May 25, 2011Going back to the land has always been thought of as a thing for hippies, eco-nuts, and doomsday survivalist, but now hedge fund managers are jumping on the bandwagon too.
The New York Observer recently spoke to such a hedge fund manager working on a fund that ranks as approximately the 15th largest farmer in America.
Today, the increase in the purchase of farmland both in America and abroad is so drastic that in February, Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, warned against the possibilities of a farmland bubble.
The recent spike in investments of farmland is being driven by fear. The hedge fund manager and others see a doomsday scenario brought on by a dollar crisis, out of control inflation and an uncertain political climate both domestically and globally.
“The CPI supposedly today is something like 1.5 percent. We think the actual rate of inflation is something closer to 6 or 7 percent on an annual basis,” said the hedge fund manager. “It’s also not about what it’s been over the last 10 years; it’s about what it’s going to be over the next 10 years.”
Does he think this is an end of the world situation?
“It really is. I tell my fiancee this from time to time, and I’ve stopped telling her this, because it’s not the most pleasant thought,” he said. “We just can’t keep living the way we’re living. It’ll end within our lifetime. We’re just going to run out of certain things. We’ll just have to learn how to adjust.”
With recent news that the World Food Program is running out of food (http://www.upi.com/Top_News/World-N…) and the U.S. may not be far behind (http://www.dailyfinance.com/2010/01…), things are not looking good.
“Sometime in the next few years, we’re going to have very serious shortages of food everywhere in the world,” said investor Jim Rogers on CNBC. “And prices are going to go through the roof.”
The new information is just another reason this may not be a bad time for regular people to start growing their own food and even investing in farmland.