The Wuhan Virus Will Impact the Land Market – Week 2

The Village Idiot:

Sorry for the length of this blog. I have rewritten it four times to minimize its length.

In my lifetime, we Americans have used our grocery stores as our pantries. Tuesday, I had to go to a grocery store to pick up a prescription and quickly walked a few aisles to see how they were stocked. When I performed site selection work for an upscale grocer, I learned about “facing” product on a shelf. In this grocery store, goods were available but there were some shelves with little or nothing on them and some others were “faced” to disguise the actual supply.

Through February, Trump had our economy humming like a 16-wheeler moving down the interstate at 70+ MPH. But that tractor trailer has hit an unmovable object and the wreckage is now unfolding across our great country. People are suffering. This is only the beginning. Jobless claims will continue to soar, small businesses are closing, entrepreneurs that labored to build a company are seeing it collapse, and they are facing laying off employees along with their personal financial ruin.

Americans are correctly undertaking to save the lives of millions of fellow Americans, a vestige of our former status as a Christian country. But the painful ripple effects have just started. This crisis will be a two-year experience with periodic goods news but a recovery in several stages:

  1. Stimulus Bills – will build a floor under the collapse providing some stability by the end of April;
  2. An initial, tepid recovery will start once therapeutics are available in sufficient quantity combined with a medical system that has gotten its feet under it (my guess is late June);
  3. A second stage of recovery will occur in one year when a vaccine is in sufficient supply to vaccinate every American against this new disease that will be with us forever;
  4. The final stage will come when the bankruptcies have cleared away the debris and businesses have gotten their back on their feet so that they can expand again (2022).

Our politicians can be divided into two camps – those who actually care about their fellow Americans and those who just want power. The latter group are the ones who believe and act on the motto “Never waste a crisis” which omits “to build your power base”.

The Third Stimulus Bill passed by Congress in March was for $2 Trillion of economic support plus $400 Billion of “Never waste a crisis to build your power base” for a total of $2.4 Trillion. People are being destroyed and dying but some elected officials wanted to expand their power base. What is your word for their behavior? Those need to be voted out of office this fall.

Over the last several decades, we Americans have been lulled by globalist leaders and media who promised us cheap stuff as our manufacturing base was exported to China. China must have laughed as they “forced” our companies to give them US technology in order to build factories in China to then sell back to us cheap stuff. I have seen pictures of a new Chinese navy ship that is identical to our newest ships even to the point of having in English an arrow pointing to the Head. Maybe that was intentional on the part of the Chinese.

Does the following definition from Britannica sound familiar?

State mercantilism
Mercantilism is an economic practice by which governments used their economies to augment state power at the expense of other countries. Governments sought to ensure that exports exceeded imports and to accumulate wealth in the form of bullion (mostly gold and silver). In mercantilism, wealth is viewed as finite and trade as a zero-sum game.

We probably both learned that more than 80% of our medicines and medical supplies are manufactured in China when Premier for Life (Dictator) Xi was quoted in the official Chinese Communist newspaper two weeks ago as saying that the Americans had better be nice to the Chinese or they “… would let us drown in an ocean of coronavirus”. Since the penalty in China for misquoting Xi is disappearance, death, or both I am confident that quote was not “fake news”.

Please note the following Grant Massie Land Company blog that first appeared on July 11, 2018.

While on vacation I read seven books. My favorite was the book entitled “Safe Passage” by Kori Schake. Ms. Schake researched the history of Hegemons, the one country that so dominates at any point in history that it exercises control over the actions of all the other countries in the world at that point in time.

In history there have been a number of Hegemons. Think of the Babylonian Empire, Alexander the Great, The Roman Empire, etc. From her research the transfer of power from one Hegemon country to another occurred via military conquest, except for one instance.

In her book Ms. Schake discusses the single peaceful Hegemonic transfer of power… from Great Britain to the United States of America (USA) over the period of 1823 to 1923. Those dates are derived from two treaties that she feels bookend the transfer that was finalized as a result of the ripple effects of World War I.

For over 150 years Great Britain ruled the world because of its empire and dominate military. Significantly, the shift to the United States of America being the Hegemon ended the age of European Empires as the USA exercised its Hegemonic position to replicate around the world our values of democracy, self-determination, and free trade.

Armed with the information in “Safe Passage”, one realizes the significance of the disagreement over trade that is currently occurring globally between the USA and China, Europe, and NAFTA. This is not a simple “trade war”, this is a Hegemonic Conflict. The outcome is critical to our economic future. We will explore what that means over the next few weeks.

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.

Now consider these facts:

  1. Last fall, Xi traveled to Russia to talk with Putin about how they could work together;
  2. In the middle of a collapsing economy and failing banks, the first Communist Party Central Committee meeting in perhaps 20 months (since Xi consolidated power) gave Xi a medal;
  3. Wuhan is the location of China’s Category Four (Bio-weapon Grade) lab where they were studying the coronaviruses on animals;
  4. China did not disclose the virus problem, arrested the doctor that alerted the medical community to the virus, he later died of the virus, and the travel of millions of Chinese to the USA only stopped when Trump prevented it for which he was criticized by the media and Democrats who were trying to impeach him.
  5. While not sharing data on their virus, China has been in full propaganda about saving the world with medical supplies.

After launching the attack on Pearl Harbor on the morning of December 7, 1941, the top Japanese Admiral is quoted as saying that he feared that “Japan has awakened a sleeping giant”. He was prescient. My prayer is that Premier for Life Xi has similarly awakened us.

The Wuhan Virus Pandemic is an historic event. I look forward to the enormous and exciting positives our Lord brings into reality from it. Over the next few weeks, we will estimate the cost to the USA for playing the village idiot to the Chines in return for cheap stuff. We will also explore some of the potential positive and negative ripple effects relative to our economy in general and the land market in particular.

The Apostle Paul is one of my favorite historical characters. Paul successfully spread the gospel in the middle of a hostile, secular (pagan/heathen) society similar to the USA today. You may want to read Ephesians Chapter 6:10-17. Focus on verses 13 & 14 “Therefore take up the whole armor of God, so that you may be able to withstand on that evil day, and having done everything, to stand firm”. (Oxford University Press, New Revised Standard Version).

God is in control and if he is on our side, who can stand against us. We have to stand firm in our faith in Him and use our talents to their fullest, but we are only responsible for the effort while God is responsible for the result. I serve an awesome God.

Stay healthy,
Ned