DM 081823 Fullsy

you Hey everyone, and welcome to another episode of Dirty Money with me, Ben Hedges, and also with Mike. How are you doing Mike? I'm doing great. How about yourself, Ben? Good man. And we have a lot of interesting stuff to talk to, to talk about today. It sounds like there's a bit of a global financial meltdown going on. We've got China's financial crisis in their real estate sector. We've got Russia's central bank raising their interest rate by 3.5%. We've got a recession going on in Peru and several other countries around the world, and a lot more interesting stuff to talk about today. But first of all, if you're listening or watching on any of the major podcast platforms, do give us, do follow us, leave us a five-star review, share the show with your friends. And if you're on any of the micro content platforms like Instagram reels, TikTok, YouTube shorts, our handle on there is dirty money show. So do check us out on there as well. But first of all, Mike, something that you wanted to talk about, I guess, which is this Peru recession. Why don't you tell us what's going on over there? So Peru officially went into recession, um, with the second quarter. Uh, the, the interesting thing about it and the reason I wanted to talk about it, Peru has been the fastest growing economy in South America for this century. So since the year 2000, Peru has just been on the up and up and up and up. Obviously they've hit some really, uh, you know, down marks with the rest of the world in 08 and in 2020 with COVID. But fundamentally Peru has been the star child of South America for the last 20 years. And now they're officially in a recession. They, uh, they shrink by 0.56% last quarter. And so it's interesting to really look at how they're, they're doing things. And what's happening is, is like in June, 70% of their fishing sector was declined. Went down 70% just in one month. And, uh, that's, that's crazy to think about that. You know, this, this is a country that really thrives on fishing as well as manufacturing and their manufacturing went down 15%. But where they did see an increase is mining and oil. So Peru, Peru is kind of taken, taking it on too with, I want to equate some of that to the Euro zone kind of going into the recession this year. Uh, and the beginning of, or at the end of last year with Germany, you know, technically Germany's not in a recession because they didn't lose anything last quarter, but let's be clear, 0% is flat. No growth, I would consider still, still receding from growth. But, uh, yeah, we don't really feel it here in the U S cause the U S economy remains, you know, reasonably strong actually, but you don't really realize that a lot of other countries are actually dealing with recessions right now. Yeah. And really the, the U S has got some faltering numbers that are coming out right now, we're looking at earnings reports and things like that, you know, they're really weak for Q2, I think Q3, Q3 is going to be just as weak and, you know, that soft landing might actually, uh, be a little harder than we expect, especially for the rest of the world, you know, that's, that's where I see it really taking place, but you know, all 20 Euro zones are in recession. You've got places like Venezuela and Argentina having record inflation. I mean, we talked about that a few weeks ago with Argentina. And so now we're really starting to see. Yeah. So if you look at the, the growth of the GDP for Latin America for the last, you know, 60 years, it's pretty, pretty slow, but you can see those red dips. If you scroll down a little bit, you can see those red dips where it's a recession. So you got like 1983 when you, we saw, when we saw interest rates on mortgages in the United States at 14 and a half percent, and then you've got, you know, again, uh, 1990 is that time where we saw, uh, communism kind of fall in Russia, West Germany and all those places. So, so there was a kind of a teetering because really they were just cooking all their numbers to begin with. You have places like in the Soviet union where they go, we make ball bearings and then we ship them over to this company where they actually melt the ball, melt the metal down and send it back to us and that's considered growth. And the truth is there was no value. So when you, when you really look at it, it's like now, now that that truth came out, you can see a little blip in 1990, but 2008 world recession took place. Everybody kind of knew about that if you were alive for it. Um, and now, uh, COVID, which was a complete cliff cause everybody got locked in their houses unless you lived in Latin America. Um, and so now we're starting to see that, that COVID return bite, you know, where, where we dropped so far down, we had to shoot back up. There was just no other way to do it. Everybody went back to work who wasn't in work. And now we're starting to see that kind of go downhill as these policies come into play for different countries and different communications and trying to figure out where their monetary policies come into play and how much restriction they're creating and there's a lot that's going on there and in Peru, you know, you have, you have this industry that's built around really commodities and when those commodities fall, then their economy. They do great chicken though. Peruvian chicken with the green sauce. Yeah. There's some good spots in the city. They should start exporting more of that. You know, I think they'd make them a lot more, a lot of money. I don't know. Uh, I think America is only allowed to get chickens from China, right? All right. So speaking of China though, um, let's get into talking about China cause China's in some, some serious trouble. And I've been, I've been looking at this, uh, this past week. So there's a whole financial real estate meltdown going on in China. It started in the real estate industry. Now it's spreading to the financial sector. Um, so first of all, we have a company called Biguayuan or country garden, which was until last year, China's biggest real estate company. I think from 2017 to 2022, it's the biggest real estate company in China. Uh, they built, you know, huge numbers of homes. I think they had something like 3000 different projects active across the whole of China. Uh, that's four times as many as Evergrande, which was the big real estate company that was, uh, you know, started to collapse last year. And, uh, we got some update on Evergrande as well coming up too. Um, but let's focus on a country garden. So this, this company, um, they admitted that they're probably going to lose $7.6 billion in the first half of 2023, which is, uh, which is massive. All right. For, for a loss, they were marginally profitable last year, but now they've, they've swung into this massive loss. They actually missed a coupon payment to their bond holders on August 7th. Um, so that's like an interest payment that they missed. If they are 30 days late on that payment, then they'll officially be in default. Moody's downgraded their credit rating by three notches. So they went from, I think it was CAA1, uh, down to B1 anyway. I forget what, but it's three notches anyway, which is a serious downgrade. Um, China's richest woman who is the largest shareholder of this. Uh, I forget her name. Her name is Yang Huiyan. She actually sold $660 million worth of the stock back in December. So she knew the writing was on the wall. Uh, she sold it back in December. The stock actually dropped 16% the day after she sold, but that wasn't the real implosion. The real implosion was, you know, now August, August 7th, when they started missing, uh, bond payments. So that's Country Garden. Um, so the background to why this happened was that, you know, China's real estate market has been increasing in value for the last 20 to 30 years. And a lot of the developers have become incredibly over leveraged. They've used leverage to create these huge product projects. And literally if the price, if property prices fall or demand falls, uh, they cannot meet the payments on this debt, all this debt that they've taken out. So that's basically the problem they're faced with now, China after coming through the pandemic and then a lot of lockdowns, which were well, technically after the pandemic in the West, although maybe the pandemic was still going on in China, I don't know. Um, but having kind of totally trashed their economy now demand for new homes is way, way down. And because demand is down the prices of the homes that are selling has gone down as well. So it's like a double whammy and these companies now can't meet the, uh, the bond payments, the interest payments on their bonds. So it's, it's, it reminds me of like Tokyo back when they had their, their housing boom where we're on paper, the properties in Tokyo were worth more than all of the United States. Uh, um, you know, that happened a while ago. And so it's, it's really interesting to look at, you know, someone told me in Shenzhen, they build apartments, buildings, and then three years later, they tear them down to build another one. And no one even lived in them. Yeah. There's a lot of ghost cities in China. It's totally empty. Yeah. So, so really how do you trust anything coming out of China when it comes on numbers or everything's just like cook the books, cook the books, throw it into the pile. No one can go and see what's going on. But yet over the last 15 years, you had all these companies throwing hundreds of millions and billions of dollars into investing in China, thinking that they were going to get somewhere, but really they're probably on backdoor stuff where communist, it's financed by debt. Yeah. It's all debt. So that, that's what I mean. Like it's all it's it that's, that's the collapse that we're, you know, we're approaching a Lehman's. Right. Well, let's talk about that because there's another company now that's starting to collapse, which has been called China's Lehman. Okay. Um, so you've got these real estate companies that sell their debt to bond holders, and then there's a load of other companies. China's what they call China's shadow banking sector. All right. Which are these trusts. Okay. So they're not traditional banks, but they're trusts that manage the funds of both companies and high net worth individuals. Okay. So think like high ranking communist party members and high ranking businessman in China. Um, so you've got one of these trusts called Zhong Rong, which, uh, it managed 87 billion worth of funds, uh, for companies and higher ultra high net worth individuals by the end of 2022. Okay. So that's the most recent figures we got. They're owned by another company called Zhongzhi. Um, but let's focus on Zhong Rong, cause this is the, they're a trust and basically people invest in these trusts for a sort of higher than average return for basically high yield investing. Okay. It's a little bit shady. That's why they call it shadow banking. I guess they're able to do stuff that's not as a regulated as a traditional bank, right? And because property prices have been going up because you know, the economy is doing well, uh, they haven't had so much of a problem in the last couple of decades, but now, um, you know, companies are now companies like country garden are missing their bond payments. Well, Zhong Rong now is missing payments to its investors. Okay. So they, um, they miss payments on up to 30 products as of August 10th. And there was actually a protest outside their headquarters in Beijing. Now the company has, they, they basically kind of denied it. They sent out a statement saying that, Oh, um, people sent fraudulent, uh, letters to investors saying that we weren't going to pay them, but we actually are, but they still haven't paid these bonds. Um, so basically we're now seeing, you know, the, the real estate sector is kind of the catalyst, but now the companies and the individuals that hold the bonds, their banks or their trusts are not paying the investors. So you can see it spreading to other sectors of the economy. This sounds eerily familiar. Um, like the U S subprime mortgage crisis, right? It started in real estate. It spread to banking. Right. So, so you have a comp, you have a banking company that doesn't have liquidity, liquidity, but it has assets. Lehman brothers, anyone, anyone? And now you have an entire sector that cannot support that liquidity because there's no one to liquidate the assets too. Right. So, yeah, so this, this is a systemic issue that China's facing. And, and you'll see that as a theme actually, just in a minute, when I talk about Evergrande, but, but continue with what you were saying. So this is a systemic thing that China's facing right now. And it's really, it's, it's, it's got me thinking in the back of my mind, like a lot of the people and companies, they'll look at lost revenue and they won't pay attention to like making serious cuts until three or four quarters after they see the revenue drop, you know, Oh, okay. Two quarters dropped revenue, bad third quarter, drop revenue. Everybody who runs a company is going, how do I get rid of my cut it? How do I slash, how do I get rid of employees in order to keep money, keep financing in order? And so it makes me think that, you know, how long have they really seen a loss for? I'm going to go with two years because anything that, that the communist party or Chinese business publicly puts out there, you have to like 10 exit or you have to divide it by 10. Yeah. All right. As soon as the books are cooked. Yeah. And so it's, it's cooked either for them in a negative way or cooked for them in a positive way. And so, so really like in our, in our economy and in the West is the economy. We would look at three quarters of loss revenue as time to make cuts dramatically with, with our spending. And so now you look at all of this is what's going on and then it's very systemic and how are they going to liquidate it to survive, but the U S I feel is, is got some of this going on with our commercial assets right now. When it comes to real estate, but the Chan, the thing that's there is we're fighting that because the housing market is still, you know, still a very heated place where, where things are selling for a lot higher than they were two or three years ago, and it's still slowly seeing that that value not go down and staying. Actually pretty solid. I think it only went down by 0.7% this year. So it's stabilized at the value it's at. So we're able to fight our, our real estate issues with another piece over here. It's like, this looks like systemic problems across the board. So let's, let's talk about Evergrande now, cause that was the original Chinese real estate company that went bankrupt. Well, not bank. It had its crisis like last year. So they've actually filed for bankruptcy in New York, which you might hear that way. Wait a minute. Why is a Chinese company filing for bankruptcy in New York? But they have some dollar dollar bonds that are sold to us investors. And so they filed in New York to protect their, you know, their assets from dollar bond holders, you know, seizing it. So it's, it's, it's understandable. It's, it's pretty normal, but they're going through a whole restructuring. So basically they, it's funny, like just when this whole other crisis happens with this other company, it's like, Oh, here we go. Evergrande again, they filed for bankruptcy. And like you were saying, Mike, about having assets, but no liquidity. So there's actually a building in Hong Kong that Evergrande bought this 1.6 billion us dollars and they, the, the creditors were able to seize it. They have not been able to sell it, which is the crazy thing. There's no one to buy it. So it's a huge problem. Who's spending money on buildings in big cities right now? If anything, they're, they're trying to, they're trying to pick up properties for really cheap. I mean, if you look at San Francisco, I mean, buildings are selling it five times less than they were purchased for five years ago, three years ago. And so Hong Kong is going to be in that same situation. I mean, can you imagine, I got your building back. It's not worth anything. No one's to buy it. So it's like the value of something is based upon what someone is willing to pay for it or what entity is willing to pay for that, that other piece. And right now, the way it's looking is no one's willing to buy anything in China. It's it's the disaster zone and it's only getting worse and they're going to have to raise their interest rates. The Yuan right now, as of today is at the same value it was in 2007 versus the US dollar. So as much, as much as they hold the value of the US dollar, you know, the Yuan is very, very controlled. Yeah. Put it that way. They're that, that currency is. It fluctuates within a small range where they allow it to fluctuate. Isn't it? Yeah. Yeah, exactly. But that range has reached its top and its bottom in the last month. So, you know, I think that, you know, we were hovering at what, 6 Yuan to a dollar for, for the last, before this year, like, and now we're at eight. And so, and that's a number they don't want to see happen. And really it's going to get up to 9, 10, 11, 12. Once the, once things start collapsing, I mean, the communist party is going to try to hold on as much as they can, but when these, when these large companies that have these huge factories in these buildings that are US based, they're like, Hey, I need to go to China to check on my factory to make sure that it still has output because I'm not getting the products I ordered, you know, I have, I have a friend, they ordered packaging for their company in California. And they've been told for like a month now that it's been lost at port, you know? And that's, that's, I, I talked to a couple of other people and they're like the San Francisco port's the worst. Everything seems to be getting lost right now. And I was like, I don't think stuff's getting lost at port. I don't think it's getting here or being even made. Yeah. So, so it's really, you know, once, once American investors start saying, all right, I need to catch a flight to Beijing, or I need to catch a flight to Shenzhen and figure out where my investment really stands, then they're going to start sending back real reports. We're probably a year out from that, maybe nine months, but that's when you're going to really start to see that yuan collapse. Speaking of a manipulated currency, let's, let's move on to talking about the Russian ruble, because this one's, this one's pretty interesting. Okay. So this happened a few days ago, the, the Russian ruble hit 1 cent in value. So it's now a hundred rubles to a dollar, actually it dipped below 1 cent in value. And that's down from 1.8 cents in 2022. Okay. So just to give you a sort of a gauge on how, you know, the ruble works, you can pull up these currency graphs, actually, that we've got in the doc, Brian, if you want, so that people can see like the two year chart and stuff. And yeah, you'll be able to see the level at which the, the ruble was at back in 2022. And so, but it's, it's a managed decline. Okay. So all of the, the sort of analysts and stuff, they seem to, this is what they say that it's, you know, the, the Russians, the Russian government, it actually benefits them to have a weak ruble and looking back in history, every time they fought a war, they seem to have a weak ruble as well. Okay. So basically they've, they've allowed it to decline. And the reason for that is that they sell natural gas and oil and stuff in us dollars. Right. And so when they convert those dollars back into rubles, if they have a weak ruble, it actually benefits the Russian government because it means they get more rubles. Like right now they're getting like almost double the amount of rubles for the dollars that they sell the oil in. And then they can use that to pay the pensions and salaries and stuff and to run the government in Russia. Okay. Now, obviously it harms the ordinary Russians and it increases the price of imports. Okay. So it, it does actually harm the Russian economy in general, that it has this advantage in that they can use it to sort of keep the government running. Because anything that's paid out as a salary in Russia, they're getting like double the amount of money right now because they're selling, they're selling oil in dollars. And they're even telling the companies, apparently these oil companies and gas companies, when to convert their dollars to rubles. So they're basically telling them when we're going to devalue, convert your rubles now, and then they're going to do what they've just done, which is raise interest rates by 3.5%, which increases people's, you know, demand for rubles. Cause you can now get 12%. Their interest rate is now 12% in Russia. So if you hold rubles in a Russian, uh, bank, I'm presuming you're getting something around 12%. Um, so you can see there on the end of that chart, the ruble just started to come, come back up again. Probably a load of oil companies converted their dollars to rubles right at the bottom there. And, um, and it's starting to come back up, but, uh, it's terrible for the Russian people, you know, it's terrible for the economy cause it's wreaking havoc. Actually, there've been a lot of outflows as well. Just after the, uh, the failed Wagner, uh, mutiny that happened a few months ago, a billion dollars flowed out of the Russian economy, overseas to overseas. Um, in the few days after that, like people, rich Russians trying to move their money overseas cause they saw, you know, what was going to happen. So, you know, you know, have you ever heard of the game Roblox? I've heard of it. Yeah. So right now a Rob, a Roblox is worth more than a Ruble. I know that it has a currency, isn't that Roblox? Yeah. So for, for 1.2 cents, you get, you know, that that's how much a Roblox is worth. So officially, uh, the Russian Ruble is worth less than a video game dollar. That's funny. Just to give you a little bit of perspective there. Um, I mean, it's interesting to think that, you know, both of these countries are really fighting themselves. Uh, they're, they're trying to keep up with pace with China and Russia with the dollar and, and how to maintain their current currencies and their, their publicly traded markets, and they're really just out here manipulating everybody. And anybody who's putting money in there and lives in those countries, they're the ones suffering. They're the ones getting kicked while they're down. You know, it's, it's, it's pretty ridiculous to think that, you know, you're going to devalue your currency. The same guy that worked literally, uh, the check, if he got paid monthly, everything he did last month and he got paid this month, what a, what a hit. Like that's so painful. And then on top of it, you got to pay 12% interest. Like, uh, that's brutal. I mean, I hope they have fixed rate mortgages over there. Who knows? Yeah. If they even have, you know, anything that could really support it. It's pretty sad to think that they have this, this economy that's going to collapse, but really again, they're, they're using it to fund their war. So if you're, you're an oil investor and you're going, okay, well, you're going to, I guarantee you someone told them like, Hey, wait a second. That's going to bottom out. I need you to transfer your funds to, to Ruples. Now you can transfer it back to dollars. Good job. Oh yeah. That's totally managed. I mean, that's what, when I researched this, the analysts are saying, that's what they're telling, they're telling companies and telling them when to transfer money, you know, to their advantage. Yeah. Like, oh, it's so ridiculous. How long do we, how long do we sit aside and watch this happen as a, as humanity completely eats itself, uh, in these third world countries? I mean, they, they weren't really considered third world too, either. I mean, these are two countries that are second world. Technically Russia is second world communism. Yeah. Second world, former communists in this case. Right. But they still operate with this mentality of a strict hammer. Right. So it's, it's a really cringe kind of thing to look at when you're like, wow, just stop and let people live in free market enterprise and you'll do just fine. But instead let's go invade countries and cause problems and kill the hard man. That's working the blue collar worker. And you know, and we'll see what really happens. Um, how long this Ukraine Russia war goes on for, because really that's what they're trying to do is to continue to fund, you know, the US. Just sent F-16 fighters to Ukraine. So they've got to be able to combat that kind of artillery. So it's like, uh, yeah, that's planes. Yeah. I mean, we are basically a war with Russia now. That's basically what we're doing. Right. Well, we're just not sending troops, essentially. We're, we're literally not sending troops to Russia. We're sending money and planes to the, to Ukraine and we're using their people. Yeah. Um, you know, it's a proxy war, so. It's, it's sort of a proxy war, but it's not like a proxy on Russia's side. You know, like a true proxy war, I think would be like Russia supports one country and we support another country and they fight, right? Whereas this is, we're actually fighting Russia through Ukraine. It's like a half proxy. Oh, I don't know. Are we actually fighting, fighting China through Russia? Oh yeah. Could be. Yeah. Then maybe, so maybe it is a proxy war. We fight Russia with Ukraine and China's actually behind Russia. That's interesting. Like what's really going on here. It's, it's, it's very interesting to see. I mean, the, both of those countries are in places where they think they are pulling the wool over everyone's eyes in the world and everybody in the world is just kind of going, what are you doing? Stop. You know, and it's just going to continue until somebody actually comes in and says, all right, let's remove these, these dictators, you know, the, the she's and the, and the Putin's of the world. Once the, once they're out of place. I think someone really just needs to come in and do a peace deal, to be honest, you know, because you're not going to get rid of Putin. Um, just realistically, right. He's not going to go anywhere. Um, unless you ha you saw they had a coup that whole Wagner group and it failed, you know, so you're actually, even though the West doesn't like him, I think you're going to have to do a peace deal. You're gonna have to come to the table and negotiate. Um, and we see a very different picture of Putin than probably what they see in Russia. Probably some people in Russia think he's great, you know, like a Trump guy, character or whatever, you know? So, um, you know, I think you're going to have to do a peace deal with them in, in, in the end to stop the killing, you know, just stop people dying. I don't care if we do, if Putin's still around, to be honest. It's not my country. It's Russia. He's running Russia. He can go over and do his thing in Russia. You know what I mean? Nothing to do with me, but just do P do a peace deal. Stop killing Ukrainians, you know, people just going to sending Russian soldiers over there, die and stuff, you know, it's ridiculous. Yeah. Uh, on the border. I mean, it's really the border between the two of them where the, where the fights are. I've seen pictures of Kiev where people are like having a good time at night. There's like pools and water parks open in Kiev, isn't it? Right. And then, you know, Moscow's having a good time, but you're dealing with stuff all on the, all on the border where those people are just living, you know, treachery every day. And it's, it's really like, why don't those people unite and tell them, Hey, we're not going to fight anymore. We're going to create our own country. It's going to be called, you know, Ruck or something where we don't fight each other. We live in our own border country. Right. Yeah. We'll see what happens. But you mentioned China a few minutes ago. Um, so I want to, I want to talk about that. Cause there was a story that you were researching about this, uh, Israeli semiconductor deal. Intel was going to buy a semiconductor company and it was actually stopped by China. Just kind of unusual. Uh, why don't you tell us the reason behind this? Yeah. So I couldn't really come to a definitive conclusion from the communist party on why they decided to stop it. Besides that it's, and it's a trust breaker deal. But how did they even stop it when it's in a different country between Intel and an Israeli company? Well, all the semiconductor manufacturing companies are coming out of China. So this, this company tower semiconductor was to be purchased by Intel for $5.4 billion. They agreed to this deal in February of 22. So it's taken, you know, they've gone through the role, but it turns out that the China state administration for market regulation has told them that they can't do it because it gives them too much power. And really what it boils down to again, where we're dealing with this proxy is that Intel, California based company in the United States is trying to purchase up more semiconductor. And so America, who's, who's starting to pull away from China when it comes to manufacturing, I think Biden just did something, you know, last week or the beginning of this week, that executive order an executive order against China is semiconductor manufacturing and manufacturing. And so now the, they don't want American companies to take ownership of those entities so that they can control that because that's their last, you know, those eight, I think it's 88% of all semiconductors are made in China. Wow. You know, it's, it's a ridiculous number. And, but okay. So those are, but those are not necessarily made by Chinese companies, even though they're made in China. So this Israeli company has factories in China. And for that reason, you know, if, if it was to get sold, the Chinese communist party then can start causing trouble for them in where their factories are located. So they decided to all the production. I mean, the semiconductors are made in China and this company, and really at the end of the day, I think Intel was given a favor. The, the, the company that they were going to buy was going to lose 15% of their revenue this year. You know, they make older manufacturing and they make older style semiconductors. They're not on the cutting edge of technology. And you've got a company like Intel, who's their biggest, their biggest buyer of their products and their semiconductor is like the DOD and the United States government where you've got to really support that. So, you know, I think they kind of, they walked out, but they did lose $350 million. That was the breakup agreement that they had. This breaks up. So, so this company that's 17 for, you know, 15% in the hole might've just broke even this year based on getting that 350 bag. So basically they could have bought the company, but they would have had to have just moved it all out of China, right? They would have lost the assets in China and stuff. That's really all the company was except for Israeli management. I see. So, you know, semiconductor, the interesting thing is, is that there's 30 new semiconductor companies in Israel in the last three years, and they, they employ over 20,000 people in Israel. Now, Israel is not a huge population country and you know, 20,000 people is a big deal. They're not really known for manufacturing over there either. So these are like white collar workers that are manufacturing that are managing the manufacturing in the business and all of that remotely, but the people actually doing the worker in China. So their real assets are based in China. So China says, Nope, you can't buy that. And that's where the regulatory. Now, if you really wanted to sell your company, you go, all right, I'm just going to move all my factories to India. Have a good day. You know, they should have, they should have moved their factories first before they announced the deal. You know, sneakily getting out of it. They got the trust in the wrong place, right? They still think that China is a fair trade type country where they're not going to screw you over because they're trying to do business. The truth is they don't care. Like that government is probably the most atrocious the world's ever seen. So, it's very, it's very difficult to legitimately say that this was good for them and it really hurts or hurts Intel, but it helps Intel too. I think towers, you know, everybody worked out at the end of the day. It was like, all right, $350 million Intel didn't buy a failing company. So I think those factories are probably going to close down anyway. Like you said, you know, give it a year. They're going to go, all right, let's move to Pakistan. Let's move to India. Let's move South America. You know, that that's somewhere you could probably see growth in Latin America. As if some of the semiconductor manufacturing companies move there because a lot of the minerals are mine therefore. So that cuts out the shipment across the country, across the globe to China. Well, so speaking of manufacturing, that's a good segue into, I think our, our, our next topic, which is the, the cost of blue collar workers continuing to rise in the United States. So it, you know, it was declining for decades, but, it seems to be rising now. Well, the workforce is really the biggest problem with blue collar. So in 1970, the blue collar has made up 31% of the workforce. And in 2020, it's 13.9%. Wow. That's a huge drop. Yeah. More than half over the last 50 years. And it's not like those, those jobs aren't needed. It's just, everybody has been told, me included, since you're a kid, you need to go to college, you need to go to college, you need to go to college. And then when you look at the actual income, for a blue collar worker, they average 38,000 a year, a white collar worker in the United States averages $57,000 a year. So, so when you look at it, really it's 20 grand, $19,000 more, but how much does it cost for you to go to college? Oh, it's a lot, isn't it? Yeah. Anywhere from 40 to $120,000, depending on where you're going for a four year degree. And you really don't need to go to college. There are literally so many jobs you can do. Uh, there was a great example, actually, I think it was Alex Homose. He's a real estate guy. He gave this example of, um, you know, how someone could just increase their income by like a huge amount. Um, just, and you don't even need to go to college. So this girl was working in, um, I don't know, like a store or a fast food place or something, and her dad, who was one of his friends said to him, okay, you're not satisfied with your income. Go and do this course for $500, uh, to become, uh, someone who draws blood. You know, those blood test places, blood work. Yeah. Those, those people go through a two day course that costs $500 and they become kind of like a nurse. I think there's a term for it. I forget the name, but they become like, what is it called? That's it. Yeah. So they become a person who is like a nurse, but all they do is draw blood. Right. So that's basically the only thing they're allowed to do is just two day course costs $500, but it increased her income by like 20,000 a year. She was from like 20 grand right up to like 40 grand a year, which is, you know, you can, and that's more than the average, uh, blue collar worker, right? So you can do, and you could do real estate license. You could do, there are so many different courses you could do. Don't require you to go to college and you can just do them and increase your income. It's crazy. Well, well in the United States in the seventies, you had a lot of things that you did your senior year that you learned like HVAC, heating, ventilation, air conditioning work, you learned how to do electrical, you learned how to do all of these, all of these mechanical things that took six months and a course in high school in the seventies, you were actually able to take those courses. So when you got out, you had a job that was paying $30,000 a year in 1975, which was like getting paid $85,000 a year right now when you get out and they eliminated all of these courses. Now there's some places that are bringing it back, Florida, Texas, you know, they're, they're starting to push this initiative again because we need those people and it ends up being very, very difficult. So you have, you know, you have this, this workforce that's going away too. So these blue collar workers, you know, they were the people that are, that are baby boomers, right? Those were the baby boomers that were graduating from high school. And now today, 10,000 people turn the age of 65 in the United States every day. Wow. So, so you're losing this huge group of people that are, that are the blue collar workers, they're doing the HVAC work. You know, you have to think about it. How many people do you see coming into your home that are under the age of 30 doing the work on your home? Yeah. It's not that many. Yeah, it's true. It's not. It's the, it's this dying, dying breed of people. And it's, it's really interesting to see as, as the country ages and the baby boomer population, which is the majority of the blue collar workers retires, you're going to start seeing the cost of doing things that you're replacing an air conditioner in the next 10 years is going to double, triple. Wow. Because they're not going to be able to pay for it. Also there's, there's this interesting thing in that we're about to see a big transfer of wealth as well, because as these baby boomers retire and some of them pass away, you know, you're going to see not only the younger generation inheriting all that wealth, it's something like a hundred trillion or more, but all the businesses they owned as well. Some of these businesses will be inherited. Some will just get sold. So there's probably going to be a lot of opportunities. It's, they're calling it like the biggest transfer of wealth in history is pretty interesting. Yeah. And while that, that taking place on top of the crypto market, you know, coming into play in the last decade is where that transfer is with that younger generation who, who, I don't know, maybe five or 10% of the younger generation is in the crypto, maybe more, but their parents have nothing to do with it. And now they do have a, you know, they have a home, maybe their house, they bought it for 50,000. It's worth 450,000. So when they decide to leave that home and go to a retirement community or, or go, go to move somewhere, their kids. Yeah. They downsize cause they don't want to mow the lawn. They they're too old. And so now you have this blue collar retired worker and, and the kids that are not going to be able to keep up. So that's, that's really where the biggest challenges that are coming in, you know, and the decline in wages, you know, and it's stagnated in the last few decades, it's gone up a little bit in the last two years, cause it had to fight inflation, but, you know, so yeah, it's, it's really crazy to think that, uh, the, the trade skills are the most demanding jobs right now in the marketplace. So I know people that, you know, make $60 an hour to put in tile, you know, that's, you know, that's all they do. They make, they make $3,500 a week doing tile or, or more. Yeah. That's, that's a, you know, think about that. You're making a hundred grand a year. His kid coming out of college is making 42,000. He's got a mound of debt that he's never going to be able to walk away from until he pays it. This guy went and hung out with his, his uncle for six months and learned how to put in tile. Now he's making a hundred grand a year. That's awesome. And you know, the cool thing with blue collar jobs as well, that the thing people don't realize as well as that you're not necessarily going to be just doing the tiles yourself for your whole life, you know, like you can start as an apprentice, you learn how to do it and you start getting your own clients and then you can employ other people and you can become more of a businessman in charge of a blue collar business. So it's like, it's, there's a stigma about it, right? Like some people view it like, Oh, that's below me. It's like, no, no, no, no. You start doing this, do this for like five years yourself. You build up contacts, you build up business, and then you can employ people below you and you become the boss of the company. And some of these people earning six figures managing a company that does construction or whatever. So, I mean, it's a good, it's a good honest job to do. Yeah. The evolution of it. I mean, there's heating and cooling companies that sell for small localized ones sell for 15, $20 million that have been operational for 30 years. So they build up a name and they do that. And that's really where, where you see a lot of opportunity. And, and instead people want this instant gratification with social media, with the stock market, with crypto. I'm going to get rich overnight. It's like, just put a plan in front of you, go to work. And in 10 years, you're going to wake up and go, wow, I made more money. That's great. In 20 years, Don't get rich quick. Yeah. No one gets rich quick. And if they do, they run the lottery and they blew it all the next year. Yeah. You know, like it's, that's not how this works. It's consistent, disciplined effort makes success. And that's, that's what the blue collar people really exemplify is that discipline success. I mean, I grew up in Michigan where I would say over 50% of the workforce was blue collar workers from places like Ford, General Motors and Chrysler. And the whole time I grew up, everybody had two homes. And what did your parents do? Oh, they work at Chrysler on the line. Well, you got two homes. Yeah. Two homes because we don't spend money. We save it. And we go up North every weekend to our cottage, you know, and that's how the whole, the whole state pretty much worked for the blue collar worker. And that's kind of fading. You know, you see these kids that are going, what do I do? And it's like, go learn a trade, go to trade school for six months and spend three grand. Right. You know, Versus a hundred grand and three years or four years in college, you know, it's such a big difference. Yeah. And they got it for free. You know, the baby boomers didn't have to pay that three grand or the two grand or if they did, it was because they came in late, but you also have the mechanics, right? Mechanics make good money. That's another blue collar thing. Like, you know, that, that does really well. Right. The guy I take my cars to, he's so busy that like, you know, he, I mean, he wants to help you out, but if you go there, you want an oil change or something. He's like, come back next week. You know, I've got like 50 oil changes this week. You know, it's crazy. Right. Exactly. Or learn how to oil change yourself and then go from there, you know, like certain cars, you can't even do your own oil change, like change the oil on a Yeah. I mean, I used to do it on my Toyota when I was a kid, but there was one, there was one bolt to undo on that car. Right. Whereas if you do it on a modern car, there's like this big sort of noise canceling carpet thing that has 11 bolts to take off. And then there's an additional bolt for the, to empty the oil. So you got like 12 bolts compared to one, you know, they've made them really, yeah, a little bit tough. I mean, you could do it yourself, but sometimes it's kind of weighing it up. Right. Once you get to a certain level of income, you think, well, I do in like an hour to do my oil. What's that worth? You know, maybe I could, I could make some money doing something else for an hour and I'll pay the guy $35 to change the oil, you know, it'll take him five minutes cause he's got the, you know, the drill that has the, you know, takes all the bolts off like in five seconds and stuff. So, whereas I don't have that. So yeah, he's got it on a lift. Yeah. The air ratchet puts it on a lift and it's done. But so that's the blue collar community. That's just pretty much dying here in America. That middle class is, and people want to say, Oh, well, it's the wealth that are taking away from the middle class. It might come in waves though. You know, like as right now they're in so much demand that the money is going really high. I think soon a lot of people are going to see, wait a minute, I can make $60 an hour doing tiles, screw college. I'm going to, I'm going to do that. Yeah, exactly. And then no one really knows those numbers. You know, I, one of, one of my friends, he was learning how to do tile. He was getting paid 35 bucks an hour. And you know, I hired him to do some work. He goes up to 45 working for me. I kind of give him a few tips, you know, tell him, Hey, do this. Do this to this next year. He's like, I'm making 60 bucks an hour doing tile. That that's how it works. And so, you know, and that's not uncommon to, to really find that. I mean, some places in bigger cities like New York city, you're going to get paid 80 to a hundred dollars an hour in a late time. Wow. Yeah. So yeah, the, well, you gotta be able to survive there. So that blue collar worker is more valuable than I think a lot of people want to admit, and that it might actually turn into the lower upper class. Right. Yeah. The manual labor upper class. What do you do? Uh, I install kitchen cabinets. How much do you make? 200 grand a year. No one wants to do it. Yeah. What do you do? Oh, I, I'm a, uh, analyst for, I earn 85 a year. I'm a Goldman Sachs analyst for, uh, the energy industry. How much do you make? 95. Oh, that's good. Yeah. Well, I think, I think that's a, uh, a hopeful, um, tone to end it on this week. So, you know, times are changing guys. You don't need to go to college. There's a lot of things. There's a lot of opportunity out there in different industries. Um, including some things you might not afford of like certain blue collar jobs that are really earning good money right now. So, and, uh, so yeah, I think that's where we should leave it today. Uh, you got any final thoughts, Mike? No, but discipline and sacrifice equals success. Yes. And delayed gratification too. Don't make a little bit of money and then go out and buy a 10, $10,000 Rolex. Just hold off, hold off on the thing is until you're rich enough to afford them until you're making 200,000 a year or whatever or more. Um, so yeah, thanks so much for listening and watching guys. If you're following on the major podcast platforms, do give us a five-star review. Do share the show with your friends. Also on YouTube shorts, Instagram reels, and Tik TOK. Our handle is dirty money show. We upload short clips to all those platforms too. So do check them out, share them with your friends as well. And we'll see you guys again on the next episode of dirty money.