← The David Greene Show
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- [00:21]
David Green
What's going on, everyone? Welcome to Real Talk Real Estate. This is Mortgage Monday. I'm David Green and I'm here with Christian Bachelder, big brain, the lone ranger and father to the mortgage mutt. Christian, how are you today?
- [00:33]
Christian Bachelder
I'm doing pretty good. Pretty good. Glad to be here.
- [00:36]
David Green
Your hair looks really good, by the way. I said that last time, and I'm, I'm a little jealous.
- [00:40]
Christian Bachelder
I did cut it all off. This is my, my headphone. You can probably see my headphone indent right there. I've been talking to, to the rest of the one brokerage all day.
- [00:48]
David Green
Yes, you have. And we are rolling. Just a public service announcement. We are looking to bring in new mortgage loan officers. So if you know a loan officer, if you are a loan officer, we really need more people to keep up with the demand that we're experiencing. And this is happening at a time when other places are laying people off. So please do us a favor. Share the word about the show and the fact we're hiring with people that you know. How many unread text messages do you have today so far?
- [01:11]
Christian Bachelder
Oh, scares me to think about probably, probably 100 plus from clients that I promise I will get back to each and every one of you today.
- [01:17]
David Green
Oh, he's going to be working till midnight to get back to you guys, but we're taking a break to record the show for you.
- [01:22]
Christian Bachelder
That's right. But yeah, it's. If you are a loan officer, especially with experience, you know what you're doing. You know the non QM market, you know, the conventional market, reach out. We have incredible resources here, incredible abilities to help you scale and grow your business and your performance. You're looking for something that's, that's a little new and unique and gives you an ability to kind of raise that ceiling. Reach out.
- [01:43]
David Green
All right. In today's video, as you saw from the thumbnail, Christian, I will be talking about five things that will lead to interest rates going up. A lot of people have been sitting on the sidelines. Whether they're waiting to refinance or they're waiting to buy for rates to come down. We're all looking for those 3% rates that we really took for granted when we had them. Much like that romantic partner that you think will always be there, they won't be. You got to love it while it's there. And now they're gone. And people have been waiting, but they might be getting worse. So we're going to talk about five things to look out for that will likely lead to interest rate increases. And a lot of this has to do with the tariff talk. So, Christian, you were mentioning something right before we started recording about the latest in the battle of the titans between Trump and Powell. Can you share what that was?
- [02:27]
Christian Bachelder
Yeah, absolutely. Now, obviously I think everybody knows, but just for reference, Jerome Powell is the head of the Fed right in America. And obviously Trump's a president and Trump appointed pal back in his first time around in office. And they've been definitely two titans going at it. You think of like those big crazy, epic fights in like a big sci fi movie, right? And the update, David, is, is Trump has been kind of pounding the desk saying, you know, Powell's a doofus and I'm going to fire him. And you know, questionable about the legalities of can the President actually fire the Fed of the, the chair of the Fed. But he just came out today recording this April 22, 2025, obviously. And he just announced, I have no plans now or in the immediate future to fire Jerome Powell. Which sounds like a very Dave and I were joke and sounds like those lawyers in the background said, hey, why don't you just say this just to settle the waters a little bit here because you definitely don't want the President and the Fed arguing. That's two people that it's very beneficial to have on the same page. But I think that's funny because that's a, that's a pretty big about face from what we've been in the last week or so, right?
- [03:25]
David Green
Yeah. It's kind of like that dynamic between them is Powell does what he wants, what he thinks is best for the economy. Trump does what he thinks is best for the economy. It's like your head coach calling a play and your point guard saying, I don't want to run that and you can't make me. It's in my contract. So I think Trump is frustrated that he's making certain moves like that he thinks are best for the country, which would be tariffing other countries trying to bring manufacturing back here. He knows that's going to lead to higher prices, so he wants rates to come down to balance out the affordability issue. Powell is concerned that if he increases rates, it's going to lead to higher inflation, which if you measure inflation by the price of things, tariffs is likely to increase it. So they each have the same view of the problem, but they have a different solution in mind for how to fix it. And I think they're just frustrated with each other. The players, like, let me call the Play I want to call on the field and the coach is like, call the plays that we're working on because we got a strategy up here in the box and this is going on. So if nothing less, it makes for good TV watching these two go back and forth. And speaking of good tv, there's a lot of talk, I mean, in my God, in my adult years, I don't know if I've ever seen as much new information hitting the airwaves as fast as it is about changes to the entire country's economic foundations through this tariff. And the talk of returning to manufacturing. And interest rates on mortgages will be affected by a lot of this. So we're going to talk about five things that we think everyone should be watching for to determine if rates are going to go up. And I'm going to have Christian explain why he thinks that they could go up or what would make them go up on each of the five. So let's start with number one, China selling US Treasuries. How would this increase mortgage rates on.
- [05:03]
Christian Bachelder
On in the U.S. yeah, 100% for those familiar and for those not. Mortgage rates are, are fairly roughly correlated to the ten year Treasury. Right. And that's directly correlated by how many buyers there are for bonds in the US Market. Other countries are our largest buyers. We typically think of institutional buyers, Vanguard, BlackRock, State street as being like the buyers that buy everything. Not with U.S. bonds. Countries buy U.S. bonds, right. And they hold a lot of our debt. Meaning when those rates go up, we actually owe China more money without a service actually being exchanged. Right. China lent us money and we have to pay debt on it. Just like when you borrow money for your mortgage. Except the mortgage is the American economy. Right. That's the collateral there. Now historically there's always been confidence in it. That's why they don't pay great returns. You know, These are like 3, 3 to 5% rate of returns. However, if they're say for instance, we're tariffing a huge country that has a lot of power. Right. If they decided that they wanted to pull their investment into giving the US government debt and receiving a return on that because of international disputes, because of tariffs, because of whatever that means there are less buyers in the market for bonds. What happens when there's less buyers? It means you have to increase the buyability of that product in order to incentivize new buyers. Because if State street, Vanguard and BlackRock aren't buying debt at 4% and they say, oh, we'll get in the market once it hits 6%. Guess what? The market's going to have to adjust upwards. And with rates, it's backwards because you usually think like, oh, the value has to become less expensive to incentivize buyers to buy it. Right. With an investment, the return needs to get higher in order to incentivize an investor to buy it. And basically that means bad for mortgage rates. Right. Just to equate it, easily, bond rates go up, it's going to negatively affect the rate you get on your mortgage. Right? Because that's.
- [07:03]
David Green
Right.
- [07:04]
Christian Bachelder
Increasing that return for the investor. And even though on the show we consider our buyers, our investors, the lender is the true investor here, right. They're the person giving you money and getting some rate of return in response for that.
- [07:16]
David Green
They're investing in your debt, they're buying the note that you originated, and they want rates higher because they're getting a higher rate of return. The only thing that stops them from just insisting that you pay a really high interest rate because that's what they want, would be if they go buy bonds instead. So those are the two things that they kind of go back and forth between. Do we want to buy mortgages or do we want to buy bonds? They're both relatively safe, similar risk profiles and so similar interest rates. And that's why, like you said, Christian, they track together. This is different than the prime rate, which Jerome Powell actually does influence here. That's the rate that banks charge each other when they borrow money over the short term, which can affect indirectly, mortgage rates. But we really track how bad do people want bonds. That's really what we're looking at here. And if China sells all their Treasuries, there's going to be a lot of people that need to buy them, and they're probably going to go on sale. There's not as much need for it. Now in the trade war, there's something going on kind of. I don't know if it's under the surface anymore. It's kind of come up to the surface, and that's China doesn't want to come negotiate with us. Instead, they're going to all the countries around them and they're saying, hey, let's make a deal with us instead of with the US and the US Is doing the same thing. So you kind of have a divorce going on, and both partners are trying to get all their friends on their side in the divorce. And whoever can get the most allies is going to have more leverage when they actually come to the table to negotiate with each Other. And one of the ways that China can hurt the US's negotiating power is to convince other countries to sell their Treasuries that they own of the us, just like China is. So can you talk about that a little bit, Christian?
- [08:49]
Christian Bachelder
Yeah, and this is, you know, it's funny because I, when I bring this up, I feel like a lot of people are surprised. If I were to just ask your listeners, you know, who do you think holds the most U.S. debt from anybody right in the world? Probably like a huge percentage of people would say China, because I feel like that's kind of been pushed now. China holds a lot, but it's actually would probably surprise a lot of listeners. Japan is the biggest holder of US bonds, and it's by a substantial portion. I mean, just a quick Google search and you guys could check me on this. Japan, as of first quarter of 2025, their holdings exceed 1 trillion. 1.06 trillion was the data. At the end of February 2025, China owns 768. So it's almost by a factor of 30% more. So while we're ticking off China, and their direct response may be to sell off U.S. treasuries to negatively impact mortgage rates and the economy and approval ratings of Trump and everything in between, what could honestly and shockingly be even more detrimental is if we piss off people like Japan because they have a larger holding in these things that are so influential on our economy. And if you add on the uk, France, everybody else, like, it's a substantially larger portion than China. And I think really the unspoken consequence of all this stuff that, you know, mainly is focused on China is how it hit everybody else. David, Right. He kind of came up with that list of the full across the board tariffs. Not really as worried about pissing off China, it's the fact that we pissed off everybody else. And that simultaneous impact could have massive consequences if now, obviously, since then, he decided to delay the other tariffs by 90 days. But if that turns back on and he ends up honoring those, we could see a massive sell off from our historical allies like countries like Japan.
- [10:40]
David Green
Right now. If you're wondering what would stop these countries from doing that and really hurting our economy by driving interest rates up, it's because it would hurt them too. This is the problem with the partnership. When you hurt the other side, you also hurt yourself. When you help the other side, you also help yourself. And so the whole idea of renegotiating here is who can withstand the pain the longest? Because if they sell those Treasuries now they have to reinvest that money into something else. How do you do that? And China is in the position where as their workers are being laid off because they can't sell things here as much, they may have to print money to pay all these people to buy all these goods so that they don't just sit on a boat and go to waste, which would cause inflation over there. So it's not only America that's in this tough position. Everybody kind of is. And it's a situation of who's going to blink first and who's going to give something up. And America's bet is that we want them to give up the advantage that they've had for a long time and bring it into what our current administration thinks would be fair. All right, number three, inflation from the rising prices due to these tariffs. How would that increase mortgage rates?
- [11:39]
Christian Bachelder
Yeah, I mean, simple enough. It's, it's if there, if everything costs more, everything goes up and the Fed in turn will have their kind of classic lever that they pull is if inflation becomes rampant and we're trying to combat it. The most kind of direct approach that the Fed takes is increasing interest rates, which the. David and I have had many talks on, on this and personally about like, is there really. Is this really the best way to fight inflation? Right. Which is moving the lever of the interest rate adjustments. But the ultimate idea is if you make money harder to come by, it'll make people spend less, therefore decreasing the demand, therefore driving down prices, which is in direct contestion to inflation. That's what the mindset of it is. There's varying arguments of whether or not it works very well. But that would lead, if inflation runs away, that would lead to Powell needing to make a decision of, hey, we got to combat this inflation. We can't keep going towards our target of 2% rates. We got to crank these and kind of hurt the economy in order to give it some medicine. Right. In the effort of bringing inflation back down.
- [12:48]
David Green
So if you're a nerd, like we are and you like this kind of stuff, the idea here is that increasing interest rates, it does slow down prices going up, but it doesn't do it in a healthy way. It just slows down how quickly money changes hands. So you're also decreasing how much taxes are collected, you're decreasing how much wealth is created. You're hurting everything in order to try to keep prices low. We would prefer to see actually removing currency from the system. There's just too much of it and it needs to Find a place to go. And so that drives up the price of things when people go buy them. Like everybody goes and buys real estate or multifamily properties, that pushes the price up too high. We'd rather just see you take out some of the volume of the currency as opposed to slowing down how often it changes hands. I really haven't heard many other economists present this position, and I'm curious if it's because I'm completely crazy and this is the wrong way to think of it, or it's just unconventional. And they typically look at it like the easiest way to do this is to put up interest rates whenever you see prices going up and to put them down when you see unemployment becoming a problem. All right, number four, Powell sticking it to Trump. How would this battle of the titans affect mortgage rates if Powell decides he's tired of Trump dragging him in the news and wants to lash back out?
- [14:01]
Christian Bachelder
Yeah. Just imagine the scene of, like, gorilla versus King Kong just, you know, hammering on each other. Right. But this, you know, I. I hope, you know, and of course, the American public would hope that we're not making decisions based on vendettas. Right. But words can get pretty spicy. You know, when Trump. I think Trump called Powell a doofus the other day, you know, you even heard that? I know. Just like SL Salt. He says he's dumb as a rock. He's dumb as a rock. Which, you know, you can laugh about it, but in reality, you know, you probably shouldn't have the President calling the head of the Fed dumb as a rock. He's not. Right. They're not agreeing, and they have different viewpoints on what to do. Now, obviously a negative side effect of this is two very conflicting views, and nobody really gets what they want. Right. Really. They're supposed to have aligned interest. Right. And while their aligned interest is there, you know, bettering of the general economic environment in America, their views and their paths on how they envision getting there are. They're really starting to diverge quite a bit. Right. And this is absolutely something worth considering, monitoring the relationship of PAL and Trump. Because if we start saying, oh, yeah, watch what I can do, and Powell just cranks it, that impacts us. Right. Cranks the interest rates up a percent or whatever crazy stuff we can do, you know, that that would be significantly impactful. Right. Whether for positive or negative.
- [15:26]
David Green
Yeah. And if interest rates do go up on housing, that just slows down how many houses change hands. It slows down how much people make money in the economy. It makes housing less Affordable. It really just damages an already troublesome economy. But it's difficult to separate the price of housing from the price of everything else, which is a problem here. So, number five, falling stock prices due to tariff and company profit concerns. How would falling stock prices influence the rise of mortgage rates?
- [15:57]
Christian Bachelder
Yeah, this is a super interesting discussion, and this is the last one we'll end on. Historically speaking, there's a very strong correlation between when money in mass, in bulk exit, exits the stock market, it will typically retreat into the security of bonds, for instance. You know, the government is a very low risk, right? Lending money to the US Government, it's not going to default. At least cross your fingers, right? Knock on wood. But typically when money exits the more volatile and less easy to predict stock market, it moves into the more standard, secure government bonds. Now, we're seeing a little bit of a divergence from this now, where money is just kind of pulling back, which is interesting. But historically, and just so that you guys understand it for context, typically on days where the stock market does very poorly, the bond market actually does very well. That's very, very, very common. It's not a hundred percent across the board, but it's very common to have them inversely related. So that's something to keep in mind on. If you guys, you know, see something that you're thinking is going to impact the stock market, may be a good time to lock in your mortgage rate. Right? And we saw this two or three weeks ago when the tariffs were first announced, when he brought out his whole, you know, banner with all the, the table rates shot down, right? They like fell off a cliff those three days. And then obviously we've seen the results since then and they climbed back up. But we had a day where I think the dow was down 5 or 6% and mortgage rates dropped by like a half a percent. It was great.
- [17:28]
David Green
And you know what everyone said to me? Do you think they're going to keep going even lower? And then what?
- [17:34]
Christian Bachelder
My daily life, man, every day.
- [17:37]
David Green
And what happened? Did they go lower? Christian?
- [17:39]
Christian Bachelder
They did not go lower. We had about two days of, you know, theme park fun. And, you know, people got.
- [17:46]
David Green
You were ready and you locked in. You did great. But if you weren't, they came right back up with a vengeance. And the greedy people, what's that phrase, Hogs get something and pigs get slaughtered? I don't remember. It has to do with greed. And people that were looking for him to got lower, got hurt. Solid point there. All right, so what are your thoughts on if you had to go 50, 50. Are rates more likely to go down in the near future or up? Where would you put your bet? Every mortgage broker loves this question, by the way.
- [18:15]
Christian Bachelder
Yeah, this is the one thing that I get. I would, I would preface this by saying this is the hardest time in my career that I've seen in this industry of answering this question. Just harder than Covid, harder than everything prior to that. Right now, I think my long term projection, two to four years is still down. It's less down than I was six months ago. Right. And I'm actually going to be probably part of the smaller few saying I think in the next like rest of this year, call it seven, eight months, I think they're actually likely to go up, which is not the thing that everybody wants to hear. It's not the exciting thing. I think it's very possible though.
- [18:56]
David Green
Yep. Okay, so what you're saying here, projection.
- [18:59]
Christian Bachelder
Up, my two plus year projection down.
- [19:01]
David Green
There we go. So short term you think that they're probably going to go up, but long term you think that they're going to go down.
- [19:05]
Christian Bachelder
So yeah, I think my projection the next two years, I do think the rates will come down in the next one to two years. I'm probably in the minority where I think they may actually pretty high chance of going up. So we'll see. Obviously nothing is guaranteed getting this question every day, but yeah, that's, that's where I would put my, my official mortgage guru prediction there.
- [19:24]
David Green
Yeah. For what it's worth, I think the same. I think in the short term rates are about to go up and they're going to probably keep going up. And then long term we're going to figure out a way to get them back down, get things chugging again. Okay, so let's dive into this a little bit deeper, Christian. Falling stock prices due to tariff profit concerns. Let me give you my take on it and then you tell me if you're seeing a different perspective and we will put them together to get like a holistic version of what we think could be going on. The reason I believe that stock prices are falling is because people are selling them. So in order to get someone to buy them once they're sold, you have to offer them at a lower price. I think people are selling them because they know tariffs are going to hurt the profitability of the big companies that trade publicly. And part of why I think a lot of people miss this is the way that tariffs get discussed. They typically are referred to in maybe like the spirit of a tariff, like the spirit of the law versus the letter of the law. So you hear people say it's a tax on the consumer. That's what a tariff is. It's an increased tax. And it does function like that, right? Because practically, if a company has to pay 25% more to buy something from outside of the U.S. a lot of them are going to increase their price by 25% and it does get passed on to the consumer. In practical terms, that's true, but it doesn't always happen in every scenario like that. There is also the option where the company takes a 25% hit on their profits. Now, this is also assuming It's a pure 25% tariff. It's not like all operations across the entire company are affected by just the price of that good that they're importing. Right? Their, their labor costs aren't changing, their marketing costs. It's not really a full 25% increase. If, if you had to pay an extra 25% on the price we pay for one brokerage T shirts or something that doesn't that all of our loans immediately become 25% higher. Right? It's a tiny percentage of the overall budget of the company, but it is more, which would theoretically make the product more. The problem here is if your competition doesn't increase and you do, let's say you actually increase Your price by 5% to make up for the 25% tariff and your competition says we're only going to increase by 2%, nobody buys your thing. The demand goes to that other company. So it is not an automatic increase in prices and it is definitely not an automatic increase in the percentage that the tariff was. However, it will make companies less profitable. That means you don't want to own the stock in that company at the price you paid for it when you bought it because they had lower operating expenses when you bought into it. So as people realize, if these tariffs do come to fruition, if we do put tariffs on other countries importing their goods, American companies will have to respond by either increasing their prices or more likely taking hits on their profit. That means I don't want to own the stock at this price. I want to own it at a cheaper price. So let me sell it, keep my money on the sidelines, wait and see if the prices come down, and then I'll jump back in when I know where we are. And no one can jump in yet because we sort of paused for 90 days all the majority of the tariffs that we threatened to impose on other countries. So there's this like, nervous energy of, are we going to fight? Are we not going to fight? Should I move my money in? Should I not move my money in? Everybody's overthinking this, but nothing's happening right now. If the money does flee the stock market, like we said earlier in the show, if you were listening on YouTube, welcome, this is the full podcast and you guys are here listening. So thank you for that. If the money does leave the stock market, it's got to go somewhere. And what we mention is a lot of it will go to bonds. Now, if you don't mind, can you pick up with. If it goes to bonds out of the stock market because people think company profits will continue to decrease from their increased operation expenses. How does that specifically impact mortgage rates?
- [23:11]
Christian Bachelder
Yeah, so, I mean, if. If money floods into the bond market in exact, you know, contradiction of what we said earlier, instead of the. The bond having to adjust the rate of returns, instead, this would drop the rate of returns because there's a surplus of buyers. So that means the bonds don't have to yield as high as of a return in order to incentivize people to buy it. Right. In the same way how real estate would work. Right. If there's a surplus of buyers, that would drive the price up. Right. There's. There's a. More buyers than there are sellers. So sellers could get a premium, whereas if there's a drop in buyers, they have to drop the prices. And that's the same thing that you guys see in any goods. Right? Basic rules of supply and demand. So if that money did flood from the securities market, which is just a fancy word for stocks, it will pivot over into the bond market, which is where mortgages lie. Right. Mortgages are part of the bond market and they are impacted by the buyer pool, whether that is increasing or decreasing, and that impacts what happens to your mortgage rates.
- [24:14]
David Green
Now, another point that we made was China could convince other partners. These are like future partners, hypothetical trade partners they have. They're like, hey, if you want our goods that are cheap, we need you to not make a deal with them with the United States, or we need you to sell your Treasuries to hurt them because they're hurting us by not buying our goods. That's basically where we're at.
- [24:38]
Christian Bachelder
Yeah. And that's where, where, really, where I think an interesting place that this could go is, is I don't really think the bond market's been weaponized in the past. Right. That's a, That's a very unique kind of Side effect that's stemming here that our bond market is so leveraged into foreign countries. Like, so you can look up the numbers, guys. Like Japan has a trillion. With a t. A trillion dollars. Japan has bought in our bond markets, right? If they sold 20% of that, that's $200 billion. That would evaporate out of the market. That is like incredibly powerful right now. I think when we set this whole thing up kind of with our monetary policy at this. I don't know if this is an oversight or just wasn't really considered this much because the US Was the dominant financial power. But really, guys, the. The U. S. Think of it this way. The US Bond market used to be seen as a safe haven because every country in the world trusted America. It was the safest place to put your money. It was the most stable currency. We influenced, you know, we. We underwent like a very low amount of inflation every year. Our assets held value. Well, our stock market produced. And we're the world's buyer, right? We're also backed by the largest single force in the world, which is the US Military. I feel like that might be shifting a little bit because if, you know, back in the 90s and early 2000s, like China, nobody wanted to invest in China because of currency manipulation and all the stuff they have going on. China's starting to make a case now. They're meeting with South Korea, Japan, you know, all these other countries that says, hey, the US Is screwing you over. We're developing this whole brics economy now, right? Those of you who follow international markets, you know, BRICS is. What is it? Brazil, Russia, India, China, South Africa.
- [26:18]
David Green
China, South Africa.
- [26:19]
Christian Bachelder
Yeah, yeah. And that's the main. Really, since the world wars, that's been the first time that a currency has really tried to challenge the US Dollar, right, In terms of like the. The worldwide, you know, monetary value of choice, right? The worldwide currency. And you know, the. The more and more we. We do things that, you know, piss off our friends, right? The more and more we start taking this grandstanding approach, I think the more leverage we're giving to bricks or whatever you know, follows out out of that. It really gives value that China could go pitch to places like Japan, right? A China could say, hey, Japan, just go sell 20 of your U. S. Bonds. As a agreement of this partnership that we're running into, we'll sell you X goods at X whatever, right? You know, they make whatever trade agreements they want to do, but as a condition of that, our largest bond holder has to liquidate 20% like that people don't understand what that would do. Like it seems like such a small little thing like, oh, Japan selling some debt, who cares? No, that is like incredibly powerful. Right. And then if China gets Japan and the UK and Russia and a few others to do the same thing, and China's also our second larger holder of bonds, like they can just do it themselves.
- [27:37]
David Green
When you say what that would do, I want to make sure we understand what you're referring to there, there. If they sell the bonds, we have to get someone else to buy them. We have to offer a higher interest rate to that new buyer to entice them to buy it because rates are higher now than they were when we sold them to Japan or whatever. Right. So let's just make up numbers. I'm going to pull it out of my mortgage butt here. We sold a bond to Japan at 3% and to get somebody else to buy it today, you got to sell it at 7%, which doubles, or more than doubles the actual monthly payment that we make on our debt to other countries, increases our own country's debt and puts us in a position that we have to sort of create more dollars to service that debt, which weakens the value of the dollar, which strengthens the position of the hypothetical bricks that we were just talking about. That's what you're getting at, right?
- [28:26]
Christian Bachelder
Yeah. And to go even one step deeper, we've experienced this not for the same cause, but we've experienced the surplus of bonds hitting the market before. Happened in 2008. It happened during COVID It's happened many times where there's no buyers for bonds. Nobody wants to purchase that. Right. In 2008, it's because the housing crisis and nobody had confidence in the mortgage market. Right. So nobody was buying them in covet. Everybody was scared. Right. Nobody wanted to do it. So what did we do? I mean, David, two of our favorite words are quantitative easing. Right. We developed this idea that, hey, the US doesn't need people to buy itself, debt will go buy it. And the US that's where you get into printing money. The US created currency to go purchase its own debt. Now you have a problem with, I mean, look at our monetary supply over the last 20 years. There's a huge spike, right. In the last 10 years that, that we've 5x6x7x something crazy, right? Our monetary supply in the last couple decades, you know, and that that means when we start talking about inflation and all stuff, it's because there's just more of it. There's More dollars. There's not physical dollars, but they're on a screen somewhere, right, that didn't exist before. And the Fed's job is to try and balance that. And it's, it becomes to be an incredibly hard feat because we'll, we'll, we'll carry this all the way through to my final point. Imagine if this was done very well by our, our enemies, right. Our foes. And if we were in a position where the US Economy was already getting a little shaken, unemployment was raising. Typically what the Fed does to combat a weakening economy is they drop interest rates. That stimulates people getting more money. It stimulates more money flowing through banks and into mortgages and into car loans, and it incentivizes people spending more. Right. More money changing hands in the economy. Well, let me play this out. If cracks start to show, unemployment starts to raise, a general decreasing in the financial security of America starts to take place, and then these companies come and slam bond sales. Well, now the Fed is saying, well, we can't lower rates because nobody's buying them where they are. Right. And we can't increase rates because nobody's employed. And you enter what kind of the most scary word is in economics, you enter stag.
- [30:47]
David Green
Stagflation.
- [30:48]
Christian Bachelder
Yeah, you enter stagflation, which is where there's runaway inflation, but there's also runaway unemployment. And you have both of those things that typically are counteracting each other, both moving one direction. If you guys want to study, use cases of where this has actually happened, go study Zimbabwe and Venezuela. This isn't a theoretical. It happened there. And their currency went from. I mean, I think Zimbabwe has like a 100 million dollar banknote now, right? A bill. Yeah, something crazy. It's like, it's just, there's like a hundred zeros on the end of their bank bill. Right.
- [31:19]
David Green
And there's different theories of why this happens, but just so that everyone doesn't panic and assume that's going to happen. My take on it, and I'd like to get your thoughts on, my take here, is that when you separate the dollar from the gold standard, you allow this to be a possibility. And then what stops it from just like a balloon that gets out of hand and keeps going higher is that the dollar is still related to productivity. But as we've become a country that doesn't manufacture things, we don't produce as much, we're slowly producing less and less and other countries are actually producing the things. The dollar is not tied to something of value like actual work. And that was the problem in Zimbabwe. They just thought, we'll just keep printing dollars and buying things from other countries. Well, at a certain point, like everyone's like, we don't want your dollars anymore. We can't use them for anything. And that's the big fear.
- [32:10]
Christian Bachelder
Yeah. And then you have Saudi Arabia discussing about not trading. You know, we're like the petrodollar. Right. That's a huge discussion we didn't even get into where basically we made this agreement, Saudi Arabia, that the vast majority of the world's oil trade takes place in US dollars. So in order to buy oil, a country had to have dollars. Well, there's talk about us not being the petrodollar anymore. And that means countries don't have to have a surplus storage of dollars. So now we're really starting to divert from what the core strength was of the American economy the last 40, 50 years. Right. And that's, it's, it's, it's super interesting and I think way more important than is being talked about for people to follow this. Be aware, watch things like this. And this is just two guys opinions, right? This is just David and me talking. Educate yourselves. This is, this is so vitally important into what the next five to ten years of our country and your life, you being our viewer is going to be impacted by. Right? And educating yourself so that you can properly plan, put your assets in the right places, you know, store, store your nest eggs where you think they're the safest. Right. I think is more important now than it's been during my adulthood at the very minimum and probably even longer back than that.
- [33:22]
David Green
Some of the things that I've noticed from everything that's come to the surface here is one. This kind of shows you where China's heart was at, that they were never our ally, they were using our man. I don't know the right word to use here. Foolish would be a mean way to say it. Naivete might be a nicer way to say it. But what we were effectively doing was selling bonds to a com. A country like China. So we go into debt, then with their money, we buy the goods that they made and sent to us. So they end up getting our money. That or they lend us money and now they, we owe them interest and we are paying them to make the thing. And they love that because they're catching up. Their economy is growing as we're coming down. At the same time, there's, I don't know if you want to call them rumors, but there's reports let's put it that. That they're supplying fentanyl to Mexican cartels to push up into America to make us sicker and weaker with. It's pretty obvious that their intention was to pass us up. So if you're wondering, why would we do this? Everything seemed like it was going great. Why are we messing everything up? I'm not telling you that you have to be happy about it, but there is a logic here that if we didn't do this, they were going to catch us up, we were going to be weak, we would have no leverage, we wouldn't be able to negotiate at all, and they might just stomp us out. Now, everyone's going to have their own opinions, and we're not here to tell people how they should think about this, but you should at least understand the motives of the two sides that are going on. And I'll wrap up with this part, Chris, unless you have anything else that you want to say. Have you heard of the guy, Brandon Biggs, that basically prophesied. Prophesied that he saw President Trump getting shot in the ear?
- [35:02]
Christian Bachelder
Did he really, Dude.
- [35:04]
David Green
Months before it happened, he described exactly what we all saw on the news. He saw the bullet whiz by his head. He saw blood coming down his face. He saw him hit his knees. And he said, like, President Trump's heart changed in that moment and it went viral when the assassination attempt happened. And everyone's talking about it, Right? If you just look at Brandon Big's Trump assassination, this is. It's all over YouTube. Right?
- [35:28]
Christian Bachelder
Check that out. That's interesting.
- [35:29]
David Green
I heard the dude say something else that he believes God told him. And he saw a vision where Bricks was literally trying to take over the US Dollar and Donald Trump was trying to stop that from happening as the reserve world currency. And he creates a alliance with Canada and Mexico to try to combat what the rest of the country was doing. And it is crazy to me how what we're talking about here looks like it's playing out to be exactly that as we're setting up trade deals with our partners. So if you guys just want an interesting conspiratorial venture, go check out Brandon Biggs on YouTube. Talking about, I think you mentioned, like, a rocket ship was the economy, and Trump was trying to put together this rocket ship using used parts, and he could never make it go as fast as it was. But at the minimum, it is entertaining to check that out. Christian, I know you got to get running. Thanks for being here. Can you tell people where they can find you if they want to reach out, get pre approved for a loan.
- [36:26]
Christian Bachelder
Absolutely. Guys, as always, the onebrokerage.com it's our company website. You can find out more about me or David there. You'd always email me directly, Christian. The1brokers.com and on Instagram I'm at the One Broker is my handle. Reach out any of those three ways you'll get in front of me.
- [36:39]
David Green
All right, folks, there you have it. This is the first time where we have basically done this structure where we put a shorter video on YouTube because we got some concerns that the videos were a little bit too long and people didn't want videos over there. But I didn't want to rip you off and give you guys less content that listed on the podcast. So going forward we will be putting a shorter condensed version of every single Mortgage Monday episode on YouTube and then you will get a longer version here on the podcast. So if you Normally listen on YouTube, just jump over and you can pick up where the conversation ended. But if you listen to this podcast, it will appear to you to be a seamless conversation. Appreciate you guys being here. I know if we're just being frank, this is a very difficult, difficult time. This is a scary time. This is a time where a lot of people are fighting panic. And if I'm going to be frank with you, I think it's wise to prepare for things to get worse. Things will get more expensive. Employment opportunities are going to dry up. You're going to see a lot of tensions rise. Social tensions, you may say. Economic tensions for sure. My advice to you is don't take the bait. Don't let yourself get overcome by pessimism and negativity. Don't let fear take root. It will turn you into someone that you don't want to be. And understand that oftentimes things do get worse before they get better. What I would love to see is instead of this dividing America between the people that are excited about the positive change and the people that are worried about the negative impact this is going to have on their own financial picture that we all bind together, work very hard to get America productive again, get us moving forward, run with full speed into whatever this new future looks like and increase our position for the country and we can be the best country that has ever existed. Appreciate you guys for being here. Let us know in the comments what you thought of today's show. If you want to reach out to me, you could do so@davidgreen24.com There's a little chat bubble. You can get a hold of me there. You can also follow me on Instagram in three places. David Green 24 is my main page. Please send me a DM and let me know what you thought about today's show and the format. You can find me at CTC Getaways, that's my short term rental property management company. If you would like to visit one of our properties or you'd like to have us manage yours, send me a DM over there. You can also look me up at Spartan Underscore Faith, which is my faith based mastermind, Spartan League, where we are committed to helping people have a deeper relationship with God and I lead that group myself. I'll see you guys next week on Mortgage Monday.