Here Comes The Boom, Increased Mortgage Demand

Added: 2026-05-14

[00:00:00]Give me one second.

[00:00:02]going to turn off the uh the Wi-Fi and turn on my mobile hotspot because I wanted to share with you guys some more of the idea of the credible threat theory that is now playing out and how it is that the inflation expectation is lowering the real interest rates and we could very well find where the economy is going to become stimulated and I think there is evidence of this now taking place like we could be on the cusp of the next booming economy. Now whether or not it booms in the way that people are anticipating or hoping, that can be a relative story to the position that you have taken, but I think it's very important to then look at what it is that's taken place within the economy when it comes to an unrestricted position of the Federal Reserve and the Fed funds rate. Now, I've left a couple of links down in the description. There are two uh news articles and essentially they are saying two key points to understand the neutral interest rate being unrestricted or neutral or even possibly getting to the point of stimulated and that is from the in the elevated inflation expectations. Now, we have to take this into consideration that if you continue to push this up, whether it's credible threats of war, credible threats of tariffs, credible threats of Fed independence, it doesn't really matter what the credible threat is so long as you have that inflation expectation that is persistent within the economy. Now, I left a link to this one. It says wholesale inflation jumped 6% in April on an annual basis, biggest increase since 2022. Now this goes along with a lot of the news articles that we are seeing out there in the mainstream media constantly pushing for this inflation expectation and now elevated within the people's mindset and obviously within the stats that are now coming out on the exact same page that I got this from this article there is this article that says mortgage rates move to the highest level in 5 weeks but home buyers shake it off. Doesn't that seem odd that the home buyers would be basically shaking off the idea that there is a move up in the interest rates? Well, at the same time, we have elevated inflation and inflation expectation that is lowering the real interest rates. And again, we have to understand this as the key tool when it comes to the Federal Reserve and their monetary policy is that most people will look at the Fed funds rate as the key indicator. Like when that moves, that is the Federal Reserve adjusting interest rates. But the interest rates move in a way that is somewhat stealth. Like people just don't recognize that there is a neutral interest rate that moves on an inflation expectation. And when that neutral interest rate moves ever closer to the Fed funds rate, that is lowering the real interest rates. And it becomes obvious when you start seeing more demand for mortgages. So, let's open up this article and read a little bit from it.

[00:03:13]It says, "The average contract interest rate for a 30-year fixed mortgage with con mortgages with conforming loans balance increased 6.4 increased. 46%." There we go. Man, I have a hard time speaking. It says applications for mortgages to purchase a home rose 4% in the week and were 7% higher than the same week one year ago.

[00:03:39]That should show the signs. Like, is it showing signs of awesomeness? Like, are we booming yet? No. We're on the cusp of it. This is starting to take place.

[00:03:48]People can recognize it. The Fed hasn't moved, right? The Fed lowered interest rates and then stalled out and they haven't moved. But yet there is a restrictive economy that is becoming less restricted since the Federal Reserve stopped lowering rates and the inflation expectation continue to rise.

[00:04:09]This is something that is now becoming evident within the demand for mortgages.

[00:04:13]It's not just people getting tired of waiting. They are now in a position in which that it is becoming more accommodating to them.

[00:04:21]potential home buyers shrugged off the current economic and mortgage rate uncertainties and returned to the market. This is something that we have predicted when it comes to a less restricted economy is that you are going to find it a hell of a lot more active than people would ever have given it consideration for since and anticipating that the Federal Reserve is going to move first. But that's not the case.

[00:04:47]We are finding people are getting their position ready for a a moment in time in which that the unrestricted economy is benefiting them. Most people can't see it. They don't recognize it, but yet here it is. It's starting to take place if you look for the evidence of it.

[00:05:05]Uh it says applications to refinance a home fell 1% for the week and were 20% 28% higher than the same week a year ago.

[00:05:18]Right? This is all people who are now positioning themselves. very very few people recognize it, but it's people who have positioned in such a way that they are now getting ready for that low interest rate environment that may even very well could turn negative.

[00:05:35]All the borrowers out there who have had a fixed rate on their in on their in uh purchases of their their loans will essentially get a stimulus package delivered to them when those real rates go negative. It won't be obvious, but it will be once you understand how the inflation expectation is eroding their debts away. If you were an investor who is anticipating getting a 5% return, but there's a 6% interest or inflation rate.

[00:06:05]Think about it. You're getting a negative 1% real return. Well, if you're a borrower, this is an awesome position to be in. And this is what's starting to take place. You can recognize it within these two articles, right? elevated inflation while at the same time people are taking advantage of the mortgages in a low neutral or low interest rate environment.

[00:06:28]It's not a low neutral. I mean, it is a low neutral interest rate environment when you think of our star, but the neutral interest rate is elevated and moving ever closer to the Fed funds rate. And we very well could find because nobody knows exactly where neutral is, nobody knows exactly what the inflation is, and nobody knows exactly how restricted the economy really is. But when it becomes evident within the demand for mortgages, you can find yourself in a position in which that the next housing boom could very well take place as the inflation expectation runs persistently higher if the Fed stays still. You know, this is really going to to be I'd be probably one of the stealthiest ways of stimulating the economy anybody had ever seen.

[00:07:16]Right? And again, like most people are going to think, well, that doesn't really benefit the average working-class person. And you're right, it doesn't.

[00:07:22]Right? It gives you the ability to have the transactions be more frequent out there, so you might be able to find a job easier. Like that might take place, but as far as the ability to like have a benefit from this unless you are positioned in assets or positioning yourself into assets, it's probably not going to do you much good. In fact, it's probably going to be pretty painful as the K-shaped economy will continue on from this and you will be on the bottom side of the wedge. But if you can recognize what it is that's happening, you can cut back on your expenses and start positioning yourself into the asset allocation. This is very important to recognize that these two articles coming out at the same time, literally stacked on top of each other at CNBC is should be a warning sign to the low neutral interest rate environment or a negative real interest rate environment.

[00:08:14]I I know that this stuff is difficult, guys. I get it. It's taken me 20 years of research to try and, you know, understand how it is that the Federal Reserve is conducting themselves. And most people will act very superficial on their channels when it comes to what it is that can be done. But very few people are going to explain it in the ways that I have.

[00:08:34]Very few.

[00:08:36]And I know that it's difficult to retain the information, but that's why we are constantly out here sharing it. That's why I built the UEIE community at the UEIE University at the school community.

[00:08:47]There's a link down in the description.

[00:08:49]You can go to that community and ask questions and get good answers from people who have studied this credible threat theory, who have internalized it and who are positioning themselves on account of the understanding of the credible threat theory and they're willing to share how it is that that's working for them. That's all found over at the UEIE University. There's only one place to get it, right? And I can come out here a million times in a row and share this information over and over again, provide you with the evidence of it. But until it's internalized, there's nothing that you can do to get any benefit from it. You have to have it inside. All right? You have to be able to recognize what this means to the economy when you see high inflation expectations and an article delivered at the same time you're finding mortgage rates demand going up, right? Even though the mortgage interest rate is rising, the demand for it is going along with it. Why? Because the real interest rates are falling. And this is so important to understand. Most of this would be so counterintuitive to the initial thoughts of how the economy works that once you break it down and see it, you realize that we are literally less than a fraction of a percentage of the people out there who have internalized it in this fashion.

[00:10:04]It's good stuff. Really good stuff.

[00:10:08]Uh, I'm under my truck working. Really need to keep at it. Keep going, Allnighter, man. Thank you for being here. Hey. Hey, everyone. Hey, Jack.

[00:10:16]Thank you for being here. All right, Big Hill. Happy hump day, friends. Thank you for being here, Big Hill.

[00:10:24]We got Pete All Nighter Hider and y'all.

[00:10:30]All right. Raptor moveing a bunch of crew today. Hi everyone. We got rinks rentals. Thank you so much. Will the boom affect the bottom 80% any meaningful way? I mean other than being able to access a job easier maybe to increase your pay just a little bit better. But no, it's not going to benefit you in any meaningful way if you are not positioning yourself into assets. And most of the people at the bottom 80% are not doing that. So here it is. If you look for your opportunity and you're in the bottom 80% and you have debt and you and it's consumer debt, not good debt, but bad debt, and you're going into an unrestricted economy that has a lot of transactions that are happening essentially heating up, this is your opportunity to go out there, grab that money as fast as possible while it's easy access and jobs that are available and pay down that debt. Do not take on more debt thinking that you will always be able to find a job to pay the debt off. That's a bad move. Pay off that debt, that bad consumer debt, and start positioning yourself into some sort of asset. Now, this is the tricky part for a lot of people is they want to know the magic secret. There is none. There's no magic secret. There are assets that have yield and there's assets that are speculation.

[00:11:43]And to understand the difference between the two is very important. One will pay you regularly. Dividend paying stocks, rental properties, a business, something like this. This is yield that is coming in. What is your yield? How much do you put to it? And how much of a return do you get from that? Or you can speculate, put it into gold and silver, bitcoin, you know, something that is going to have some sort of value going into the future. These are essentially only two ways of investing, but only one of them is an investment. The one that actually pays you. The other one's a speculation.

[00:12:16]Both of them have their points and purposes. If you're getting into speculations, think about that. you are trying to sell this for a higher price going into the future. That means you have to find somebody who will actually give you money for it. If you have something that's an investment, something that has a yield to it, it's paying you regularly. Think about that.

[00:12:34]That's money coming in that you get to use to either put back into an investment or go to use for your existence, buy food and pay rent and stuff like that. So understand the difference between a speculation and an investment is very critical to how it is that you're going to position yourself going into the future. Now again, if you are broke, average, everyday person who has very little money at the end of the month, this is a difficult road for you to go down because it's going to get harder going into the future. It's not going to get easier. What's going to get easier is your ability to acquire money from working. But that money doesn't provide you with much more of an existence if you level up your standard of living. If you keep your standard of living low and you become more industrious with that extra money, you know, all the money that beyond the money you're already making, if you take that extra money and you deploy that to something out there that is going to have a return, again, a speculation or an investment, this is the position that you need to take from now on. If you do not go into that, then you will be finding yourself on the bottom side of the wedge. And there is no end to that.

[00:13:42]You have to continue on with it no matter what. Keep your expenses low and position yourself into assets from now on.

[00:13:53]That's it. Right? And there is no endgame. Like it's forever, right? And that's what you have to teach the kids and that's what you have to teach from now on to all the people out there because the moment that they step into a luxurious experience and buy themselves a new truck, it's over. separation begins and the whole problem will start to fall apart on the people and you will find the wedge of inequality driven deeper. So this isn't this is the only way to deal with it. Right? If you look at it in this fashion, you as an average everyday person will have access to a job easier. That's the only benefit that you will get.

[00:14:31]What that what you do with that job is up to you, right? That's your business.

[00:14:39]All right. Inflation took care of my extra money. Yeah. Then that hat trick happens. Boom. New currency happened three, four times in the US history.

[00:14:48]Yeah, I would I would say that there's probably going to be a tokenization of the dollar and a new essentially a new currency being used. I I would go with that. Agreed. Fiat currency always racing to its intrinsic value of zero.

[00:15:03]But the only problem with the idea is is that the Federal Reserve was begging, wishing and hoping for an inflationary scenario. And to understand what it is that they are really facing from a problem of deflation as opposed to inflation is really the key to understanding the credible threat theory. You know, to think that, you know, the dollar is just on its way to zero just because is going to be very complicating to understanding how it is that the monetary policy is working because that is really more of a benefit to the monetary policy than it is like a deterrent. Booming real estate sales, fictional transactions or fractional transactions, sorry. All right, then. Uh, let's see here. Hi, Simon and everyone else. Thank you, Ghost Town Treasure Hunter. Thank you so much for being here.

[00:15:54]All right. I feel Bitcoin is going to take off. What do you think? Pretty soon. Um, well, I mean, I like the idea of holding Bitcoin. In fact, I want to have one Bitcoin in my life, and I'm hoping to get there at some point. Now, whether or not I can, I guess that's another story, but at least I work on the idea of getting there. Now, Bitcoin, I have very little expectations of it in the future. Like, I don't know what it's going to do, you know? I mean, I I hope that it's going to do well. I mean, I don't know.

[00:16:24]Point being behind it is that it's a speculation just like anything else is, right? And if you're speculating on the idea that it's going to somehow, you know, be this billion dollar item that is going to just be awesome for everybody, I would have to think, man, what is the economy really going to look like if that was to take place? It would probably be pretty difficult to operate in. So, all right. Aloha from Hawaii.

[00:16:54]All right. Thank you for being here, financial firefighter.

[00:17:06]All right, let's see.

[00:17:13]I guess that was put on there. Okay. A lot of people would be very upset if we made Bitcoin our currency. Yeah, Bitcoin I don't think will ever be a currency that is used on that kind of level. Like it's, you know, the common currency like things are priced in Bitcoin. I can't imagine that. Real estate is definitely starting to become a buyer market in a few mile radius. Just around my subdivision alone, seven to eight properties for sale for the past few months. Three, four bedroomedroom homes.

[00:17:42]Yeah. And I'm not, you know, I'm not getting to the like idea that we have like all of a sudden like we have this booming economy now. We're on the cusp of it and things can change quickly, right? Like if inflation expectation was to dramatically fall for whatever reason, then the economy is going to become very restricted again. Now, if the inflation expectation continues to be persistent, which it seems to be, especially, you know, when you talk to the people out there, then I can only assume that the Federal Reserve continuing to stand still will create a very accommodating economy and the results of that will be 6 months to a year from now. Positioning yourself accordingly for that really people are going to look back and go like, "Oh, who knew?" Right? But to understand like if this is continues, that's the that's the whole thing. That's why nobody knows that the market's going to go up, down, or sideways. And I don't care who you are, right? Nobody can predict the future. I'm just assuming, very much assuming that there is going to be elevated inflation and inflation expectations going into the future. I think that would be very difficult to remove from the people's minds, especially when I show up to work today and see that I got to get gas for the Suburban. It's at 525 a gallon now. It's like crap, right? Like I mean I for so frustrating. So for me, even that alone, it's just like people's expectations are even if it was to go away for real, their expectations will probably remain for quite some time because they are going to be very sensitive to the idea that there is going to be persistent inflation going into the future. They know it, they feel it, they don't think anything else. And with that, I can only assume that if the Federal Reserve stands still, this economy is going to become unrestricted. It's going to become accommodating, right? That's like that's the way this thing is working now. It's been working that way for quite some time. We are recognizing how that is happening. Most people have no clue of what it is that's really taking place and they just want to blame it on manipulation and it's all the orange guy's fault or whatever. Like I mean it's just it those those kind of accusations are are not useful. They're not helpful. And I don't know why it is that people would want to take in that sort of information and then try to conduct themselves in an in an investment kind of quality behind that.

[00:20:08]It just I don't get it. Like to me I look at what they're saying there and I'm thinking does that raise or lower the inflation expectations? Because that's the real issue. Okay. is is I mean is it going to happen or isn't going to happen. I mean, you know, regardless of the pain and suffering that is that comes from it, which is very important, but it's not important in the sense that does this create an accommodating or restricting the economy, right? Like that part is the important part for me to nowition for myself because I can't stop pain and suffering from occurring outside of my existence, right? I mean, I can't do that, you know?

[00:20:50]All right. Great inflation under the war. Are you familiar with who is this?

[00:20:56]Uh are you familiar with the exact situation unfolding in the multif family dwellings? Any input would be appreciated. Well, again, I mean, other than the things that I am reading out there, I I I could only assume that with the overbuild that had taken place during, you know, the during the COVID times when rental properties went out of control, that you're going to find some malinvestments in some areas on account of it. A lot of those projects couldn't even be completed. Like, we had one here that just basically ran out of money because the building costs had gone up so much.

[00:21:29]I think honestly that it makes it very obscure to try and get any kind of real like understanding of what this is going to be like going into like say five, six, seven, eight years from now. So, it's going to take like you know an equilibrium of sorts coming from the overbuild to the crash to, you know, essentially finding its spot again. And I know that's kind of like a vague answer to think about, but really if you had such of a bull whip effect taking place, it's going to have like this over supply under supply kind of situation that stretches out for a long time before you finally find the equilibrium as a result of it. So could you find like temporary swings in in areas of like almost like devastating qualities?

[00:22:15]Well, yeah. I mean, malinvestments happens in particular areas like how do you stop it, you know?

[00:22:22]Well, other areas don't face the same consequences from that. So, is that going to happen? I believe so. Yes. And will that take years? Yeah. I mean, who knows? It could take a decade to find, you know, true equilibrium in some areas that had some dramatic over supply to under supply situations happening. Yeah.

[00:22:41]>> Again, like to understand the bull whip effect is like it's very hard to predict and know what it is that people are going to do and how that's going to result. Yeah, if you're right in it and you're in the distribution and you're near the manufacturers and you're near the retail, you know, portion of it, then you can get a probably a better understanding of it all. But to know that it's like very obscure in every position like from manufacturing to wholesaling to distribution to that is happening out there to know like every single piece of the market completely is very difficult task or considering that each one of them has its own issues within it. Yeah. Do you think housing will pick up soon? I do. I think transactions will be picking up soon. I think the act the idea of the mortgage applications increasing and this is why I share these two articles with you right is because it's showing evidence that the m that the mortgage applications are rising right the the amount of them the demand form is starting to increase is it awesome no not by any means but is it happening that's the key thing like look at the trajectory of where this is going is this moving up or is it moving down excuse me if the demand is moving up then you're assuming that the idea that the people are going to be benefiting from the situation is probably getting better too, right? Why else would they be asking for a mortgage? Now, why would that be the case other than the elevated inflation expectation has lowered the real interest rates making the economy less restricted and this is evidence of it now taking place, right? Is it less restricted? Maybe. Is it going to become accommodating? Who knows? inflation expectation needs to be pushed a little higher, I would assume, causing that neutral interest rate to rise and essentially a standing still Federal Reserve who doesn't move the Fed funds rate will find themselves accommodating, right? Like this is happening. This is I mean I've been saying it like every single video for like four years now, right? But definitely for the last two.

[00:24:40]This is I go back and I look at my videos that I have been putting out for the last two years and they literally almost all of them all of them say the same thing, right? They say the same thing over and over again. And what is the result of this that we are now finding, right? The economy is becoming less restricted. The mortgage applications is a sign of that. The next thing you're going to start to see is buyer traffic at the home builder sentiment start to increase. Right? When the home builders see it happening, they're going to start to start to talk about it. Is this preliminary to that taking place? Well, I would assume that there would have to be an an application for a mortgage in order for the builder to say, "Hey man, buyer traffic is starting to increase."

[00:25:22]So, this might be the preliminary sign to that buyer traffic for the home builder sentiment. When you see home builder sentiment take off, watch lumber.

[00:25:31]Watch the lumber prices, right? All this stuff is starting to line up. Now whether or not it takes place again nobody can predict the future but here it comes. If the Fed stands still and we keep pushing this inflation expectation look for these things to occur.

[00:25:50]All right.

[00:25:55]Did you talk about the high PPI of 6% high inflation is coming? That's yeah, that's exactly what one of the links down in the description is is the article too, right? Is to talk about how it is that inflation has risen. That is, I'm telling you guys, if the Fed stands still, this is going to make the economy less restricted. And those mortgages, I believe, is as a preliminary sign of that taking place.

[00:26:24]Here comes the boom.

[00:26:29]push that inflation up to 8%. Watch what happens, man.

[00:26:34]If the Feds stand still saying, "Oh, well, we don't know. We got to go see through. We don't know exactly what's going to happen with all this stuff."

[00:26:40]It's going to be super accommodating.

[00:26:44]And we'll see them. I mean, whether or not that results in house prices taking off, I mean, I don't know about that part, but you're starting to see the transactions pick up if you're seeing the mortgage applications increasing.

[00:26:58]Uh, how does Bitcoin play into all this?

[00:27:02]It's a I don't know. I don't even like to try and associate what Bitcoin means to all this. I don't know if I would necessarily do that. Bitcoin's on its own, right? It's incredibly volatile, but it is an asset of sorts like anything else is that's outside of the dollar. And if you think about what it is that happens in a low neutral interest rate environment or what happens when the Federal Reserve becomes accommodating, I would only assume that Bitcoin would probably end up benefiting as a result of that. In fact, all assets end up benefiting as a result of that.

[00:27:38]But considering it being an incredible volatile thing, like I don't give it any kind of consideration outside of a position that I dollar cost average into with the hope of one day owning one Bitcoin. If it goes to a million, billion dollar, whatever it does, hey, that's pretty cool, man. I'm glad I positioned myself. I've already missed out on so many opportunities in cryptocurrencies to make a bunch of money that I figured, you know what?

[00:28:02]That's it. I'm done. I'm going into Bitcoin alone. I don't care about the rest of these altcoins. I buy them occasionally. I might pick up one or two of them, 50 bucks or whatever, but I am no interest in trying to figure out what the next, you know, awesome cryptocurrency, you know, phase or fat is going to be or anything like that. I I, you know, whatever it is, it is.

[00:28:24]Bitcoin again to me is just no real expectation, no anything else. It's just a position that I can take and if it does great, awesome. Maybe I'll do something smart with it. Who knows? But I don't give it any kind of consideration. It's not going to be a world reserve currency. It's not going to do anything like that. Right now, is it going to have an important role?

[00:28:45]Yeah, I think it could be. That's why I'm getting one, right? That's why I think, man, if you have even a half a one, I mean, that's nothing that Think about it. If you have a half a Bitcoin, I have a half a Bitcoin, right? That's what I have or the equivalent to. I mean, whether or not I actually have it, considering I have most of it at Coinbase, but I have access to a half a Bitcoin right now. That's something that less than 42 million people could do.

[00:29:11]Think about how unique of a situation that is. That's less than 42 million people could ever do that ever. In the history of the existence of the world, less than 42 million people will ever be in that position. All right? Could ever be. And in fact, considering how spread out it is, having half a Bitcoin is incredibly unique. It's something that very few people will ever do, ever, ever, ever in their existence of the history of time, will very few people ever get themselves into a half a Bitcoin.

[00:29:42]Having that is like even like if I never buy another Bitcoin from now on, I I think about how unique of a position nobody can really do it at this point.

[00:29:52]Nobody. Like a handful of people could do it, but how many people are going to drop 40 grand on Bitcoin right now?

[00:29:58]Unless you are incredibly committed or super rich or something, right? The average everyday person never going to own that much ever.

[00:30:08]All right.

[00:30:11]Not your keys, not your crypto. Yep.

[00:30:15]Uh I suggest you learn to produce your own electricity. Electric.

[00:30:21]All right. Uh, think solar. It has a place if you are out of the country and have to pay a trench or run high voltage to a home. Oh, yeah. I don't think it is worth to buy in a suburb. I ran the numbers a ton.

[00:30:40]All right. You're making me want to buy more Bitcoin. Yeah. I mean, I don't discourage people from buying Bitcoin. I mean, I I I buy Bitcoin. I think Bitcoin's great, you know. I mean, it's the people who like talk about how Bitcoin is going to be the next world reserve currency. That you can Yeah, that part you can have. I don't whatever.

[00:31:04]Yeah. All right, I think I got to go, guys. Yeah, I got to go. It was a wonderful talk here. I think we should keep up on this understanding that we are going to be looking for the inflation. At the same time, we are going to watch how it is that people are going to be using mortgages to get into a cash flowing asset or get into an asset because mortgage is essentially the cheapest way to acquire an asset.

[00:31:28]Especially rental properties, cash flowing assets. There's really no other way of becoming, you know, the super wealthy. That's how I've all the people I've ever met. That's how they do it.

[00:31:38]But to think about this in the in the understanding that the Federal Reserve is standing still with their Fed funds rate. There is a neutral position. That is when the Federal Reserve is neither accommodating nor restricting the economy. It's when that Fed funds rate is neutral. That rises on inflation expectation. Well, recently that neutral interest rate has become if not already at the Federal Reserve's Fed funds rate and it could with elevated inflation continuing into the future push above the Fed funds rate and cause the economy to be accommodating. Now, that is something that very few people are going to describe and I believe that we are on the cusp of that very thing. You can recognize it within those mortgages, those mortgage application increasing the demand form. That's evidence of it happening. Is it extreme? Not yet. Are we on the cusp of it? I believe we are.

[00:32:35]Again, that's evidence of it happening.

[00:32:37]All right. An educated economist, you guys let me know.