♪ ♪ neil: inflation is real. that is probably an understatement. welcome, everybody, i'm neil cavuto, and a special look at where we have found ourselves on something we thought we had overcome. there's a whole generation that doesn't remember the '70s with the exception of leisure suitses and bell bottoms. i do remember other aspects like long gas lines and the fears it could get out of control. i also remember cds that were yielding 18%. hard to conceive of.

but could it be happening again? a beleaguered president then trying to get on top of a problem that wouldn't go away, and now a beleaguered president -- also a democrat -- dealing with the same thing that he hopes goes away. so far no signs has happening. and we decided for the next hour cover all the bases, where it's happening, what they can do to possibly deal with it. and we've got you covered with some of the best and brightest names out there including our own larry kudlow are, the former are director of the national economic council under president trump, john cats knee d.c. as well, owner of a grocery store, katrina -- the real estate genius. she saw florida booming when we were, well, in the midsts of pandemic and everyone, everyone was doom and glooming. we've also got dan geltrude. he's an accountant by training,

notoriously cheap, but i say that in a good way because he's concerned washington doesn't share his feeling. also ed bradley, and he's here to tell you it's not going away. so it's a packed show. let's get right to it with larry kudlow the host, of course, of a wildly popular show at 4 p.m., "kudlow," and former economic big wig in the trump administration. good the see you. >> good to see you, neil. that's a good yet. everything we've seen is disappointing, including today's cpi report where there really concern. neil: where the trend has been as the uptick in crisis continues. >> yeah. 5.4% the last 12 months is not good. now, the consumer, personal consumer deflater which is a broader measure the fed uses, it's running a a point lore. but still, the trends are are

not good. and i was thinking how to make this as easy as possible to think about it. there's two sides to. one is what i call pandemic inflation, and those are the supply shortages. essentially, supply shortages, people slow to come back to work, those kinds of things. and that's not a policy issue, it's just you have a once in a 100-year event, and you turn the spigot off, and then you turn the spigot back on, it's a hard thing to do, very hard thing to do. and one good thing, i'm not a big fan of joe biden, but his conference today with fedex and walmart and jimmy hoffa and the teamsters is a very good thing, because the supply shortages, neil, the containers backed up in l.a. and long beach, that's becoming a national emergency, and i'm glad president biden is on it. so that's one-half of the story, the so-called temporary part. but one reason i'm beginning to turn more negative on the

outlook, i'm looking at the monetary part. the federal reserve keeps pumping up the nation's money supply. now, i understood that during the pandemic -- neil: right. >> -- we needed plenty of cash. but in the last six months or so, eight months, bank deposits, the fed's balance sheet, they're still pumping it in. they're giving us more money than we need -- neil: and we've gotten used to it, right? it's almost like for investors like a fix. >> yeah, it is a little wit. it's nice to have free money, the stock market loves free money. i'm getting worried about it, okay? i'm getting very concerned about it. and to a large extent, all of the spending and borrowing is being financed by fed very muchs. the fed has bought 57% of the new bonds issued by the treasury. that's a bit latin american style, neil -- neil: so draw back from that, rates can only go up. larry, knowing that you were

coming here, a lot of our viewers were filing left and right trying to get mails and videos to you. one we have is from david from texas. this is david. >> how can the inflation be tamed if the fed keeps on pumping money into the economy? neil: he raises a good point. how do you tame inflation when you keep adding money that compounds the problem? >> yep. david's a smart guy. that's my monitory in-- monetary inflation side, and that's creeping up. we are running so far ahead of normal cash -- there's so much money out there, i kind of like this story. the wall street traders will tell you the banks and the money funds and insurance companies are literally coming to the new york fed at night, we have more money than we know what to do with. and so the fed is doing these, they're called reverse repurchase agreements for five basis points, they'll take the money, and they'll give it, for five basis points, they'll give them a treasury bill.

could be an overnight bill or a three-day bill. but there's 1.3 trillion of that going on every day. it's an incredible story -- neil: and it's propping this up, right? >> well, i'm just saying the question dave from texas asked and the most important question right now because these supply shortages, that'll eventually get worked out. don't ask me when, but eventually it will. we can open up containers, and we can get truck drivers, and we're going to have to pay them a good wage. not easy, but we can solve that. but the fed pumping out all cash constantly, week after week? m2's growing at 12 or 13 percent. we're well into this recovery -- neil: you're referring to money supply, it's a good baseline -- >> and that will increase inflation if it -- neil: it already is. there's another issue, too, that comes up, and that is the supply chain disruption, larry, and it prompted this question from kyle in massachusetts. take a look. >> hey, neil.

big concern of mine if is the microchip shortage. what is causing it and, like, at the root, where did it actually start s and how do we get to the end of it and when, and will those prices just continue to keep going up over time? neil: they've been going up. this is an interesting phenomenon. >> another good question. to some extent, look, i had wilbur ross on last night, former commerce secretary, just knows everything there is to know about semiconductors and chips, okay? so we walked through this. taiwan is producing big. so is south korea, samsung. taiwan manufacturing. i mean, they're fabulous semiconductors. the problem was, first, a9 bottleneck in some trading ports, vietnam being one of them, also china being another. vietnam may be more important, believe it or not. and second, coming from asia the

added ships, we only make 12% of the chips that we use, so we rely on the rest of the world -- neil: a lot of it asia, a lot of it china -- >> right. long beach and l.a.. neil: if it continues, that could compound the issue, right? >> the short answer is yes, and probably the long answer is yes. our relations with china deteriorate, the chinese have moved, neil, away from their market reforms and a very state-run, almost totalitarian political operation. which is crunching down the economy, they're attacking their banks, attacking their private sector -- neil: yeah, and they're resorting and going back to form on the brute stuff, right? the military. >> threatening taiwan. you know, taiwan is very important. if you're worried about chips, taiwan is huge. neil: you're right about that. >> and so is south korea. we're bringing them back here, okay? we're using some subsidies. not my favorite thing, but this is national security.

taiwan semiconductor manufacturing is coming to arizona, and the government will pony up some additional subsidies, but it's a problem. automobiles, i mean, these are not specialized chips, and that's why it goes back to long beach and l.a.. they're in containers, and you and i should just go out there and unpack the damn containers, okay? [laughter] neil: i know it's bad when they say they're running out of cargo ships. like these stores that want their own cargo ships -- >> what else came out at the biden meeting, i mean, the long shoremen really should be 24/7. neil: i was surprised they weren't. >> right. i had heard rumors they were closing shop at 3 p.m. in the afternoon. they should be paid for it, lord knows, lots and lots of overtime, but this is virtually a national emergency. neil: you're quite right about that. we have this question are from don in texas, larry, saying i've always thought of inflation as the tax the government doesn't

collect. is this a good way to view it? >> well, yeah. inflation is a tax. it takes away the purchasing power, or put it -- the money you have in your wallet or your pocketbook, literally the cash you have or in your checking account, is diminished. its value goes down by the rate of inflation going up. and so it is a tax. and you see it most clearly, i mean, we didn't get any relief particularly energy prices up 1.3%, all right? we can talk about that. but food up 5% year on year. food -- neil: none of that's abating. it gets worse. >> 8.5% annualized the last three months for food, 21.4% for energy. that's a tax. that's an inflation tax. was it john may gnarled keynes? -- maynard keynes? you knew him. neil: usually it starts with energy, correct? on your show you talk about that, it started in energy, go back to the biden days with

stopping the pipeline, but bottom line, it started with energy prices. others have followed suit, and they continue to. do you see that trend continuing? >> unfortunately. neil: yeah. >> unfortunately, i do. i mean, look, we were the world's number one producer at over 13 million barrels a day pre-pandemic -- neil: yeah. >> now we're down to 11 million barrels a day -- neil: and we're begging them to make up the difference in the production. >> crazy. and we're giving russia, you know, i mean, come on. neil: yeah. >> we could have -- gasoline's up a buck. i'm not saying it could have totally been avoided, but a lot of it could be avoid ised. and there's a story, i think it was then front page of the journal today, anyway, someplace in the paper these frackers don't, they don't want to make investments because they, these headwinds coming from washington. neil: can't blame them. guys, i want to skip to lee from alabama who had a good view on this low rate environment and

how long it could last. take a look. >> during this downturn in interest rates, almost record low interest rates, did the fed increase the maturity of bonds that we have outstanding? and the second question is, are we -- who's buying the bonds? neil: [inaudible] >> yeah. the duration. the answer is, yes, comma, but not enough, period. now, we had this -- i really persuaded trump, we should be selling 50-year bonds or 100-year -- neil: and they were kicking that around. >> right. neil: what's the benefit of that? you're locking into those low rates for a long time? >> exactly. say you have a 3% 30-year mortgage. right now the 10-year is, what, 1.60. lock it in for 50 years, man.

neil: they're only going up. you see rates going up a lot higher from here? because the normal fed funds at this point should be at 3 or 4% given this environment, right? >> yes, i think that's right. mom that would gdp -- nominal g e dp is growing at 10%. you haven't have a zero -- you can't have a zero fed funds rate. so, no, i don't like bonds. i think rates are going to go up. we have extended the maturity to a little over five years, all right9? in the treasury financing. steve mnuchin, my good friend who was treasury secretary, acknowledged 25 and 30-year maturities. we didn't get there. i wanted 50 or 100 years -- neil: interesting. >> trump wanted 100 years. you know, president trump, former businessman, he knew a lot about debt and borrowing. neil: right, right. >> i think, correct me if i'm wrong, japan has 50 or 100-year bonds, britain does concern. neil: they've had zero rates

forever. larry, so good to see you, my friend. a lot of people say you were the the calm in the trump administration storm. that's not disparaging the administration or saying that larry kudlow was problematic in that, quite the op to sit. he was very -- opposite. he was very reassuring to markets and to a lot of viewers who just want some sort of a calming experience. but you can accept on face value things are going to go higher, a lot higher. the question is how soon and by how much. if you take a look at the gas pump here, of course, you know what's going on. you're paying higher prices, and because we're so beholden to opec and opec-plus countries, it's going to go even higher still. stay with us. ♪ ♪ 0-60 in 3.5. ♪ baby you've got the key, shut up and drive ♪♪

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♪ >> oh, my god, this is ridiculous! i can't believe it, it's the over $100 to fill my tank. >> prices are too high as it is, so it's not a good situation. and i don't understand why we have these prices going high. i don't understand. >> it's costing me $140 to fill up my truck, and it's just

taking me apart. neil: you know, it started, if you think about it, with energy prices, right? and gas prices that are now at multiyear highs and we're seeing it extend to what's happening at the grocery store. these are all businesses which my next guest is a dominant player, john cats my d.c., he has a good eye on everything that's going on. john, very good to see you. i wonder when people react the way they do, not happily, to these high prices how long they stick around. the experience we have with inflation is it's not transitory, it stays awhile. do you agree? >> i think it stays for a while, and it started with the first week that president biden was in office and he kills the pipeline. and he kills the keystone pipeline, and don't forget america, north america, canada,

united states has a hundred years' worth of oil. so under president trump we were producing 13.5 million barrels a day. what are we down to? 11.5, 12, something like that. and guess what? it was $40 a barrel, $45 a barrel. thousand it's $80 a barrel -- now it's $80 a barrel. neil: and you think it could have been, at least, you know, explore those solar, wind options, but everything. go all in. >> oh, absolutely. let's explore wind, let's explore solar -- neil: but you famously said don't kill -- >> don't kill america. look, we turned over because we went to 13.5 let's say to 12 or 11.5. 2 million barrels a day. we turned it over to the russians. neil: now we're begging them to increase production -- >> selling us an extra 840,000 barrels a day. the russians are selling to us. not at $40 or 50, at $80 a

barrel. 80! neil: are you surprised how quickly it spill over -- >> no, not surprised, because it's natural. when the white house says we're going to raise the taxes on the the rich, forget about the rich. they won't pay anyway. we're going to raise the taxes on corporations. well, guess what? when you raise the taxes on corporations, it flows downhill. they're going to raise the prices to the consumer. so when the consumer's paying a dollar more for skippy' nut butter or whatever -- peanut butter or whatever, it's because the manufacture in fear the that his costs are increasing, is charging more. you know why? they don't want to have a bad quarter. they don't -- neil: and so far they can pass it along, right? let me -- we've got a lot of questions. a lot of people knew you would be here. this is from tom in tampa on this phenomenon. take a look. >> i don't think there's ad good, logical reason as to why

things are going up. they're going up, and no one can explain why. gas would be a good one because we had it very under control for a long time, and all of a sudden gas just shot through the roof. i don't know why that happened. >> i'll tell tom why. gasoline are, when crude oil goes from from $40 to $80 a barrel and we're not getting -- we reduced, the united states reduced the production, and we're getting screwed up in canada with the pipeline situation not getting all our crude oil from canada, what happens? the price went up to $80 a barrel, ask is we're paying -- and we're paying putin, and we're paying opec $80 a barrel for the crude oil. neil: but why does it run up at the grocery store. >> okay. everything's delivered to the grocery stores by truck. everything -- all the manufacturers' price increases are increasing cost because of labor. they have to pay more for labor. there's not enough truck

drivers. they are paying more for truck drivers. etc., etc., etc. -- neil: and it just place blossoms. do you see it lasting a while? >> it's going to last a little while. maybe i would say at least til mid 2022. neil: wow. all right. this is from lindsay, new york city. wonders about this whole supply chain issue. take a look. >> hi, neil. this is lindsay from new york city. how are shipping restrictions due to covid going to affect inflation rate for the holiday season and buying gifts? thanks. >> well, it's going to increase the cost of getting gifts. a lot of it is the bought from asia. because of transportation from asia to the united states and also shortages -- neil: an area of the world where the covid issue is still a big

issue. >> covid is a big issue, but you know what else is a big issue? the california docks that are coming in. they're not fully open. now i understand today -- neil: 24/7. >> 24/7. it should have been that a month ago. neil: i wondered that too. i thought they were 24/7. i guess they're not. all right. this is from david in texas who wonders about china. >> what can be done without depending on china to get back to shipping -- how can we become more self-reliant without depending on other companies to have a supply of our own materials here. neil: we've discovered that china kind of owns all this stuff. >> well, they own all that stuff, and now the white house, they went and put their thumb down on general motors, their thumb down on ford, oh, we have to have electric cars by 2035. even though we have 100 years 'worth of oil. you know why asia is pushing electric cars? they have no oil. by the way, when ford and

general motors builds electric cars, they're buying 90% of their batteries from china. and guess what? neil: how did china get in this position where they dominate not only all the precious minerals and all that -- >> well, let me finish. china needs lithium for their9 batteries, they didn't have any. so what kid we do? we gave them afghanistan. that's where all the lithium is. now, how did china do that? china has no oil, so they had no -- they had to go to electric so they wouldn't be dependent on us. but now we're going to be dependent on them for batteries. i mean, that is dumber than doesn't and why are we -- dumber than dumb. and why are we doing this? i don't know why. putin is laughing, and guess what? the chinese are laughing at us too. neil: yeah. this is from marlene who writes

i still cannot believe that the prices at the dollar tree will go up. it was the only place that had not been impacted by inflation until now, so where do we go from here? >> it's going to go up. maybe it'll -- dollar tree will be 1.99 instead of .99. their costs are going up. i was with a large manufacturer of products last week for dinner, and certain products used to cost them clash 1800 a con -- $1800 a container to bring in from asia, they were asking $20,000. is that right? that's right. neil: wow. your customers at some of the high-end -- for those not familiar in the new york metropolitan area, they're the cream of the grocery crop. your customers will happily pay more. but i have always been of the view, and i was telling larry kudlow the, i don't know how you feel about this, john, but inflation can only when

customers stop paying those higher prices. they don't show any sign of that for the time being. >> well, the word inflation, i don't use it anymore. because -- neil: what do you call it? >> i call it a tax on the poor and a tax on the middle class. because when the corporations are taxed and they pass it down to the stores, guess what? we're going to raise the prices. it's either two choices, either raise the prices or go bankrupt -- neil: but your customers absorb it, right? [inaudible conversations] so your margins, you can afford it. what is it about your base that allows that? >> no, it's about all bases -- neil: no, because it's not happening -- it's happening with your stores, more power to you, but your customers so far are paying those higher prices. >> it's happening all over but you don't see it yet. you're going to see it -- neil: where they just say no more, stop. >> oh, if you don't want oreo

cookies anymore, yeah, you can buy brand x. i got a price increase from nabisco the other day, and the numbers said we're raising anywhere from 4-14%. neil: wow. >> so what are we going to do? neil: people have a cutoff figure in their held? i will stop paying when a package costs more than $50. [laughter] up until then i might stay with them. >> well, you're right, $50 -- [laughter] oreo cookies. i like them a great deal. neil: got it. by the way, mark turner on what's happening now with this inflationary environment particularly when it comes to the basic stuff we use all the time. take a look. >> -- inflation impact our domestic manufacturing for holiday -- [inaudible] associated industries. >> good question. what do you think? >> i didn't hear -- neil: this environment and the stuff we ship abroad, it's that much more expensive. that's a problem for us, right?

>> don't forget, the price of brent in europe is $82, 83 a barrel. neil: you're right. >> so it all flows downhill -- [inaudible conversations] exclusive news here. have you thought about that they're forcing the price of natural gas up, they're forcing the price of gasoline up so it'll make it more end acceptable to have a car with electricity? think about it. neil: so they're forcing this migration from traditional -- >> meanwhile, opec is making a ton of money. you know, somebody wanted to do a charitable thing with a opec nation yesterday, a rabbi was in my office yesterday, wants to do something charitable with an opec nation. i said, rabbi, i said last year they were getting -- opec's producing 10 million barrels a day at $40 a barrel. now they're producing 10 million

barrels a day at $80 a barrel. they need charity? [laughter] neil: you could profit off of -- >> no, we only make a differential. neil: okay. well, it's made you a multibillionaire -- >> give or take a billion. neil: yeah, yeah, please. >> i don't care about it. i go to work every day, i've always worked certain days a week -- neil: you have. >> and i still work seven days a week if you count the time on my if computer saturday and sunday. neil: i knew you when you were just a mere millionaire. look at at you, you've done okay. >> well, god bless america. neil: he works hard and still works hard. that's a good reminder, by the way, any profession. you can be smart, but there's no beating working your hiney off because it does pay off in a lot of cases. we talk about how everything is going the inflation route and it's getting worrisome, but we

are seeing at least if the you're a homeowner in a good way because it rocketed in value, we particularly see that in hot markets like florida. but there's a flip side. when you do sell is your home at a premium, you still have to buy another home that is also at a premium. that conundrum after this. ♪ oh, but ain't that america for you and me? ♪ ain't9 that america something to see, baby. ♪ ain't that america, home of the free -- ♪ yeah, little pink houses for ♪ yeah, little pink houses for you and me

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it has our back. and goes out of its way to help. ♪♪ when you start with care, you get a different kind of bank. truist. born to care. >> we've been looking to buy a houo that's a big expense we've been kind of putting off. >> houses have astronomically just grown. and so -- and prices have gone incredibly up. that shouldn't be that high. >> just that's a lot. i don't know how younger people actually, like, buy houses and function. very difficult. >> i actually am remodeling a home right now, and prices on windows and how long we have to wait for everything or to come in, it's so much more drastic

than it was two years ago when we remodeled a different home, so it is extremely frustrating. neil: it is now, and a lot of people know it full well right now. but what if you were to be seeing all of this a year ago or 18 months before now? a lot of people would think you're crazy or on something or both, right? and a lot of people had that reaction to katrina when she was talking about the real estate market and the boom to come, certainly in hot markets like florida. but back then, katrina, if memory serves me right, those markets weren't remotely hot at all. what did you see then that a lot of people think is now on steroids now? >> well, neil, when i came on your show then, you know, in the midst of the pandemic, what i've always known about real estate is that it's a great hedge against inflation. but i also noticed that people were giving more importance to the home. you know, people were at home so much is, people were around their children, they needed a home office. so i began to hear more and more that people wanted more space

and all of a sudden in my mind something just clicked, and i just knew that real estate was going to be the driver that really helped us out of the, quote-unquote, recession that we were going to hit. and i remember -- neil: in the end, katrina, you still think there's some ways to go? >> well, you know, right now it's slowed down a little bit. not very much is. but what's happening, yeah, what's happening now is that people are definitely taking advantage of the fact that it's a strong the market. they're selling, but then they have nowhere to go. so that's actually causing rent prices to skyrocket. rents were up 9.2% in july. so many times when i sell people's home they say, okay, i'm going to rent for a little while, and i show them the rentals on the market, and all of a sudden they say is, wait a second, it's more expensive to rent than it is to buy, so we go right back into the buying mode. and you're experiencing this really across the board. as someone just mentioned at the beginning of the segment, home construction has become more and more expensive, and the lag time

has become more and more expensive which also means existing homes are are more valuable, the prices are going up. neil: a lot of people knew you were coming and had a lot of questions, including thea from florida, as a matter of fact. >> why is mortgages going up and not down? and why is it -- people say it's a seller's market. or it's a buyer's market, i'm not sure. but why is these mortgages keep going up? neil: assume he's talking about mortgage rates, but what do you say? >> well, first of all, it's definitely a seller's market. the norm is six months of inventory, and we definitely have is less than that. there's very little inventory, there's a lot of buyers that are not only looking for primary homes, but are also looking to buy investment properties because real estate has generally been a great hedge against inflation. a lot of times appreciation, you know, helps during inflation times. so the appreciation that you get when you're renting a property.

also the expenses can be passed on to your tenant. so that's why rental properties are doing extremely well. also building multi-family is more expensive, so current rental properties go up in value. mortgage rates are fluctuating a little bit. the fed's language has caused rates to go up a little bit, and many economists have predicted rates will go up in 2022, maybe up to 4%. neil: all right, the treasury has been buying and the fed directly buying a lot of treasury securities, mortgage-backed securities as well. the they buy fewer of them going forward, the supply and demand equation favors the rates going up. but, you know, there are hot markets right now, katrina, and then not so hot markets or markets that might be deemed underpriced. a good question from tom this buffalo. >> what cities do you think will be best for property investment in the future?

i'm thinking of becoming a property investor myself and would love some insights. neil: what do you have for him? >> well, kudos to you for buying property and starting now. there are various different cities which are doing well. i think the number one thing to look into is job growth, population growth and affordability. those are the three factors, i should say, when looking to buy in a particular area. as the old saying goes location, location, location, so cities like texas, for instance, are doing very well, north carolina, florida, new jersey. you have ohio doing well, chicago. so it's important to look at the demographics in the overall cities as people are migrating back to work and looking at the population growth as well. and remember also that a lot of the younger generation are going back to the cities, getting back to work, and they're rent aring as to opposed to buying because prices are so high. neil: katrina, we've got a lot of questions for all our guests on the supply chain and its impact even in real estate. this next guest kind of puts it

together, ray in boca raton. >> my question is considering we are seeing inflation become less transitory and more of a norm from factors such as supply chain disruption, do you see supply chain for building materials and products used in everyday lives normalizing anytime soon? and if so, when? neil: what do you think? >> you know, the bad news is, neil, that the supply chain issues that we're experiencing are much more persistent than anybody initially realized. the worse news is there are so many different factors as many of your guests have stated, so predicting a strait forward fix is -- straightforward fix is difficult. we're beginning to understand the overall story ask how it came to be. there's transportation, there's labor and there's energy. you know, transportation, china, for instance, during covid a lot of the ports were either closed or running at limited capacity. and the increase of durable goods or the increase, i'm sorry, on the demand of durable

goods has skyrocketed making the cost of containers go up and really -- we just can't keep up with the supply. what you're experiencing now in the home market. so if you're looking to order a bed, for instance, or looking to order a couch, things are taking much longer. also labor. there's a huge labor shortage here. so even workers to take things off containers or people to drive truck ares to be able to deliver goods, we're experiencing a shortage. and many times that's because the government is providing so many incentives and benefits not to work. another thing to consider is energy, and energy's much more deeper rooted, but it's really important to have energy in order to create these goods and services. and many -- it's also very important to note that many of the goods and services, for instance, in the united states need international traded components to be able to deliver those goods and services to us. neil: that's right. >> so many people that are buying homes from me now are so concerned, it's not furnished, when am i going to get

furniture? i'm going to be sleeping on, you know, a mattress on the floor for three months because it's going to take that long to get a bed. it's definitely affected florida as well. neil: katrina, i want to bring my buddy dan geltrude into this, an accountant by training. and i joke with him that he's very, very cheap, but i mean that in a good way because he looks for alternatives around these inflationary pressures. dan, they're harder to find these days though, right? >> yeah, they certainly are, neil, because everything literally is going up. so any place you look, and a lot of what we've been talking about here is trying to time things. and that's very difficult whether you're talking about the real estate market or whether you're talking about the stock market to try to time what's going to happen next, very, very difficult. so i think overall anybody and an investor in any type of market really has to look at the long-term investment because trends will come and go --

neil: dan, what is long term to you? >> long term for me -- >> real estate. [laughter] >> longer than a year. neil: okay. my age is breakfast next week. i want, dan, you to respond. this is joseph from florida, of course, katrina's neck of the woods, on just where all of this is going. >> hi, neil. question for you. what centrals should retirees take with their investments with the raging inflation that's taking place and expected to take place over the next few years? neil: in other words, all of that runup could be compromised if this runup gains traction. what do you tell him, dan? >> well, look, i go back to when you're looking at inflation, the concept here is that prices are going to continue to go up. we need to be very careful that when you are investing in something that has a fixed

return, you are technically losing money in an inflationary period because everything or is going up this price. however, your earnings on investments are in the going up. so where do people go? people want to go into equities in the stock market, but i'm going to tell you this, neil, what we need to be careful about in this inflation is how the fed reacts with the possibility of raising interest rates. because if we start to go down that path, i think it's going to have a very negative impact on the stock market. so now you could have equities coming down in value, and now people are really stuck in a tough situation for investing. neil: katrina, what does that mean for real estate if that happens? >> well, you know, interest rates go up, i think it's definitely going to slow down the market, i think more inventory will come on the market. to his question too, i've just seen that most people have accumulated a lot of their

wealth through their real estate. i just realize it proves time and time again to be able to hedge against inflation with rents, as i mentioned. the expenses can be passed on to the tenant, and rent prices are continuing go up. couple with what dan's saying, i think also investing in reality is a very smart move towards retirement. neil: dan, this is a question for you. a lot of people want to shield themselves from this inflationary spiral. you can buy protection for that. fred from colorado has this question for you. >> with the cost of the goods and services we use every day seeming to go up almost weekly along with the fact that the fed has told us inflation may be here a bit longer than they expected, would you think that treasury inflation-protected securities, better known as pips, would be a good investment at this time? neil: what do you think, dan?

>> yeah. actually, pips are exactly design for this. how they work, neil, is basically you're buying this investment, you're buying these bonds, and what happens is as the cpi raises as inflation goes up, you actually have your investment rate or your interest rate, rather, adjust so you actually get more money to keep up with inflation. so it is a really good hedge on investment. however, however, that doesn't mean that you should simply go into those pip investments and say, okay, now i'm protected. it should be part of your investment strategy. neil: super quick, guys -- dan, i'll is ask you first -- the experience we had in the '70s with runaway inflation and all of that, do you see that happening again? >> i don't see it happening, neil, to the extent that we experienced in the '70s,

before my time. i know that was right in your younger years -- neil: that's fine. [laughter] >> but for me, i think that -- [laughter] i think that we're heading in that direction. are we going to see 18% interest rates? that i don't see, neil. neil did i ever tell you the story my wife and i got our first mortgage at 13.5%? oh, i kid, about a thousand times. katrina, you're so young, your perspective on whether we could revisit that '70s experience. >> well, i don't think -- i agree with dan, i don't think it'll get to that point, and i do remember, neil, you telling me the story of you and your wife having 13%. my parents did as well. i think we're spoiled when we say interest rates are are going to go up to 4%. you know, money's still relatively cheap, and we're really blessed to have interest rates so low for such a long period of time. so will it affect the real estate market? yes, of course things will slow

down, but things cannot continue at this pace forever. neil: because i was worried that dan might break out the leisure suit, and then all bets are off. thank you both very much. now something that shows the evidence of inflation right when you're going through the drive-through, what you're paying for when you're going through the drive-through. ed renzi after this. ♪ ♪ cheeseburger in paradise ♪♪ my retirement plan with voya keeps me moving forward. they guide me with achievable steps that give me confidence. this is my granddaughter...she's cute like her grandpa. voya doesn't just help me get to retirement... ...they're with me all the way through it. voya. be confident to and through retirement. what's strong with me? i'm ready for anything. find out what's strong with you with fitbit charge 5 and daily readiness.

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♪ >> everything from the restaurant to the grocery store, everything's up. >> i'd say at least, you know, 7-10 to 12% increase. >> the prices are just so outrageous, i can't afford it. >> everything going up from

food, gas prices even building materials. >> they keep on bringing up the prices, the only common sense is to bring up wages of all sorts. >> i just wonder why it's so expensive like living in a shoe box. neil: well, it starts with what you do when you fill up when you're driving, right? and then it continues when you go through the drive-through. it's particularly there that prices have been rocketing and so far, so far a lot of customers are saying, all right, we'll absorb this because we love our fast food. ed renzi is the former mcdonald's usa ceo. he is, like, the yoda of the fast food industry. not at all overweight, but he gets it, understands what's going on there. e., it's remarkable to me -- ed, it's remarkable to me to see all these post-pandemic problems notwithstanding for fast food still out there even with the jump in prices. what do you make of it? >> well, it's a pretty simple thing. in the quick service restaurant industry, it's a convenience and it's a basic commodity of need

for time-compressedded people, so they're going to have to do what they need to survive. although we are seeing a dramatic mix in product shift, more value orientation in our menu selection, things of that nature. restauranteurs are entrepreneurs by nature, and they're making adjustments as they go along to remain profitable. you know, i grew up in the '70s, stay rted work -- i started working for mcdonald's in 1965. i lived through stagflation in new jersey where gasoline lines were out on the street, the police were guarding the traffic flow. i lived through that, and it feels exactly like that right now. neil: yeah. i lived through that myself, my friend. then the question becomes how does it gain traction so fast. a good question in that regard from jonathan in michigan, and i want you to listen to this. >> why does produce and poultry, things of that nature in the grocery store, cost more now, and why is it limited all of a

sudden? neil: why is that, ed? >> well, the cost of production of green, leafy vegetables and that type of thing hasn't changed. in fact, costs have gone up a little bit because the supply of water in the western areas where a great amount of produce is produced. then you've got a huge issue of transportation. when biden got elected back in january before he was -- november before he was even inaugurated, he said he was going to shut down the pipeline and disrupt the oil industry. that means nothing but increases in prices of transportation. so cost of getting goods across the united states has gone up very, very quickly. the price of fuel is going crazy. even on cargo ships, the price of bunker seed to fire those boilers and keep those things moving has gone up. that's immediate, it's right now. and it's reflected in the price of the products when they

finally get to your kitchen table or into a restaurant. neil: that's a very good point, especially if one of those products is your life blood. the festival owner in new york city has a question on this very issue. take a look. >> my question is what is going on with the price of coffee? is it the beans? is it the cost of goods? is it the labor? is it government regulation? and more importantly, am i going to have to raise the price of the cavuto espresso martin think? neil: say it ain't so. what's going on there? >> well, the biggest single reason we've had a disruption in the coffee bean industry and cost is the weather in brazil. brazil is the largest coffee bean producer in the world. there are specialty coffees coming out of colombia that aren't quite so bad. but when there's a shortage, demand goes up, and that mean the price is going to follow. and i hope it's going to abate soon, but you still have the transportation problem because those coffee beans have got to

get from brazil, colombia to the united states. and, you know, i don't know how many containers are sitting out on the ocean right now full of coffee that can't get unloaded. and the cost of getting it here is going up. so i don't think it's going to abate anytime soon. it's tragic because coffee is really an enjoyable luxury that feels like a necessity, and it's going to deteriorate over time cost wise. neil: yeah. and it's not only the products you buy, sometimes it's the pressures that are created as a result. a good starting-off point for peter in new york city who wants to ask you this -- >> [inaudible] i have a big problem with the labor. ask and my question is when is -- [inaudible] people gonna come back to work? because no one's going to work right now. neil: yeah. with all the incentives and big pay boosts, no one's responding. what's going on? >> well, unfortunately, our

federal government and a lot of state governments because of the pandemic and lockdown have rewarded people to stay home. and they do. you know, i can tell you about single mothers particularly that i've talked to that they're getting childcare subsidies to stay at home, and her importantly, they're doing all this home schooling. and when you're a single mother, you don't have many options. neil: right. >> that a takes a very large part of the population out of the work force temporarily, i hope. but restauranteurs are starting to react as are grocery stores can ask and everybody else. i can tell you the manpower in restaurants, quick service restaurants, has gone from 65 employees in the 1980s down to 30 and 35, head for 15. the use of digital the system ises and video -- systems and video, artificial intelligence is eliminating people like crazy. efficiencies in the kitchen, cooking and production is changing.

so this labor thing is a nightmare right now, and filling jobs is unbelievably hard. neil: yeah. and 4.5 million americans just quit the work force. it's wild. very, very quickly, my friend, your sense of how long all this inflation, these spikes last. >> well, you tell me when we're going to get an energy policy that makes more sense than what we have right now. the fact that we're begging opec to produce more oil, the canadians are building a pipeline all the way to the west coast from canada to ship oil out of the central provinces to china. china's buying whatever they can get their hands on. we're selling natural gas to china, and we can't use it here in our own country. it's the most insane federal policy i've ever seen in my life. it just doesn't make any sense. and if this keeps up, i think we've got four more years of this nonsense. neil: we'll keep an eye on it. ed renzi.

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happy monday. president biden announced reappointment of jay powell federal reserve chair. no appointment as vice chair. he is currently a governor of the federal reserve, here is my take away from the president speech. basically i think he said jay, you are my god because in our conversations you promised to maximize employment