeing people going bankrupt, breaking lease agreements, and also closing stores. So the next level is the commercial real estate sector. 41% of the growth in New York by the way of the last 8 years was in the financial sector.

Jason Hartman: And now we’re seeing the big downsizing of that sector.

Gerald Celente: Exactly. So that’s the next shoe to fall. And as you well know, the commercial sector, and you could please correct me if I’m wrong because this is my thinking and I can be wrong, the commercial sector in terms of dollar volume is much greater than the subprime mortgage area which is what, estimated at a trillion or so?

Jason Hartman: Right. And so you’ve got a much larger…Well, I don’t know. There’s fewer commercial properties, so I really don’t know the answer to that. And I’m not sure.

Gerald Celente: Well when you look at all the malls and all the commercial buildings being put up, I would guestimate well over a trillion dollars, office towers and on and on and on. We’re talking big numbers here. Now having said that, I want to talk about some of the positive things that we see developing.

Jason Hartman: Okay.

Gerald Celente: What’s bad for Wall Street is wonderful for Main Street in the sense that it was Wall Street that created the too big to fails. It was Wall Street that allowed this development process to take place of big box storage and ugly malls that destroyed all the small towns and little cities. Now the trend is changing because the model that development is built upon among the major stores is growth and expansion, which neither is happening. Now it’s retraction. So now they’re losing shareholders, their stocks are declining. After the Christmas vacation, the scenario that we’re building for 2009 is that’s when you’re gonna start feeling the real pain. You’re gonna start seeing a lot of major retailers start to go belly up, because Christmas sales are gonna be a disaster this year.

Jason Hartman: I thought you were giving us some good news?

Gerald Celente: The good news is they’re going to be leaving a lot of gaps. As the big guys fail, gaps are created. And this is going to be a wonderful time for nimble, quick thinking visionary entrepreneurs to fill in the gaps left behind by the too big to fail.

Jason Hartman: And that’s mostly on the retail side? I mean you’re talking retail stores?

Gerald Celente: Retail stores, the retail business, the local businesses. Buy local is gonna become a mantra.

Jason Hartman: Right.

Gerald Celente: The real estate that I happen to like and that I’m in is in the old fashioned small towns that have thrived through a lot of years, not so much because of only the business and industry around them, but because of their location and if they had not been destroyed during the urban development madness that happened I guess about the mid-1960s up until just recently. And I remember hearing Kinston, New York, which was the capital of New York State during the revolution. And we’re placed right off the most historic corner in the United States, the only place where in each corner is a stone building from the 1700s, and the town is virtually intact in the area that we’re in. A couple of mistakes had been made, ripping down beautiful old buildings, but by and large it’s a walking community. You could walk to work, you could walk to shop, and you live where you work.

Jason Hartman: And it doesn’t matter if the gas price goes through the roof too much.

Gerald Celente: Precisely, and then we have mass transportation all around us. So if you want to go to New York City, if you want to go to Albany, anywhere you want to go you have a good shot at getting there. So those are the kind of investment opportunities that we see. And we continue to see those being very profitable in the future. Another thing that this area has around it, it’s perfectly located because there’s an agricultural base near it, very strong academic base. We have Vassar, New Paltz, Marist College, Bard College, all within 20-30 minutes of the area. And so you also had high tech in here as well, not as much as it used to be, used to be a big IBM bastion, but still a lot of high tech in the area. So when you put it all together, those are the kinds of investment opportunities that we like.

Jason Hartman: Well give us some specific predictions on some stuff and let’s talk about population growth as well, population and immigration actually. I mean the experts say within the next 31 to 34 years we’re gonna add another 100 million people in this country. And some say we’re gonna say and we’re really already seeing a little slowdown on Mexican immigration due to the job market being not so hot here. What are some of your predictions as far as the impact of the demographic trends?

Gerald Celente: The demographic trend is gonna be a tricky one to predict, because as the economy declines to the levels that we’re looking at, you’re gonna start seeing much greater levels of plagues, viruses, food scares. There may be a thinning of the population.

Jason Hartman: Really?

Gerald Celente: Yeah. A new black plague.

Jason Hartman: Well what is the plague? The bird flu? I mean that’s…

Gerald Celente: We don’t know what it will be, but when you look at the great plagues that have happened in the past, many of them were sanitation based. As a matter of fact, the great fallacy that people live with and continue to take with them, is that the modern medicine has increased our longevity. The reason why people lived longer during the 20th century, 80% came from sanitation and food handling, and that’s a fact.

Jason Hartman: Interesting, okay.

Gerald Celente: And so now you’re gonna start seeing both sanitation and food handling worsen as safety concerns cannot be enforced.

Jason Hartman: In other words, the government doesn’t have the money to run health departments.

Gerald Celente: And they’re doing a lousy job at it now.

Jason Hartman: But, you know, back to our prior thought though, Gerald, if the government is looking for more tax revenue, won’t they be continuing to attack the pizza shop and the sub shop down the street and the restaurant?

Gerald Celente: But that’s not where the plague will come from. The big scares come from look what happened in China with all the food scares. Look what happens in The US when we get a, what’s that term, not listeria, what’s the other one that happened, salmonella is one of them, and there’s another one that happens too from eating unsafe…e-coli, thank you, yeah, e-coli bacteria.

Jason Hartman: Right. But that doesn’t really kill the…

Gerald Celente: But that kind of a thing, because what I’m saying is when it happens it happens in mass and these recalls happen. Hundreds and hundreds and thousands of tons of different stuff is being recalled. So because the distribution is so centralized, if the poison enters into the system, whatever that new one may be, whatever that new killer bug may be, it’ll wipe out a lot. And the other one too that we’re gonna be writing about in the next top trends of 2009 is the possibility, the very real possibility of increased brain damage from all of the wireless communications, particularly cell phones. And the studies are out there and they keep coming out over and over again. And again, we have to look at the shot amount of time that most people have been using cell phones. Go back to 2000, most people weren’t using them back then. And everybody used to say no, I’m not gonna get one. I’m only gonna get one for an emergency. And of course now we’ve become an addicted nation. Matter of fact, Obama they say he’s gonna have withdrawal symptoms from not using his Blackberry. So there are loads of studies out there, Swedish studies, Danish studies, Israeli studies, French studies that are showing very high probabilities of brain damage, brain cancers. So we can see a great thinning of the population coming down the line. And while we also agree that overpopulation would be disastrous, another 100 million people in the country when we can’t take care of the 300 million plus that we have now, that’s why we’re saying these are tricky numbers to project forward on a straight line without accounting for variable wild cards.

Jason Hartman: Okay, so the question really there is, look, population is like multi-level marketing. I told two friends and they told two friends, you know, people reproduce. And if they live 80 years instead of 40 years, population increases. I mean around the world the experts say we’re gonna have 9 and a half billion people, a 50% increase by 2050. So the question is, number 1 is that number will be reduced below the 6 and a half billion we have today or they’ll just not be in the US? They will be elsewhere? Because I think it’s an issue of relativity. You know, The US may not be as good as it used to be, which I don’t think it will be. I think Americans have had a false sense of wealth propped up by the Alan Greenspan credit bubble, but it’s still gonna be better than a lot of other countries. So where is that population reduction coming from? It’s really like people are dying, I mean in mass quantities? That’s a lot of people.

Gerald Celente: What we’re saying is these are probabilities, trend forecasts that we look to. We don’t know which one it will be, but the cards are being played that are setting it up. And when you look at the black plague, you know, it was a sanitation issue as well as many others plagued since. So with conditions deteriorating, with course being cut, with food supplies being centralized, you’re gonna see more and more probabilities of these kind of things happening. So on the flip side of it, the buy local trend, the organic trend, the clean food trend, those are the people, the whole [00:38:36] healing people, those are the people that have a better chance of making money, ceasing opportunity, and staying healthy in an increasingly poisoned world. No one’s talking about hardly anymore about all the cancer deaths. I mean everybody knows somebody or many somebodys that are dying at very young ages. I mean we’re getting poisoned 100 different ways backwards. I mean you can name it. Whether it’s mercury in the air, whether it’s PCBs in the water, whatever it might be, and there’s no slowdown. I mean what did they just come out with one of the studies about the plastic bottles? And then they go “Oh, well we didn’t really do the research that we should have done on it.” No, I mean this thing is a wild card that’s ready as Pandora’s Box of probabilities for a black plague.

Jason Hartman: I call that the difference between the virtual economy and the real economy. The virtual economy is the smoke and mirrors Wall Street, Washington Federal Reserve game. And that economy is extremely unhealthy because the house of cards is collapsing. We know that the emperor has no clothes. The real economy is not so great, but it’s not nearly as bad as that. And when you talk about doing business in local communities, that’s what I call the real economy. And I think that is just a refreshing trend. I’m actually looking forward to that to some extent.

Gerald Celente: And that’s what we’re looking at. And the other thing, too, is that a major part of what’s gonna happen, things don’t just die and die off completely. It’s like a branch of the tree. It falls to the ground. It decomposes. It creates a new fertilizer and something else grows from it. We can see the birth of a Renaissance, rebirth in the sense that people will look back to the past to pick out the best of the past and retrofit it for the future. And we see that possibility coming. Again, I travel the world. And regardless of the bad press The US gets, the general population around the world still looks to The United States as the epicenter of inventiveness and innovation, even though we’re not anymore, and the people that live here know differently, but what we do have is flexibility. And I always say this also, I’m Italian descent, if I was born in Italy, I would never be the trend forecaster I am today because I would have been restricted by the culture there to think like them.

Jason Hartman: Right.

Gerald Celente: In America, you can really think the way you want to. You can really break out of the mold. But we’ve become so corporatized, homogenized, and federalized that we’re losing that individuality. There’s an opportunity now for that individuality to come to the surface. The motto at the Trends Research Institute is “Think for yourself”. I don’t have any leaders. I want to make this really clear is I have no leaders. Obama’s not my leader, McCain’s not my leader, George Bush isn’t my leader, Hillary Clinton’s not my leader, Bill Clinton’s not my leader, Sarkozy, Bush, Berlusconi, Brown, they’re not my leaders. If they were standing on one side of the street and said “Joe, come over here, I want to talk to you,” I say “Come over here if you want to talk to me!” They’re not my leaders. And people should understand this, these people are not more intelligent than they are. They certainly, by their deeds and actions, are living lower moral standards than many, and when people free themselves up to find the greatness within themselves, because we all have that spark of uniqueness that makes us individual and then we develop that, then we become masters at what we do, then we have a renaissance. And we believe the ground is being fertilized with the decay of this system for renaissance to sprout forth.

Jason Hartman: How specific do you get in your predictions? I mean where’s the DOW gonna be in a year? What’s the price of oil gonna be in a year? What’s the price of gold gonna be in a year? What’s the real estate gonna be doing in a year? You know, that kind of stuff. What will the hyperinflation rate be? And when are we gonna see this?

Gerald Celente: It’s very difficult to tell because of all the manipulation.

Jason Hartman: I agree.

Gerald Celente: So nobody can really say that, but what we do as trend forecasters is that as conditions continue to change, we keep readjusting the wind. By the way, in trend forecasting, the wind is the most difficult time. Again, you don’t know for example they’re gonna change the game and do things like “Okay, no more short selling. You only can buy, say stocks are good and buy into them. You can’t sell them short.” You don’t know when they’re gonna do this kind of stuff, and that changes the game. It changes the hand, but it doesn’t change the game. It may stall things for a while. [00:43:07] 2000 and we think it could happen next year. We look at the real estate market, continue as they showed, deflationary cycle accompanied by hyperinflation. So that means that yeah prices of houses re gonna go down but you’re gonna need more money to buy them because your money’s gonna be worthless.

Jason Hartman: And that means your debt is gonna be worth a lot less too, right?

Gerald Celente: Exactly. So those by the way that can afford it, borrowing money may be a very smart thing. And as a matter of fact, I plan on doing it myself.

Jason Hartman: You know, Gerald, I totally agree with you. I say now invest in debt. Stock up on cheap money. It’s on sale. It’s below the rate of inflation already.

Gerald Celente: And I think it’s gonna get lower.

Jason Hartman: And we’re gonna have much higher inflation. So when you talk about inflation, I mean I know you can’t say exactly when because that is the hard part with all the manipulation, I think all of this bailout money, and you look at the adjusted monetary base published by the fed recently, and you see it’s through the roof. It’s a hockey stick, you look at the graph. And all this money I think is gonna trickle down through Wall Street and all of that. In about a year in a half, two years, we’re gonna see some very significant inflation. But I don’t know exactly what that number’s gonna be. I don’t know if that means 15% annually or 25% annually. I mean think of it, if you have 25% inflation, which is very possible, it’s been much higher in other places throughout history, your debt is wiped out in four years.

Gerald Celente: Exactly. No, I’m on board with you, invest in debt, but only for the people who can afford it and really afford it, not to speculate in it.

Jason Hartman: Yeah. I agree. And when you say speculate, I absolutely agree with you. Debt is a powerful tool, but it’s gotta be used with respect, with prudence. And so make sure you’re not paying your own debts, your renters are. As long as you can keep them in there, they can keep their jobs. They can pay your debt for you. But the issue is…I mean what number do you think we’re gonna see in our future inflations?

Gerald Celente: I think 25% is a very real one. I mean I grew up during the Carter years. And I remember, what was it, what mortgage is back then, 22%?

Jason Hartman: Oh yeah, 21%, 19%, sure yeah.

Gerald Celente: So yeah, you can see that kind of inflation, and now it’s gonna be much worse. And by the way, just to give you a little bit of my background, I began my career, I was running the mayoral campaign in Yonkers, New York, at a graduate school in 1971. I worked in the New York State Senate as the assistant to the secretary of the Senate and that was the worst job I ever had. And that set the foundation for my becoming a political atheist. I was a kid, in my early 20s, and BS-isng with my buddies in the back of the Senate chamber and the Senator would walk in and all of a sudden my buddy would leave me to go pull out a chair to help the senator sit down. And my friend would come back and being a kid that grew up in the Bronx, you know, I’d say to him “What’s the matter? The cat can’t sit down by himself? He needs some help?” To watch grown men grovel is a disgusting spectacle, but you get inside the government you could see that everyone there sucks their way up to the top. From there, I went to St. John’s University. In 1972 I taught the nation’s first course extensively in American Politics and Campaign Technology, how to run campaigns. I was a pro at it. Then I went…I was a government affairs specialist and living in Chicago and commuting between Chicago and D.C. quite frequently. And so I was in D.C. during the first energy crisis in 1973. Jimmy Carter later on becomes president and the Iranian conflict starts breaking out. I had been following it for years, knew how the CIA overthrew the democratically elected government of Iran, on and on. And so when the conflict started really heating up, I knew the revolution was real and that the shah would be overthrown. They had this thing called a SAVAK, the secret police, they were brutal. And so it was a revolution waiting to happen. Jimmy Carter goes and spends his New Year’s Eve with the shah and his wife, and he comes back and he announces to the American people upon his return that the shah is the island of stability in the Middle East. At that moment I became a political atheist. I no longer believed anything.

Jason Hartman: So why do you say that about the shah though? I’m not sure I connected that whole thing.

Gerald Celente: Shah was this brutal dictator.

Jason Hartman: He was brutal, okay.

Gerald Celente: Oh my God, the SAVAK, the secret polic.

Jason Hartman: But wasn’t Khomeini worse though?

Gerald Celente: Again, it’s not a question of…That’s like when I say to people “No, I wouldn’t vote for Obama, here’s why. And I run down the list. He wants to send more troops to Afghanistan, wants more nuclear, he wants more coal, he’s for the bailout.” I go on down the whole list. They say “Oh, so you’re gonna vote for McCain?” And I say no I’m not gonna vote for him either, I don’t like him either. So not liking one doesn’t mean the other one’s better. We’re saying the seeds to the revolution was sewn from the brutality of the Shah’s regime. And when you have excessive levels of brutality, then anything can happen after that. So the SAVAK, as I was saying, that was second to none only to the SS. And if you had been following this over the years and reading what was going on in Iran, when they overthrew mostly dead government in 1953, persecuted, not all of them, the intellectuals, the artists, and the opposition, and know about the brutality of what transpired from then until…Do you know what the Shah’s name was they used to call him? The head of the peacock throne, something like the emperor for life in this one and for many more beyond – I mean this is a set up waiting to happen. So anyway, when it happened, I pull myself away from the rhetoric. I didn’t take an ideological position on it. And I said to myself, what will be the implications of the overthrow of the Shah. And I started investing in gold and oil. I knew both of them would go up.

Jason Hartman: But they didn’t. I mean gold…

Gerald Celente: Oh no. Gold took off. Gold didn’t decline until…I could tell you the date.

Jason Hartman: I mean but Gerald, we know it went up, but you had an 18 year bear market.

Gerald Celente: No, no, no. We’re talking about speculative strategy and investing in current events forming future trends. So I rode the spike, and gold didn’t decline until I think it was January 20th, 1980.

Jason Hartman: Right.

Gerald Celente: It peaked out at $875.

Jason Hartman: And then it went down to like $280 for about 18 years.

Gerald Celente: Yeah, it fluctuated back and forth, right. But what I’m saying is you could watch how current events form future trends. And that was the genesis of how I learned how to forecast trends. I pulled myself back from the emotions of what people wanted, liked, believed, or thought rather than looking at the facts. And that’s what we do at the Trends Research Institute. It’s current events form future trends. We look at things for the way they are and not the way they want them to be. And that was the history of how I got into the business.

Jason Hartman: Oh good, interesting. Well listen, we’re running out of time here. Anything you want to say in closing, give our listeners some advice on what’s coming? It’s been an interesting discussion.

Gerald Celente: Yes, what I would say to them is prepare for the worst. And we’re gonna enter into a very difficult winter. Don’t spend an extra dime that you don’t need to spend. Practice that Yankee frugality that made this country what it was. Buy local as much as you can. Become involved in local issues. The first thing, call up your city council wherever you live, and tell it to shut the lights off at night. They’re burning electricity needlessly. Like my father, there were 7 of us, may his soul rest in peace, he used to say to us “Shut the lights! What do you think, I have a pull with Edison?” when we left the room. We have to conserve. Wear it out, use it up, do without, you know, that old kind of proverb. Fix it, repair it, be very frugal. And if you have a child in college and you’re spending an inordinate amount of money for your kid to get a degree in business administration, economics, social studies, art history, psychology, if you’re not going for one of the hard sciences, or a practical return on investment education, consider sending them to a community college and stop wasting your money and throwing it into the college industrial complex. Use the time to save.

Jason Hartman: I love that. The college industrial complex, you know, I want to do a show about that one because that’s another big scam. You know, education’s a big time…It’s a rip off.

Gerald Celente: What a joke.

Jason Hartman: Yeah, it really is. You know, Peter Schiff said “How will people be able to afford college?” we were talking about on my show. And he says “Well, maybe colleges will finally get priced reasonably and become efficient instead of these over bloated bureaucracies. I mean it’s just ridiculous, academia. Anyway, another subject.

Gerald Celente: Listen, I’m with you. I’m lucky I survived.

Jason Hartman: Yeah, I know. I know. Well listen, check out Gerald Celente’s website at TrendsResearch.com. Gerald, thank you so much for sharing your wisdom with us. We appreciate having you on the show.

Gerald Celente: Hey, thank you for having me.

Narrator: Thank you for joining us today for the Holistic Survival Show, protecting the people, places, and profits you care about in uncertain times. Be sure to listen to our Creating Wealth show which focuses on exploiting the financial and wealth creation opportunities in today’s economy. Learn more at www.JasonHartman.com or search Jason Hartman on ITunes. This show is produced by the Hartman Media Company, offering very general guidelines and information. Opinions of guests are their own and none of the content should be considered individual advice. If you require personalized advice, please consult an appropriate professional, information deemed reliable, but not guaranteed (Topi image: Flickr | Trend Commandments).

The Holistic Survival Team

Transcribed by Ralph

 

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