Back Country Buying Binge
There’s a structural change now taking place across the western world that will likely shape our future as much as any other phenomenon or development we’ve encountered in our lifetimes. It goes without saying that it will also affect the future of our investments. It’s a development that very few are currently speaking about.
The depopulation of major urban centers has already begun. We’re not talking here about the flight from inner city crime, the challenges of educating children in such an environment or the social instability that’s part and parcel of modern urban America. These phenomena are well documented and have existed for well over half a century. The flight to the suburbs is actually a relatively old story that’s left a gap which has been filled largely by newer immigrant communities – a role they’ve fulfilled astoundingly well. But that’s not likely to continue forever.
What we are referring to a genuine depopulation that results from cities becoming unliveable in the truest sense of the word. It’s a negative feedback loop that begins in economic contraction, leads to fewer work opportunities and growing crime, is magnified by a swiftly dwindling government safety support net, that then further reduces retail spending, destroys more jobs and ultimately sends people little by little out of the urban arena altogether, to the countryside in search of:
- work opportunities,
- more affordable living spaces,
- plots to grow one’s own,
- cover from the dangers of a decaying urban social atmosphere, and/or
- old fashioned charity (something the folklore indicates is more readily available in the country).
The jobs lost in the last several years are not coming back. We are as a country simply no longer competitive with the rest of the world. Blame unions if you want; it doesn’t matter. The same products are now available to us cheaper because they’re produced overseas. There’s no reason for this trend to stop.
More than this, the economy at large is a train wreck in waiting. There will be no soft landing from the mess that will, at some point, hit us full frontal lobe, and send literally millions into the streets looking for gainful employment.
The intelligent are already starting to venture beyond the ‘burbs and are planning for more difficult times. The latecomers will be less prepared. Everyone will be in search of the basics: medicine, seeds, fertilizer and canned goods. Those who are interested in profiting from the specter of this wholesale migration to the wilds will focus on the four G’s: Gold, Guns, Gas and Grub, those items that are certain to be bid higher under such circumstances.
In the time leading up to that upheaval everything will appear to function as normal. The early birds (those ‘nutcases’ who see the writing on the wall and start making their way toward the rural but-nutter lifestyle) will get the pick of the land and will therefore be best situated to survive the mess. But outside of the silly speeches these ‘wackos’ sometimes make, all will be business as usual.
Markets will rise on a wave of printed currencies the likes of which has never been seen. The banking system will heave and groan, this way and that, but is unlikely to buckle until the very last moment – and that event could still be a decade away. Wars will come and wars will go, politicians will deceive and athletes and actors, indeed celebrities of every stripe, will continue to be admired for everything but their characters.
And investors will be duped into believing that business as we’ve known it in America will continue just as it has long, long into the future.
Would that it were so.
Alas, we at Oakshire Financial are in the business of not only correctly forecasting trends and events, but of profiting from the same in the markets. And so in the next few weeks we are suggesting you take a closer look at a few investments that fit with the scenario we’ve discussed above.
The depopulation phenomenon has already started and could kick into high gear should the real estate market take another leg down. At that point, Amerco (NASDAQ:UHAL), the stock holding company of U-Haul International Inc., should begin trucking in all four gears. U-Haul is one of America’s premier do-it-yourself moving and storage companies.
Technically, the pennant forming (in blue) is a bullish continuation pattern. And with all its moving averages rising, there’s much in Amerco to be bullish about. The only worry we have is that the price action is now 60% above both the long term moving average and rising trendline.
Many happy returns,