Land Ho!
By Staff News & Analysis - September 22, 2010

Investors seeing farmland as safer bet than stocks … Wary of fluctuations on Wall Street, more wealthy Americans, private funds and foreigners are putting money into parcels of cornfields, fruit orchards and other U.S. agricultural products. Carl Evers checks almonds near Bakersfield. His company manages about 30,000 acres of farmland for a Boston-based investment firm. Reporting from Kern County, Calif. — As investors tire of Wall Street's roller coaster, more of them are plowing their money into land — farmland. Few people understand this shift better than farm manager Carl Evers. On a recent morning, Evers steered his pickup truck through a Central California almond grove, his drawling sales pitch at the ready. Evers is co-founder of Farmland Management Services, which runs about 30,000 acres of nut groves, fruit orchards and wine grape vines for a Boston investment firm. Sunburned and stocky, tugging down his wide-brimmed hat, he talked about how farmland — and the food it produces — is the safer bet these troubled days. – LA Times

Dominant Social Theme: Getting back to nature is always a good idea.

Free-Market Analysis: Savvy investors – having realized that the stock market is not necessarily the way to generate terrific riches – are going back to the land. The dominant social theme might be, "Who can trust these paper products? Give us tangible, productive investments that we can run through our fingers! Dirt is a deal."

There is some irony in all of this – as well as good deal of desperation, we'd have to believe. The Baby Boomers who have recently lost jobs, savings and investments, are turning to the land for speculative salvation, and we are old enough, collectively, to remember a time when "back to the land" was a young, hippie commandment. Communes, collectives and cooperative ventures sprouted through America and possibly Canada too.

Somewhere between the 1970s and 1980s, we would have to believe that most of those cooperative ventures shut down, victims of financial illiteracy and the tragedy of the commons. Now, chastened and worried about retirement, Baby Boomers turn their yearning eyes back to the land. But this time there is probably less resoluteness to live off the land and more of a perspective that the land may yield investment income. Good luck with that!

We try not to be too scathing about American Baby Boomers though it is often a chore. Given what is available on the Internet, there really is little excuse to be dumb about money and its manipulation by the power elite. But hope springs eternal, greed is inextinguishable and as we pointed out just yesterday the central-banking economy of the West is forever blowing bubbles. Surely land may be the Next Big Thing.

It will doubtless be flogged that way. Real estate is as certain as the stock market (or most any other investment for that matter) to swell and subside with the vagaries of elite money printing. Bubbles are everywhere, even, eventually, in gold and silver. The difference however is that with gold and silver, the physical stuff anyway, you know what you get. Invest in the stock market or in land and you may be left out of the inevitable rise and fall of asset classes.

During the 1980s, real estate limited partnerships were seen as a kind of "can't miss" investment. Of course the stock market itself was looked on that way – until 1987 when it crashed in October. REITS and partnerships limped along for a while but increasingly, they faded, victims of a collapsing asset bubble. The fall of limited partnerships spelled the end of the famous Shearson brokerage firm and put paid to the tumultuous career of Peter Cohen as well.

And now the reprise. Real estate, of course, provides profits for many. But like the stock market, people don't know when to get out – and too many times profits are given back, and more besides, when a hot market finally subsides. One hears about the victories, but the defeats, when boom turns to bust are rarely mentioned, for obvious reasons.

Yet still, the idea, somehow, is to retire off other people's ideas and efforts. The idea is that the market is smarter than you are – and if you merely put aside your own sense of self-worth and trust in the worthies running Coca-Cola and General Motors (oops!), your boat shall be lifted. Pick the stock, bond or parcel of land and your investment shall be doubled, tripled or quadrupled. But this is not often how life works. There is no sure thing, though many are in search of one. This is another dominant theme of course.

In this era of the Internet, are eyes are opening finally? We'd like to think so. It turns out that almost the entire social contract that the power elite has sold Western citizens is deeply flawed; perhaps it was after all merely a promotion. The Greatest generation went to war to defeat Hitler and fascism, for instance, but today the same sort of specter haunts the West itself. American Baby Boomers, raised in a time of plenty never doubt their lot was more of the same. Yet that does not seem so likely anymore.

In the 20th century it was a good deal more difficult to examine one's environment. But as we have pointed out, in the 21st it is a great deal easier. And how can those who have suffered through the 2000s put their faith once again in "investments?" Technology was a sure thing in the late 1990s; real estate was going to go up forever in the 2000s; the stock market is certain to bounce back once Ben Bernanke tunes the money supply properly …

The old verities of life still seem the soundest to us. Learn a trade, participate in local or regional industry, re-involve oneself in family farming … These are perhaps sounder lifestyles than those modernity has offered. We see this sort of approach in Switzerland and other countries that have managed to retain some level of a republican heritage. The impetus of the power elite has been ever to shove people into cities where they are helpless to fend for themselves and suffer from the vagaries of the boom/bust job market.

After Thoughts

This has been the fate of American (and European) Baby Boomers, who were taught by public schools that the modern lifestyle was a sophisticated one and that white-collar jobs were far more valuable than blue collar ones. But, as we have long pointed out, it was all a kind of Dreamtime. Government is not going to care for anyone. Regulatory democracies are ultimately run by shadowy elites who are interested in their own pocketbooks; the myth of a caring government or politician is just that – a myth. Unfortunately, "investments" for many people much of the time are not going to pay off. The only certain things in life (as certain as life gets) are the sweat of one's own brow and the retained value of gold and silver.

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