The Impact of Bubbles – Week 8

Conclusions and Recommendations:

We have laid out for you in this series of blogs what we see as the most significant positive and negative economic forces that will impact the USA in 2018 and late 2019. Here is a brief summary of what we believe will occur:

  1. 2018 will see significant economic growth because of the new tax law;
  2. We will enter 2019 with a full head of steam in our US economy;
  3. The Fed will continue to raise interest rates as they “normalize” the financial markets;
  4. Significant inflation will occur to thereby relieve the pressure of our debt;
  5. Ultimately, The Fed will have to harness inflation with a recession as a part of that process.

The wise investor will:

  1. Recognize that not all land is equal in quality;
  2. Recognize that Quality tracts will benefit the most from inflation;
  3. Use the “Up” economy of the next couple of years to prune their portfolio and accumulate cash;
  4. Thereby get in position to buy discounted land assets in the recession that will occur.

It is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is land.