Robert Shiller: ‘Neither Farmland Nor Housing Has Been A Great Place To Invest Money Over The Long Term’

Yale University Economics Professor Robert Shiller just torpedoed long-held notions about farmland and residential real estate in this country. The Nobel Prize winner, who correctly-called the dot-com and housing busts of the last decade, penned the following on The New York Times website on July 15:

Despite solid price increases over the last few years, land and homes have actually been disappointing investments. It’s worth considering why.

Let’s start by looking at the numbers. The best long-term data on land in the United States is for farmland, which is valuable in its own right and can also be considered a great reservoir that can be converted to housing and other purposes at opportune times.

Over the century from 1915 to 2015, though, the real value of American farmland (deflated by the Consumer Price Index) increased only 3.1 times, according to the Department of Agriculture. That comes to an average increase of only 1.1 percent a year– and with a growing population, that’s barely enough to keep per capita real land value unchanged.

According to my own data (relying on the S&P/Case-Shiller U.S. National Home Price Index, which I helped create), real home prices rose even more slowly over the same period — a total increase of 1.8 times, which comes to an average of only 0.6 percent a year.

What all that amounts to is that neither farmland nor housing has been a great place to invest money over the long term…

(Editor’s note: Bold added for emphasis)

“Neither farmland nor housing has been a great place to invest money over the long term”

Obviously, this goes contrary to what many Americans have believed all along.

However, the fact that farmland can produce income from crops should not be ignored.

Residential real estate may also offer benefits beyond property value. In my case, the single-family dwelling in the Chicago suburbs which my girlfriend and I own is a significant improvement in such areas as security and food production, for example, compared to our previous rental unit in a multi-family building on the city’s Northwest Side.

An interesting piece from Dr. Shiller, which you can read on the Times’ website here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Advertiser Spotlight: Blade HQ

I’ve owned knives since the 1980s. My first one was an official Boy Scout Knife, which I still have and which has seen a fair amount of wear and tear over the years. My second one was a Swiss Army Knife I received as a “best man” gift. I still own that one too, and it’s proven to be quite handy around the house and in the outdoors. I’ve acquired a few more blades over time, each serving as a tool to tackle some specific task (maybe several). As with any tool, shoddily-constructed ones are to be avoided. Knives in particular for obvious reasons. Enter Blade HQ, “Gear Up For Adventure.” The Lehi, Utah-based vendor of knives and other outdoor products helps steer customers away from crap and towards quality. From their Facebook page:

Gear up for adventure at www.BladeHQ.com! We love knives as much as our customers do. Knives make up the bulk of our store, but we also carry a wide variety of other outdoor products to help you gear up for whatever adventure is coming your way.

Founded in 2003, Blade HQ boasts a large number of knives in its inventory. They carry well-recognized brands like:

• Benchmade
• Boker
• Buck
• Cold Steel
• CRKT
• Gerber
• Kershaw
• SOG
• Spyderco

In addition to a number of other blade makers I’m not familiar with.


“Blade HQ Shop Tour- Where knives come from”
YouTube Video

Besides knives, BladeHQ.com sells:

• Knife Accessories
• Outdoor & Survival
• Multitools
• Pocket Tools
• Axes
• Throwing
• Saws
• Flashlights
• Keychain

Prospective customers can search products by:

• New Arrivals
• Exclusives
• Coming Soon
• Brands
• Designers

In addition, there are “On Sale” and “Closeout” sections on the website.

Blade HQ does offer price matching. According to their site:

BladeHQ will match any competitor’s price on identical “in stock” products from competing online stores at time of purchase.

For all domestic orders over $99, shipping is free.

The Blade HQ gang even buys rare knives and knife collections.

Blade HQ has been an Better Business Bureau accredited business since 2006, and is rated “A+” as I type this.

Interested in purchasing a knife or outdoor-related products soon? Check out Blade HQ via the banner ad below and see what they can do for you. Please note that by clicking on the ad and purchasing a product, I receive a commission from the sale.

Blade HQ Knives

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Chicago-Area Residents Renting Egg-Laying Chickens

I’ve come to appreciate the benefits of owning egg-laying chickens from observing preppers/survivalists the last several years. Keeping an egg-laying hen would be something I’d investigate further- if the Chicago suburb I lived in permitted it and our winters weren’t so frigid. For those Chicago-area residents who are permitted to have chickens, I learned from reading my Sunday paper on July 3 that renting egg-laying hens for a portion of the year is now an affordable possibility. Nara Schoenberg reported on the Chicago Tribune website on June 27:

Kelin Petersen knew she wanted a chicken.

The Logan Square mother of three had confided in her best friend, also an admirer of the fluffy barnyard bird. She’d tracked down a good book on chicken care and read it to her kids, who had responded enthusiastically. But it wasn’t until a casual conversation with a farm-savvy friend at church that Petersen finally saw a clear path to her goal.

“You can rent chickens, you know,” her friend said. “We don’t have enough land to do it, but you could totally do it.”

Determined to eat local, live green or just do something a little different, Chicagoans such as Petersen are increasingly renting egg-laying hens for the summer

(Editor’s note: Bold added for emphasis)

As far as costs are concerned, Schoenberg noted later on in the piece:

Chicken rental costs roughly $110 a month, and typically includes two or three chickens, feed, dishes, bedding, and a sturdy wood and wire coop, as well as email, phone or text support…

Good to know. You can read the entire article here on the Tribune website.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Wednesday, July 20th, 2016 Food, Preparedness No Comments

Signs Of The Time, Part 110

The most sobering article I’ve read yet about the deteriorating state of affairs in Venezuela. From Hannah Dreier of the Associated Press yesterday:

Tebie Gonzalez and Ramiro Ramirez still have their sleek apartment, a fridge covered with souvenir magnets from vacations abroad, and closets full of name brand clothes. But they feel hunger drawing near.

So when the Venezuelan government opened the long-closed border with Colombia this weekend, the couple decided to drain what remained of the savings they put away before the country spun into economic crisis and stock up on food. They left their two young sons with relatives and joined more than 100,000 other Venezuelans trudging across what Colombian officials are calling a “humanitarian corridor” to buy as many basic goods as possible…

Some fear what’s taking place in the “socialist paradise” is coming to the United States. I sure as hell hope not, as the International Monetary Fund is predicting 1,600% inflation for the South American country next year.

Regrettably, I do think hyperinflation could be in the cards for us down the road.

“Signs Of A Coming Time”?

An insightful piece by Dreier, which you can read over on the ABC News website here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Hillary Clinton: White Americans ‘Need To Recognize Our Privilege And Practice Humility’

The “favorite daughter” of Park Ridge, Illinois- Hillary Clinton- gave this advice to white Americans Monday at the NAACP convention in Cincinnati, Ohio:

We white Americans need to do a better job of listening when African-Americans talk about the seen and unseen barriers you face everyday. We need to recognize our privilege and practice humility rather than assume our experiences our everyone’s experiences…

(Editor’s note: Bold added for emphasis)

“We need to recognize our privilege and practice humility”

Speak for yourself.


“Hillary: White Americans Need To Do A Better Job Recognizing Their Privilege”
YouTube Video

“Divisive politics” in an attempt to mobilize this particular group of voters for the November election.

Just what this country needs right now as “hard times” fast approach (again).

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Tuesday, July 19th, 2016 Political Parties, Racism, Recession No Comments

Jeremy Grantham: ‘Still No Signs Of An Equity Bubble About To Break’

Right before the weekend, Jeremy Grantham, the British-born investment strategist and founder/former chairman of Grantham, Mayo, Van Otterloo & Co. (currently overseeing $99 billion in client assets), penned an article on the Barron’s website entitled “Jeremy Grantham Warns on Immigration, Brexit.” As part of this piece Grantham, whose individual clients have included former U.S. Vice President Dick Cheney and U.S. Secretary of State John Kerry, talked about U.S. stock prices. He wrote:

Despite brutal and widespread asset overpricing, there are still no signs of an equity bubble about to break, indeed cash reserves and other signs of bearishness are weirdly high.

In my opinion, the economy still has some spare capacity to grow moderately for a while. All the great market declines of modern times- 1972, 2000, and 2007- that went down at least 50% were preceded by great optimism as well as high prices. We can have an ordinary bear market of 10% or 20% but a serious decline still seems unlikely in my opinion. Now if we could just have a breakout rally to over 2300 on the S&P 500 and a bit of towel throwing by the bears, things could change. (2300 is our statistical definition of a bubble threshold.) But for now I believe the best bet is still that the U.S. market will hang in or better, at least through the election

(Editor’s note: Bold added for emphasis)

“2300 is our statistical definition of a bubble threshold”

2,300 on the S&P 500 was the same bubble threshold Grantham indicated in his last quarterly investment newsletter contribution. He wrote in May:

2) that we are unlikely, given the beliefs and practices of the U.S. Fed, to end this cycle without a bubble in the U.S. equity market or, perish the thought, in a repeat of the U.S. housing bubble; 3) the threshold for a bubble level for the U.S. market is about 2300 on the S&P 500, about 10% above current levels, and would normally require a substantially more bullish tone on the part of both individual and institutional investors; 4) it continues to seem unlikely to me that this current equity cycle will top out before the election and perhaps it will last considerably longer…

As I type this Monday afternoon, the S&P 500 stands at 2,167.

An interesting article by Grantham, which you can read in its entirety here on the Barron’s website.

By the way, I noticed there’s a comment attached to that piece from “Christopher Hill.” That is not from me.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; a qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Peter Schiff: ‘This Is A New Leg Of The Gold Bull Market’

Economist, financial broker/dealer, and author Peter Schiff was interviewed by Kitco News Editor-In-Chief Daniela Cambone last Friday out at FreedomFest in Las Vegas. Schiff, who correctly-called last decade’s housing crash and the global economic crisis, believes gold is entering a new phase in a secular bull market that began back around the turn of the millennium. He told viewers:

I think gold is not only going to re-test the highs from 2011 when it was close to $1,900, but it’s going to surpass those highs and move into much higher territory

I think this is a new leg of the gold bull market. I mean gold’s been in a secular bull market since 2000, 1999-2000. We had a cyclical bear market that I believe ended with the Fed hiked rates in December. And now we have the new leg of the bull market, which I think potentially could be an even bigger leg than the first leg, which saw gold go from sub-$300 to close to $2,000. So if this leg is bigger than that, you can just imagine how high the price might go.

(Editor’s note: Bold added for emphasis)


“We’ve Entered a New Leg of a Gold Bull Market”
YouTube Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page. A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Tags: , ,

Message For Chicago, Cook County, And Illinois Readers

Readers of Survival And Prosperity might get the wrong impression that I’m rooting for Chicago, Cook County, and Illinois to “fail” based on my routine blogging about their financial, crime, and political woes.

Actually, I do this because I care deeply about the region and its residents.

It’s been my experience that Chicagoans and Illinoisans are pretty decent people overall. I’ve found many of them to be down-to-earth and quick to lend a helping hand to neighbors and strangers alike.

It’s my personal opinion that these woes (interconnected in my mind) I speak of will only intensify in the coming years. The trend is not our friend here, and if anything, since many of the people who helped bring about this mess are still in charge, is it reasonable to expect they’ll be the ones to fix it?

In the meantime, I predict many Illinoisans will be subject to varying degrees of financial and physical pain while this debacle plays out.

As this is a plausible scenario, have local readers of Survival And Prosperity contemplated what’s at stake should conditions keep deteriorating? What would be your personal exposure if events play out the way I expect them to? Financial vulnerabilities? Personal safety shortcomings? Individual circumstances will undoubtedly vary.

Are the wheels turning in your head?

Good. That’s what I’m trying to accomplish with such posts.

The intent is not to scare. Rather, it’s rooted in care.

It’s my hope that informing Chicago, Cook County, and Illinois residents of the precarious situation at hand and providing food for thought might aid successful navigation through what will likely be unfamiliar territory for most.

Wishing everyone all the best with that,

Christopher E. Hill
Editor

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Quote For The Week

“A ship in harbor is safe, but that is not what ships are built for.”

-John Augustus Shedd (American author. 1859-?)

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Tags:

Monday, July 18th, 2016 Quote For The Week No Comments

Former CIA Deputy Director Warns After Nice: ‘I Think It’s Just A Matter Of Time Before We See Attacks Of This Size Here In The United States’

Here’s a worrisome prediction from a former top “spook” about future terror attacks carried out by Muslim extremists. Former CIA deputy director and current CBS News senior security contributor Michael Morell warned viewers on CBS This Morning Friday:

I think things are going to get worse before they get better. As we put more pressure on them in Iraq and Syria, they are going to have a greater incentive to conduct attacks, to inspire attacks because they want to show they’re still relevant. And as we are more successful in Iraq and Syria, all of those thousands and thousands of fighters who went there are going to start coming home. And so you’re going to see more attacks by people who went there, were trained, have military experience, come back home, conduct very serious attacks

I think it’s just a matter of time before we see attacks of this size here in the United States. I have no doubt about that. We’re going to have to adjust to their tactics. The use of a vehicle as a weapon is something that terrorists have talked about for a long time. DHS, FBI put out a report in 2010 warning of this. They’re starting to use it. That’s very difficult to defend against. So, we’re going to have to look at their tactics and respond. We’re going to have to start putting concrete barriers between the flow of vehicles and groups of people.

(Editor’s note: Bold added for emphasis)

CBS News Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Survival And Prosperity
Est. 2010, Chicagoland, USA
Christopher E. Hill, Editor

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(Memorial Day Weekend 2007-2010)

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