Chris Martenson: Well, this is…if we back up a bit and you asked important question which is look, how do we avoid this in the future? Believe me, I put a lot of blame at the feet of the bankers, but also the homeowners really who are participating in this have to bear some of the responsibility. But that’s kind of hard to say, like if you live in Seattle and you’ve got a job and you really want to own a home. What do you do? You either participate or you don’t and you either pay the prices that exist there or you don’t. In some ways I think A, for the home…here’s where homeowners bear responsibility in this. When they really, really stretch, when they think they’re going to flip the home for more, when they have their eye on the capital gains that they’re going to make off of this when they extract equity from their house because they’re worth so much more.

Those are things that really ought not to be done on average, especially during a bubble. So if we back up and asked that important question, how do we avoid this again? Look, we have an everything bubble in the world. As burned as people are going to get on real estate, what until you see what happens to the junk-bond and the leverage loan markets. Oh, my god. Just trillions of losses coming. In the equity markets, this is the everything bubble. Every major financial asset class, real estate, stocks, bonds got driven through the roof because the central bank said hey, we think we can…we blew up a credit…a cycle in 2000. Really unfortunate, but we learned our lesson. We just had to double down. Bernanke gave us a next layer of that. We had more participation by the world central banks. China got on board with that.

Unbelievable how much money was printed through all that and now we’re in our third credit cycle. This one blows up, Ben all I can tell you is that, if we’re smart and this is painful enough, what we do is we decide that we can’t let central bankers drive credit cycles as the policy instrument is damaging. It’s stupid and it always ends in tears. I think this time it ends in much more tears than 2008 just because like I said, there’s really nowhere to hide. Even at the height of 2007, I was writing about the bubble in housing and certain equities as well. There were still places to hide. There is nowhere to hide. Everything got overpriced except for certain commodities in this cycle. So beyond that, I just think my advice to people is know where you are in the bubble, stay oriented and for goodness sakes, get out of the way of it if you can. I don’t know what else to tell you at this point.

Ben Jones: Well, also whenever people are…whenever you hear crazy talk, just recognize it for what it is. For instance, it wasn’t that…it was 2016, people were telling us that negative interest rates were the future. This is the way it’s going to be. Oh, you’re going to pay me to borrow money? It was ludicrous on the face of it, and yet it was accepted by how many media organizations and talking heads? Look where it’s went. You talk about trillions. There’s already been trillions of dollars lost on sovereign debt that was issued at negative interest rate. The media won’t tell you that. But it’s already gone. Trillions of dollars have been lost on negative interest-rate bonds.

Chris Martenson: Yep. Yep. Who knew? Who knew that paying Portugal to lend it money was a bad idea? Who could’ve figured that out?

Ben Jones: Right. One thing you touched upon I want to mention is that, the house buyers themselves…one of the most important things I ever came across was Peter Schiff mentioned that people respect how many different ways that people speculate on housing when they don’t really know that they’re speculating. A perfect example is, if you refinance your house and you don’t really need to, you basically sold it to the bank. So you got to pay that back. So why would you do that? In most cases, these people don’t expect to have to pay it back.

I was in the foreclosure business for eight years and I did a lot of research on the houses as they came across my desk. A lot of times, these people were refinancing two, three, four times. This was in Flagstaff, Arizona. So they were refinancing every year. A lot of time pulling out 80, a hundred thousand dollars at a whack. Why would you do that when you know you have to pay it back? Well, they were expecting that they were never going to pay it back. So they were speculating. This is same with a lot of people like on Mercer Island in Washington. Why would you pay 10 times your income for a house? Well, because you expect it to go up? Another example is the way that in Santa Clara and Palo Alto where I’ve post stories in Palo Alto that now they’re whacking a million dollars off the price and it won’t get an offer.

Whereas before, they were getting multiple offers, et cetera. You don’t really need a five-million-dollar house. Why would you buy a five-million-dollar house? Because you expect to sell it for seven. So there is a lot of speculation that’s kind of going under the radar that well, housing is a good investment and it’s like, it’s not a good investment. We can debate that, but the fact is that nobody really needs a five million-dollar Santa Clara house, which is really kind of an ordinary house. They could live in a million-dollar house even if you believe that the housing was worth five million dollars, they actually expect it to be this big bonanza. Well, I guess the take away is that, there’ s a lot more speculation going on in the market than most people acknowledge.

Chris Martenson: Well, sure and when that speculation comes to an end there’s a usual pattern of things. So what are you looking for if you had advice for somebody who’s thinking is now the right time to buy? A lot of people of course are in that decision set right now, because people move. But what would you be looking at in terms of inventory or months on the market or how the prices in various subcomponents are moving? What would you look at to say, I should probably wait a little longer in this market? What would those indicators be?

Ben Jones: Well, that brings up something that I kind of think is funny is this months on the market thing. I posted an article yesterday about the months on the market going from 10 days to 15 days and now is a buyers’ market. Obviously, the months on the market thing is meaningless. I call it the real estate industrial complex. These guys…I don’t want to say what I think them frankly. But the months on the market doesn’t mean anything. The inventory…well, I would say right now the bubble is popping in the United States and until interest rates settle out and these processes settle down…I mean, I’m an investor. I’m a state investor and I’m getting ready to sit on the fence like a vulture, because that’s what’s going to happen here.

I mean, it’s really unfortunate, but we are going to see a collapse. We are seeing a collapse. The real estate market, the bubble has popped right now. You can mostly because…let’s take the Bay Area in California. Prices are falling and yet everybody is rushing to sell, and purchases are dropping like a rock. It’s the exact opposite when prices go down, people should buy more but they’re not. Everybody’s behaving like speculators. It’s just like day trading stocks or something. So what’s happening in the market right now is a lot more…has a lot more in common with…or suggest a bubble much more than it does just a correction or a cycle. I don’t know. I mean, I can’t think of a market in the United States I would buy in right now.