There’s an old belief that the safest investment in the world is and always will be land. Everybody needs land for one thing or another, be it to build new homes, commerce centers, or to grow food. However, I think that too many people forget that in tough economic times, human necessities remain. Which is why people should be considering putting money not just into the land, but into the food that might be grown on it.
I’ve heard a lot of comparisons lately between the US economy and post World War I Germany. The fear of hyperinflation seems to be spreading. And I’ll admit that if we continue to borrow indiscriminately and if we somehow try to print more money, this could be a real concern. However, I also believe that those in charge of our economic policy can and have learned from the past (hence the return to provable Keynesian models rather than the kind of mindless pure free market nonsense that even Milton Freedman stepped back from before his death), and that the lessons for investors from this sort of comparison can be remarkably cogent.
Even in Weimar Germany, not everyone lost money. Some gained, by definition. The runaway inflation made it hard for everyone, but farmers actually started to do quite well. This is in large part because their commerce started from dirt and labor, both of which were abundant and cheap. From that point, their product remained the same regardless of what the mark was valued at, so they were able to sell without having to deal with the inevitable reduction in value that trading along multiple avenues entailed. If every person in line has to raise prices in order to make a profit, but the value of what they’re trading for is falling continually, then literally every lost second means higher prices to the next guy. For the farmer, they are never the next guy.
With the dollar on shaky ground right now, there’s something to be said for buying up food contracts. The odds are in favor of the dollar continuing to drop for a little while, so buying now will provide ample opportunity to make a profit on the venture. The risk is a currency collapse, but the direction of the economy for the past few months doesn’t seem to indicate to me that that’s a danger. However, it’s worth considering an investment in grains, vegetables, and domestically produced foodstuffs.
