SPG Supplement: Is Farmland A Smart Hedge Against Inflation?

This piece originally appeared in the Strategic Planning Group, as a Supplement exclusively for Members. It has been edited for content.

So recently, the New York Observer ran one of its snooty, fawning pieces about hedgies in New York.

“So you’ll give me 2% of your money up front,
then 20% of any winnings,
plus you’ll eat all the losses on my bad bets:
Isn’t that a great deal I’m giving you?” 

Hedgies—hedge fund drones, essentially used car salesmen dolled up in Paul Stewart suits—are morons, for the most part; though they do display a certain rat-like cunning of the low-IQ variety.

That sharp-toothed rodent cunning was on display in the Observer story: These hedgies were boasting about buying farmland left and right, as a hedge against inflation.

So: Is farmland worth buying as a hedge against inflation?

This is a reasonable question.

Bottom line, the answer is: No.

The reason, however, is worth examining in some detail, because insofar as farmland is concerned, there would be a period of time when it is a clever investment, and then a point after which it would be a terrible investment. And as with everything in life, the dividing line between the terribly clever and the terribly stupid is as smeared and undefined as roadkill on an Interstate.

The Money In Blogging

Some readers have criticized me for starting up The Strategic Planning Group.

They object to the fact that it’s a paid site, closed to non-members. One reader wrote, “It's a pity you did not find a way to finance it using advertising—I think you would have retained a larger readership, which in the long run keeps your profile higher.”

Not exactly a $ sign.

Well, see, at the end of the day, it’s not about keeping a high profile—for me, the motivation is to write whatever I want, and earn enough from it so that I can continue.

And that just doesn’t happen through advertising alone.

Let me make an example out of my own situation: My site is one of the more popular economics and finance sites on the web. To put numbers to that claim: In April, I had an average of 13,760 pageviews per day, and an average of 7,167 unique visitors. In May so far, I’ve had 12,850 pageviews per day, and 6,970 unique visitors per day. (At the bottom of this page, there’s a link so that you can verify my stats.)

According to Gongol’s EconDirectory, those figures put me in the Top 10 of econ and finance blogs—very impressive, you would think.

However, the advertising income I have earned from these numbers is nowhere near what would be commensurate with that readership.

“It’s On Like Donkey Kong!”—SPG Is Here

To all my Kind Readers & Wonderful Fans:

We call him Fred, by the way.

This past Wednesday, I launched my new website:

The Strategic Planning Group.

It was not a full-on, wall-to-wall, mass-market, throw-everything-at-it-including-the-kitchen-sink sort launch—quite the opposite, SPG’s launch was more on the QT than the rah-rah!

But even so, the response has been overwhelmingly positive, which is both thrilling, and tremendously satisfying—satisfying in the exact sense of the word: Of achieving what I had set out to do.

SPG isn’t a Blogger Blogspot, thrown together casually, as shaggy as an English sheepdog—on the contrary: The Strategic Planning Group is a polished, carefully built site, the product of several months of work and research, quite a bit of money, and conversations with dozens of experts, both in computing and in economics.

In short, I wanted to put together a tight, polished site—and judging from the Members’ reactions, I think I succeeded.

So to everyone who has joined this exciting new project, I just want to say: Thank you, and enjoy the adventure.

To those who are thinking about joining, I say: Good—better to overthink a decision than to not think about it at all.

And to those who didn’t know about SPG but want to find out more, then go check out the Membership Preview Page and FAQ.

Like Pynchon says: Keep cool, but care.

GL

  

  

SPG Supplement: Is the Gold/Copper Ratio Predicting A Drop In the S&P?

To give my regular readers a taste of what’s on my Strategic Planning Group site, here's this week’s Supplement—though a few days after SPG members got it:

People are always talking about the silver/gold ratio—but the copper/gold ratio seems to be much more predictive of market trends.

My friend Michael Hampton has this very interesting chart—check it out:

The top chart is a ratio of copper-to-gold prices. The bottom chart is of the S&P index. If you notice the timeline, you’ll see the chart covers the last three years.

What Do You Think?

Here’s a presentation video for my new site, the Strategic Planning Group, which will be launching (if all goes well) around next Monday.

What do you all think?



So is it— smart? stupid? agree? disagree? definitely would join? wouldn’t join on my life?

Be as frank as you’d like—I want your honest opinion.

GL

P.S.: Oops! Forgot to make the video public—now it is. Enjoy!

Best Description of the Mortgage Mess EVER

Check out this hour-long interview with William Black—in fact, listen to it twice. He explains simply and straightforwardly how the mortgage fraud was carried out:

Fiscal Spending—The Steroids of GDP

Last week, first quarter GDP numbers came out—they weren’t pretty: GDP grew at a pace of 1.8% per year, during January through March. These figures are supposed to be adjusted for inflation. But if you think as I do that the Bureau of Labor Statistics is off in its inflation estimates, then at this pace, the American economy is probably contracting.

Body-builder, after a round of
Keynesian steroids—
I mean, “stimulus”.

Apropos of the announcement, Brad DeLong said, “Contractionary fiscal policy is contractionary.” Andrew Leonard at Salon added, “When you cut government spending in a slack economy, you practically guarantee a slowdown.”

DeLong and Leonard presuppose several things by these statements. One, of course, is that there have actually been cuts in government spending. Two, that the GDP number would have been better if there had simply been more government spending—so therefore, anyone opposed to increasing government spending is also against increasing the GDP.

But the third assumption they make is the assumption I’m interested in discussing: The notion that the GDP number is something we always want growing. The notion that a positively growing GDP number is always and with absolute certainty the thing we want most, as a society.

First off, let’s put away DeLong and Leonard:

Sorry, But I Don’t Believe This

(Before I begin, I just have to say: Oh boy—here I go really stepping away from the shores of the mainstream.)

When the Bolivian Army killed Che Guevara in October 1967, they displayed his body as proof that he was indeed dead. The Bolivians in fact staged the body so that ordinary people—and the world’s journalists—could get a good view of the corpse, up close and personal.

Ernesto “Che” Guevara’s body on display,
October 1967.

The attached photograph, grisly though it may be, is one of hundreds taken of Che’s body. It—along with the pictures and testimony of hundreds of journalists and ordinary people who saw his corpse—puts to rest any notion that Guevara somehow survived—which of course was the whole point: The Bolivian Army wanted there to be no doubts that El Che was really dead.

My readers know I don’t truck in conspiracy theories. I believe Elvis is dead, I believe Paul never died, I believe 9/11 was a terrorist incident, and I believe Neil Armstrong did in fact land on the moon.

But I don’t believe Osama Bin Laden was killed over the weekend.

The story goes this morning that Bin Laden was tracked down to a multi-storey compound in the middle of the Pakistani hinterlands, where he was shot twice in the head by American Special Forces. These soldiers then took his body, and buried it at sea.

That’s the story. But I don’t buy it.

Just to be clear, I do not believe Bin Laden is still alive. I believe what a lot of intelligence analysts have been privately saying for a long time now: That Bin Laden died of kidney failure in December 2001, and that he was buried by his followers in an unmarked grave in the mountains between Afghanistan and Pakistan.