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It can happen here

Posted by John T. Reed on

One of the problems of being an expert is you see too much. When I was a real estate agent, I was rapidly reading books and attending courses. Then I would show a house. At first, all the houses looked great. But the more I learned, the more I saw the bad stuff. At an appraisal course, one of my fellow students there was also an agent. He said the more he learned the harder it was for him to sell the houses because he could see what was wrong. “Me, too,” I said.
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In football, I can see too much. When my middle son played freshman high school football, he was proud of how good his team was. I went to a game which they won. “See?” he said. “Your offense did not get a first down,” I said. “You won based on an over-aggressive defense and turnovers by the other team. Some opponent is going to burn your unsound defense.”
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In real estate I often encounter beginners all excited about their latest acquisition. One guy told me how much positive cash flow he had. I asked, “What are your gross rents and your mortgage payments?” He told me. I said, “Your net income is $X and your cash flow is minus $Y.” He said no it was as he said. A year later he called me. “How did you know in a matter of seconds how much money I was going to lose? I just did my taxes and your figures were almost exactly correct.”
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Net income is generally 55% of the gross. You said it was 30%. As is typical, you left out a bunch of expenses.
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Now, I have written two books on financial calamity: Best Practices for the Intelligent Real Estate Investor and how to Protect Your Life Savings From Hyperinflation & Depression. Now I feel like a nuclear power expert in the control room of a huge power plant watching all the dials and meters giving pending disaster readings. I am trying to warn my readers and fearing that they are not taking me seriously. Kind of an, “if if were really that bad, it would be on Brett Bair”
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i also get the impression that people do not know what it means to be a non-fiction book author. I read an average of 100 books for every book I write. if each book is, say, 80,000 words, that is 8,000,000 words. for the inflation book.
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I even tracked down and watched a silent movie made about Austrian hyperinflation. It was The Joyless Street (Die freudlose Gasse), a 1925 film, the second starring role for Greta Garbo.
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And I read Anna Eisenmenger’s diary (https://www.amazon.com/Blockade-Diary-Austrian…/…/9333192182). That book had me in tears three times and after I read it I had to go to the book store and buy a happy book to get my head straight. My wife was unable to finish reading it because it was such a nightmare. A current Venezuelan would read Eisenmenger and say, “Yes! Yes! That is what happened to us.”
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After those two experiences, I felt like I have lived through the horrible Austrian hyperinflation myself and that those were my family members in that book and movie.
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Now I stand here and watch all that is going on with federal fiscal and monetary policy, and talk about gouging, rationing, hoarding, empty shelves, fights over the last items left. “It’s happening again,” is the feeling I get. Anna Eisenmenger was a heroic saint, but if she were here now, I expect she would say “Mein Gott! You must warn everyone! That must never happen to anyone again!” I tried. They do not believe it can happen here.
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When I mentioned hyperinflation writing to Stephen Moore, he rudely turned and walked away. At some point, I need to turn away. Just fine tune MY ability to deal with it. My grandkids have been born since I wrote the inflation book. I should do my own hyperinflation little fire drill and make sure I am ready.

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