Is the 1970s Economy Coming Back? A Comparison to 2023

Рет қаралды 21,362

7 ай бұрын

Ken McElroy delves into the striking similarities between the 1970s economy and the contemporary financial landscape. Ken explores key factors like inflation, energy crises, and interest rates, drawing parallels between then and now. With global tensions and economic uncertainties, understanding these historical patterns may offer critical insights for the future.
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Пікірлер: 50

@businessschooldropout2330 7 ай бұрын

Thanks. Finally someone who sees it. My 1980 semi-truck and trailer were repossessed in 1982. I kept telling other truckers and brokers to hang on to their huge profits in 21/22 and not buy new or expand because it felt like 1978. Now the are crying the blues because there is little freight moving and no money left after fuel and maintenance for payments. RB Auction is filling up with trucks and trailers just like 1982.

@businessschooldropout2330 7 ай бұрын

Let the fed funds graph be your guide!

@johnnyb33good21 7 ай бұрын

on December 27th 1974, My grandpa and grandma purchased their 2 story single family house in the new development of Rancho Penasquitos, San Diego, California and purchased it for $55,000 and I believe he used his VA home loan. Not sure on the exact initial interest rate but they did say the price of the home was considered high and the interest rate was high and expensive for back then. Within in 4yrs their home went up by 40%. Crazy to see what it's worth now 50 yrs later 4bed 3bath with 2 car garage Living square footage is 2,049, lot square footage of 6743 The home is approximately valued at $1.2 million now And the current interest rates if you are to buy with FHA, VA or conventional are in the 7% to 8% range. Instead of sitting on the sidelines and waiting to buy real estate, It pays to buy real and wait. Bought my 1st 4-plex in 2017. Since then i currently own 10 properties with 45 units. I'm still working on buying more in this market cycle

@MonteMitchell 7 ай бұрын

Nicely done

@johnnyb33good21 7 ай бұрын

@@MonteMitchell thank you. I definitely took advantage of house hacking and using owner-occupied loans such as VA 0% down and FHA 3.5% down to purchase my first 4 unit properties to get started

@arboradvising6291 7 ай бұрын

Hi Ken and team. Insightful as always. You never disappoint. Keep it up! Appreciate the work that goes into creating solid content like this.

@stevetappe3814 7 ай бұрын

Wages grew along with the inflation in the 70s. They aren’t growing the same now. Whatever else that causes, it will prevent real estate prices from exploding the way they did back then. Rents and values aren’t tied together precisely, but they aren’t completely disconnected.

@roberttjostelson3916 7 ай бұрын

Wow, interesting time to be in real estate. Thank you for the great content. We appreciate you.

@jalincassidy6085 7 ай бұрын

Thank you for putting this video together. I have been looking for a video like this for a while.

@RobotsCanDoAnything 7 ай бұрын

Excellent commentary, thank.

@apartmentinvestingforbeginners 7 ай бұрын

Interesting perspective. Love that you have a mentor that has seen the economy at its best and worse in one lifetime

@marckuhnmak 7 ай бұрын

Great video Ken. I will say I do agree with you!

@Ant2Fresh 7 ай бұрын

Good videos. Now, can you compare wages as well?

@ashleyashley369 Ай бұрын

Thanks for your sharing

@scottkidd1969 7 ай бұрын

Interesting, this was exactly what we were discussing last week that the price of oil could keep inflation high and rates up for an extended period of time. Another great one @ken McElroy

@donklee3514 7 ай бұрын

Energy price increases are only one of many factors powering an inflationary cycle. To get a clear picture you have to consider them all. General increases in wages, etc. Inflation is sticky on the down side and cumulative on the up side. The inflationary prices we are all experiencing are here to stay.

@scottkidd1969 7 ай бұрын

@@donklee3514 understood, I agree inflation is here to stay. It is always here. There are a lot of other factors to consider.

@DanKohan 7 ай бұрын

When there are issues with oil, it affects a lot of things, like the stuff we buy and the cost of building things. This could mean higher interest rates in the future. Thanks for explaining this!

@usnmedic09 7 ай бұрын

Only think you skipped over is how he made all his money in the 70’s

@stevetappe3814 7 ай бұрын

Rents and values went nuts in the 70s. 3 or 4x in a few years. The debt payments stayed level. Borrow as much as possible, buy decent properties, boom. You win.

@wallyjohnson4971 7 ай бұрын

Great vide Ken.

@WilliamGallo-uw5ye 7 ай бұрын

Good video

@grouphuff 7 ай бұрын

Ken, agree with the comparison to the 1970s. Residential real estate prices will continue to increase due to low supply and when rates start to decrease.

@brianoleson9224 7 ай бұрын

tell that to the 10s of millions of americans that have seen there home values drop anywhere from $50,000 to 150,000 $ since 2022

@zhinan888 7 ай бұрын

Ken, there is one major difference. US debt load is much higher at $33 trillion. At 15% interest rate debt payment is 4.95 trillion. US income is $4 trillion. It is mathematically impossible for US to keep interest rate high for long.

@RH-lg9uc 7 ай бұрын

Agreed

@donklee3514 7 ай бұрын

"It is mathematically impossible for US to keep interest rate high for long." I think you're going to be surprised. Stagflation is a market failure. Market failures are the Achilles heel of free market fundamentalist thinking. And monetarist? And .....? Market failures don't follow the rules. The one thing about all economic religions is that they have no basis in analysis. Exceptions are fails. The model doesn't work. So, form a new thesis and start testing again. Many people choose dogma all the way into their grave. Doing the same thing over and over again expecting different results. You're right that the debt is much bigger, but you're missing other factors that are much more relevant. BRICS and de-dollarisation are more notable differences. Dollars flowing back into the domestic money supply is going to give the monetarist at the FED heart burn all the time for a decade or two. It is going to make domestic inflation more persistent and frequent. The FED wants to print not remove money from the money supply. Another Achilles Heel. Endless wars? Endless wars are in line with your thinking. Deficit funded? Vietnam wasn't supposed to be an endless war, but it quickly turned into one. What are we in 14 or more conflicts all at once and growing. Ukraine? Israel? The wars of gog and magog? Who is going to be the Final Antichrist? Joe Biden? or Donald Trump? The empire is wobbling under stress and no one wants to notice. Will owning the 100 unit domicile apartment complex make any difference at all in the grand scheme of things?

@JonathanHerz 7 ай бұрын

I agree. The 1970s were like an elderly person’s first bout with cancer. The Reagan administration put it into remission. Today is like the 1970s but terminal.

@TwoGuysTakeonRealEstate 7 ай бұрын

He said it was similar but there are differences. It does seem closer to any other times.

@donklee3514 7 ай бұрын

@@JonathanHerz "The Reagan administration put it into remission." Reagan broke out the credit card and started spending like a drunken sailor. Reaganomics sacrificed the future of generations for the benefit of a few industries and the US empire. They did so with the planned detriment of labor in general and the destruction of retirement hopes for more than half the population. 33 Trillion and it started when the monetarist and neo-con-artiest changed public policies to do so.

@tamaralucas7138 7 ай бұрын

In the 1970s many stay at home moms went to work to increase the household income. We no longer have that card to play for this recession. Layoffs are increasing and many people are one or two months away from a forced home sale if one person loses their job. Homes need to decrease back to 2019 values or said differently $100 per square foot in most cities that aren’t blue.

@didiermorissonneau505 7 ай бұрын

Ken without Danille. The best videos! :)

@eyelovecolorado2195 7 ай бұрын

Ken, Are you still “pencils down”?

@arandmorgan 7 ай бұрын

Things that are different, Wage disparity and joblessness thus reducing consumption leading to further business failures. Ai and robotics leading to job reductions Offshore industry Decreasing demographics Aging population, greater pension payments Higher national debt Real estate overpriced beyond wages or value of wages not able to afford components of materials and land. No disposable income for entertainment, bars, cars... Anything. Inflation is comparable to 1930's depression and even worse when compared with wages.

@vanessakellow2957 6 ай бұрын

With the UK Govt attacking landlords with Section 24 tax and imposing more and more bureaucratic controls- we will definitely be back in the 70’s - labour govt - crippled housing. Sitting tenants rent controls.. trying to see the opportunity?? Any ideas? Love your work.

@Allenrodarte 7 ай бұрын

🤔So it sounds like even though rates are high right now, it might be a good time to buy a property in todays market due to what’s to come in the future with real estate and lower rates.

@losianoloveall 7 ай бұрын

it's already here

@myserenity1130 7 ай бұрын

Mike Zuber from One Rental At A Time(ORAAT) has been saying this over a year!

@Pinoystory311 7 ай бұрын

If oil is the problem...maybe they will rush in solar/green energy?

@rifleman42051 7 ай бұрын

Dude we are going into a World Wide Depression just look at the data during the Great Depression until now the data is almost Identical!!

@brianoleson9224 7 ай бұрын

this guy is never going to tell you that... unfortunately you have to have discussions like this with your head not even your family to be honest. were talking about ether a historic recession or depression 2 downturns in 95 years nobody is going to listen to you when 75 years in between the great recession nd great depression there was no massive downturn that crushed the economy for generations

@brianoleson9224 7 ай бұрын

NO. even if we didnt cause inflation to surge we were going to have a historic recession like 2008 or a depression whether in 2020 2025 2030 or 2032 it was within 10 years or so . We inflated bubbles in stocks bonds real estate a trifecta for the 1st time in history. we have a very weak brittle financial system if we didnt print money in 2020 we were going to have a depression who knows it could have topped the great depression thats not my opinion its fact that in march 2020 we were spiraling at a rate we had never seen before in u.s history

@rossferguson5786 7 ай бұрын

OK, fine ! What was the national debt in the 1970’s ? Wake up people !

@brianoleson9224 7 ай бұрын

oh thats easy it didnt hit 1 trillion for the 1st time in u.s history until 1980s we added i think half a trillion just in last few months it didnt take 100 years + .....