The Phaserl


This Surprise Asset Outperformed Stocks and Bonds for 27 years

by Simon Black, Sovereign Man:

Out here in Eastern Washington’s Yakima Valley are beautiful, seemingly endless fields of abundance and wealth.

But not ‘wealth’ in the conventional sense. I’m not talking about paper money that’s conjured out of thin air by central bankers.

I’m talking about real wealth. Real assets.

Growing up in a lower middle class household where my parents had to work three jobs each just to pay the rent, I never understood what any of that meant.

Like most people, I used to think that ‘wealth’ was how much money you had in your bank account. And for us there was never enough.

It took me years to realize that wealth doesn’t have anything to do with bank balances… it has everything to do with value creation.

And there is perhaps no better example than agriculture.

Agriculture is one of the most fundamental forms of creation. And it’s so simple. You put seeds in the ground, and something real (and valuable) grows.

It’s an amazing process.

I first got involved in agriculture several years ago when I acquired a large farm in central Chile and saw first hand how much wealth (both physical and financial) could be created.

Planting fruit trees on raw land, for example, is like any other successful startup.

It took Facebook and Google a few years to get their businesses off the ground before they could start producing positive cashflow.

Agriculture can be the same way: it takes a bit of time for the trees to grow. But after a few years, they’ll produce fruit (and profits) for decades to come.

The key difference is that with agriculture, nature does most of the heavy lifting.

Plus, every single person on the planet needs to eat. Not even Facebook and Google have that kind of reach.

This is what makes agriculture such a great investment. The fundamentals are incredibly compelling… almost chilling.

The supply of arable farmland, especially on a per-capita basis, declines every year.

And many major agriculture-producing regions around the world are experiencing extreme water crises.

Yet at the same time, world population growth creates greater demand for food, and rising wealth in developing nations drives more food consumption per person.

Think about it: poor people in poor countries consume very few Calories per day.

When economic conditions change and their financial situations improve, they not only start consuming more Calories, but the quality of those Calories changes.

Instead of consuming grains and vegetables that don’t require much land to grow, they’ll start eating more meat (which requires MUCH more land to produce).

This trend is pretty simple: there are more people demanding more food that requires more land at a time when the amount of land available per person is declining.

With such obvious fundamentals, it seems clear that agriculture is a great long-term investment.

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