« Character | Main | The Good News »
Financial Turmoil Creates Investment Opportunity
By John | April 10, 2008
The recently announced policies of the Federal Reserve (to lower interest rates and provide liquidity to U.S. financial institutions) and of the Federal Government (to bail out mortgagors facing foreclosure) reinforce my opinion that rural land is, and will be in the future, an excellent investment.
Lowering interest rates and pumping up the money supply while asset values are exploding on the upside is a perfect formula for increasing inflation and continuing the downward spiral of the dollar in international currency exchanges.
Allocating taxpayer funds to bail out real estate borrowers demonstrates that, given a choice between responsible financial management and enhancing political standing during an election year, responsible financial management loses every time.
How does this affect you as an investor? You had better stay clear of any dollar denominated assets and look for “real” assets that retain their value despite government policies. In fact, the more irresponsible government policies become ,the more astute investors are being driven towards inflation-hedge type investments, such as rural, vacant land. The more investors move into rural land investments, the higher the price. The higher the price, the more investors move into rural land. Does this sound like the high-tech stock market of the 1990s? The difference is that new stock can always be created. Land is in limited supply.
Look for rural land prices to continue escalating. The movement is in its infancy.
Topics: Rural Land Investment |