http://www.thedailycrux.com/content/2827/Guru Marc Faber, investing guru and publisher of the Gloom, Boom and Doom Report, said today that record high deficits from government spending and near-zero interest rates will create a great deal of inflation %u201Cdown the road.%u201D %u201CMoney printing will be unprecedented because the deficit will need to be financed,%u201D Faber said, and most of... [more]
http://www.thedailycrux.com/content/2827/Guru
Marc Faber, investing guru and publisher of the Gloom, Boom and Doom Report, said today that record high deficits from government spending and near-zero interest rates will create a great deal of inflation %u201Cdown the road.%u201D
%u201CMoney printing will be unprecedented because the deficit will need to be financed,%u201D Faber said, and most of this money will flow into %u201Cspeculative assets,%u201D pushing the stock market, as well as gold and commodities much higher.
Faber continues to tell investors to buy equities and stay away from bonds and cash. He also thinks investors %u201Chave to own some resources, some commodities, some mining companies and some physical precious metals,%u201D and can%u2019t understand %u201Cwhy someone would hold dollars and not own gold.%u201D
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Response by ericho75
almost 17 years ago
Posts: 1743
Member since: Feb 2009
I'm not a fan of Faber but...i think he's correct.
"Cash is Trash"
Inflation + low rates helps erode debt but at the same time it's going to destroy your cash on hand.
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Response by PMG
almost 17 years ago
Posts: 1322
Member since: Jan 2008
I've been saying that the play is the stock market, not NYC property. For posters who point out that CD rates are so low, and that NYC property is overpriced, common stocks seems the obvious place to look for value. You can invest in some dividend paying stocks that yield more than CDs, or about the cap rate on a NYC condo, with daily liquidity and higher probability of near term appreciation. Yes, you have a lot more risk, but that is the point of "Cash is Trash" investing. If you are more conservative, you can search out 6% "A" rated corporate bonds. These also have more risk than CDs but if you buy wisely, you'll be rewarded with a lot more income.
"
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Response by Riversider
almost 17 years ago
Posts: 13573
Member since: Apr 2009
Farmland!
http://www.wisconsinagconnection.com/story-national.php?Id=1911&yr=2009 As home prices continue to slide nationwide, the value of farmland is setting records. According to an article by the USA Today, demand for grain for food, fuel and export, along with low interest rates and a weakened dollar have raised farmland prices by double digits the past two years. Average values have doubled since 2000.
Farm real estate prices rose 20% to 23% in Iowa, Nebraska, South Dakota and Wyoming in 2007, according to Farm Credit Services of America, an agricultural lender.
The Federal Reserve Bank of Chicago reports that prices rose 15% for the first three quarters of 2007 in its district, which includes Iowa and parts of Illinois, Indiana, Wisconsin and Michigan. That's on top of a 14% increase nationwide in 2006--to a record average of $2,160 an acre--the U.S. Department of Agriculture says. Figures for 2007 will come out in summer.
Meanwhile, the demand for ethanol has gotten much of the credit for increasing land prices. But experts point to other factors, including the low value of the dollar, which makes U.S. exports relatively cheap.
Economists predict that farmland will appreciate 6% to 12% annually over the next three years, on top of average annual farm income of 4% to 5%.
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Response by PMG
almost 17 years ago
Posts: 1322
Member since: Jan 2008
No, if you believe in farmland idea, buy Archer Daniels Midland (ADM), an agricultural stock instead. I's liquid, can add it to your retirement account, and yields close to 2% at today's price.
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Response by notadmin
almost 17 years ago
Posts: 3835
Member since: Jul 2008
exactly, add to that tiny transaction costs and no property taxes (renting from the state/local government according to some) that can make your land investment a real money pit.
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Response by Riversider
almost 17 years ago
Posts: 13573
Member since: Apr 2009
exactly, add to that tiny transaction costs and no property taxes (renting from the state/local government according to some) that can make your land investment a real money pit.
Good arguments in favor of buying ADM(supermarket to the world) for sure, but keep in mind that the price of Farm Land and the performance of ADM are not perfectly correlated.
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Response by notadmin
almost 17 years ago
Posts: 3835
Member since: Jul 2008
sure, but why would you want them to be? if the argument is that the profitability in the farming sector will go up, then get the productive part, not the other.
you can buy and rent it out. but it has to be dirt cheap to cover your costs and that only comes when highly leverage farmers face years of droughts and when credit to buy land dries up (there's plenty still imho). so the best might be to buy land in a mkt without access to credit for that (otherwise prices are totally inflated, like housing is here). buying land in southamerica, ukraine might pay for ex, but not USA (imho)
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Response by Riversider
almost 17 years ago
Posts: 13573
Member since: Apr 2009
Well maybe not for my P.A. but Insurance companies and hedge funds do practice direct investment.
Clearly this is a mental exercise, same as renters who theorize about 5000 square foot Condo Prices they cannot afford. Plus there may be vehicles available, (mlp's).. haven't really looked into it, but do think, "the idea" holds value.
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Response by notadmin
almost 17 years ago
Posts: 3835
Member since: Jul 2008
well, (luckily for me) investing is a mental exercise. the trigger comes only after the mental part is done with.
I'm not a fan of Faber but...i think he's correct.
"Cash is Trash"
Inflation + low rates helps erode debt but at the same time it's going to destroy your cash on hand.
I've been saying that the play is the stock market, not NYC property. For posters who point out that CD rates are so low, and that NYC property is overpriced, common stocks seems the obvious place to look for value. You can invest in some dividend paying stocks that yield more than CDs, or about the cap rate on a NYC condo, with daily liquidity and higher probability of near term appreciation. Yes, you have a lot more risk, but that is the point of "Cash is Trash" investing. If you are more conservative, you can search out 6% "A" rated corporate bonds. These also have more risk than CDs but if you buy wisely, you'll be rewarded with a lot more income.
"
Farmland!
http://www.wisconsinagconnection.com/story-national.php?Id=1911&yr=2009
As home prices continue to slide nationwide, the value of farmland is setting records. According to an article by the USA Today, demand for grain for food, fuel and export, along with low interest rates and a weakened dollar have raised farmland prices by double digits the past two years. Average values have doubled since 2000.
Farm real estate prices rose 20% to 23% in Iowa, Nebraska, South Dakota and Wyoming in 2007, according to Farm Credit Services of America, an agricultural lender.
The Federal Reserve Bank of Chicago reports that prices rose 15% for the first three quarters of 2007 in its district, which includes Iowa and parts of Illinois, Indiana, Wisconsin and Michigan. That's on top of a 14% increase nationwide in 2006--to a record average of $2,160 an acre--the U.S. Department of Agriculture says. Figures for 2007 will come out in summer.
Meanwhile, the demand for ethanol has gotten much of the credit for increasing land prices. But experts point to other factors, including the low value of the dollar, which makes U.S. exports relatively cheap.
Economists predict that farmland will appreciate 6% to 12% annually over the next three years, on top of average annual farm income of 4% to 5%.
No, if you believe in farmland idea, buy Archer Daniels Midland (ADM), an agricultural stock instead. I's liquid, can add it to your retirement account, and yields close to 2% at today's price.
exactly, add to that tiny transaction costs and no property taxes (renting from the state/local government according to some) that can make your land investment a real money pit.
exactly, add to that tiny transaction costs and no property taxes (renting from the state/local government according to some) that can make your land investment a real money pit.
Good arguments in favor of buying ADM(supermarket to the world) for sure, but keep in mind that the price of Farm Land and the performance of ADM are not perfectly correlated.
sure, but why would you want them to be? if the argument is that the profitability in the farming sector will go up, then get the productive part, not the other.
you can buy and rent it out. but it has to be dirt cheap to cover your costs and that only comes when highly leverage farmers face years of droughts and when credit to buy land dries up (there's plenty still imho). so the best might be to buy land in a mkt without access to credit for that (otherwise prices are totally inflated, like housing is here). buying land in southamerica, ukraine might pay for ex, but not USA (imho)
Well maybe not for my P.A. but Insurance companies and hedge funds do practice direct investment.
Clearly this is a mental exercise, same as renters who theorize about 5000 square foot Condo Prices they cannot afford. Plus there may be vehicles available, (mlp's).. haven't really looked into it, but do think, "the idea" holds value.
well, (luckily for me) investing is a mental exercise. the trigger comes only after the mental part is done with.