Asset pricing post-covid; Federal deficit spending is now out of control
Seeing how commodities spike during wars – maybe that’s part of the logic behind digital Bill Gates tying up tangible assets in farmland. Looks like Kondratieff wave cycle is calling for a sustained run on Commods — which would coincide with ww3… and supportive of your call on SFRs and cash flowing assets
The enemy has opened the barn doors, the horse has been let loose, and there is nobody willing to put up a fight. Those who don’t own the income generating assets will continue to be steamrolled into poverty. There is nobody coming to our rescue. We are on our own now in this functional financial dictatorship.
Click chart to enlarge
Farmland and SFRs; there are still good deals out there. The structural replacement cost on my insurance policy of my last SFR purchase was greater than what I paid for the property. In essence, I received the built-out lot and mountain views for no extra charge. Replacement costs on my policies are up about 50% in the past 6-7 years, and that’s just for the structure.
Moreover, home builders are having an increasingly difficult time procuring materials at a reasonable price, while labor costs continue to rise and workers are becoming more scarce at current wage levels. The concept of affordable housing is a myth.
As long as the govt continues spending like they have, there will be no let up. Moreover, the central banks with their QE programs have been able to keep real bond yields in the negative for a sustained period of time. While this facilitates government largesse, it all elevates asset prices.
The smart people are looking at what we are observing and are holding and adding to their assets. These savvy investors are looking at the DC kayfabe wrestling match between the Democrats and Republicans as a golden opportunity to pad to their net worth and increase asset cash flows.
Tyranny has never been so profitable, which is why our adversary is having so much success.