In yesterday's Digest, editor in chief Brian Hunt gave an overview of the soaring farmland prices in the U.S. Farmland in his birthplace – Ringgold County, Iowa – is selling for a record $4,124 an acre. (And Ringgold's land is some of the cheapest in Iowa.) Prices in the county jumped 19% last year... And that's on top of a 32.5% year-over-year increase in 2011.
Soaring farmland prices are a clear sign that the "Bernanke Asset Bubble" is pushing asset prices higher and higher. And farmers aren't just enjoying rising land prices. Farm income is also soaring…
According to the latest report from the U.S. Department of Agriculture (USDA), net U.S. farm income is projected to increase nearly 14% to $128.2 billion in 2013 – its highest level since 1973.
The USDA is also forecasting record crop production this year, especially for corn... Farms should produce a record $81.7 billion of corn in 2013, after recovering from last year's drought.
The value of livestock is also forecast to increase 3.5% this year. That's good news for our friend Doug Casey, who has become an Argentine cattle rancher. Last July, he told us...
Cattle are cheaper now, in real terms, than they've ever been. And not only is the U.S. herd the smallest in 60 years, so is the Argentine herd (which is about 70% as large). I think they're a super investment now.
Speaking to the Chartered Financial Analyst (CFA) Society of Atlanta on February 6, billionaire investor and commodities bull Jim Rogers sang agriculture's praises, saying he "can't conceive any better industry" right now.
Rogers believes the role of finance in our country's growth is waning... and we're shifting to a society where producers of real goods are better-valued.
"Move to the country. Be a tractor dealer or fertilizer salesman. If that's not for you, open restaurants where there are farms," Rogers told the audience. He even urged journalist Ruchika Tulshyan, prior to his speech, to open a Lamborghini dealership in the country... "The farmers will be driving the Lamborghinis."
Meanwhile, farm-equipment manufacturer Deere & Co. posted its 11th consecutive quarter of record earnings... The company earned $649.7 million in the quarter, up from $532.9 million a year ago. And it blew away analyst expectations. (We place little value on analyst expectations... however, the market reacts to them.)
Revenue increased to $7.4 billion, up from $6.8 billion last year.
Net income attributable to Deere was $649.7 million, or $1.65 per share, for the first quarter ended January 31, compared with $532.9 million, or $1.30 per share, for the same period last year.
In its press release following the announcement, Deere forecasted its performance for the rest of the year...
Company equipment sales are projected to be up about 6 percent for fiscal 2013 and up about 4 percent for the second quarter compared with the same periods of 2012. For the full year, net income attributable to Deere & Company is anticipated to be approximately $3.3 billion.
Although Deere is looking to achieve strong results in 2013, persistent global economic and fiscal concerns warrant continued caution. "We're confident our investment in new products and additional capacity will help Deere fully capitalize on the world's growing need for food, shelter and infrastructure in the years ahead," [CEO Samuel] Allen said. "However, the near-term outlook is being tempered by uncertainties over fiscal, economic and trade issues that are undermining business confidence and restraining growth."
Following Monday's note on Japan's economic and fiscal policy minister Akira Amari calling for the Nikkei to hit 13,000, the benchmark Japanese index hit another high...
The Nikkei – which was closed Monday for a public holiday – jumped 1.9% Tuesday to close at 11,369 as the yen weakened to a 33-month low against the U.S. dollar. The yen has dropped nearly 8% against the dollar this year. The drop extended as Asian Development Bank President Haruhiko Kuroda, a potential Bank of Japan governor, voiced support for Prime Minister Shinzo Abe's inflationary policies...
As a reminder, the Bank of Japan – Japan's central bank – pledged to buy unlimited amounts of assets through 2014 to boost inflation to 2%.
In an interview with Kyodo News, Kuroda said the introduction of a 2% inflation target was "epoch-making" and should be achieved "in about two years."
No surprise, but the U.S. Treasury approves of Japan's "deflation beating" actions to weaken the yen.
Speaking at a news conference in Washington on Monday, a U.S. Treasury official cheered on the Bank of Japan's inflation-baiting… Lael Brainard, the undersecretary for international affairs, said the U.S. supported the efforts. She added that the G7 – an organization that includes the finance ministers from the U.S., U.K., France, Germany, Italy, Canada, and Japan – generally prefers the market to set exchange rates. However, Brainard said, sometimes "excess volatility or disorderly movements" require the finance ministers to step in and manipulate the rates.
How Brainard could make those comments with a straight face, we don't know... The huge sums of money being printed in Japan, the U.S., and Europe are hindering any chance for "market determined" exchange rates. The U.S. government has a debt burden so high that it can only hope to inflate its way out. Is the market really saying it would lend the government money for 30 years at 3.19% (through Treasurys)? No. It's reacting to massive fiscal stimulus.
However, these low rates force investors out of low-yielding bonds and into stocks (and other riskier assets). And as we're seeing in Japan and the U.S., it's making equity owners rich.
We're sending you a special e-mail tomorrow, so keep an eye on your inboxes...
Over the past two days, Steve Sjuggerud has been telling readers about a trading system he spent $900,000 developing that recognizes investments that are about to explode... And could potentially double or triple your money. Steve explains a bit about how his system works...
It works by analyzing huge quantities of data (up to 213 years' worth) week after week... in search of FORMULAS – which can't be tracked with the naked eye. What kind of formulas, exactly? This might surprise you – but it turns out, the market is planted with dozens of hidden formulas for making money...
Altogether, after eight years of testing $170,000 of data each year, I've discovered 48 formulas... in sectors ranging from gold and oil, to silver, penny stocks, utilities, natural gas, emerging markets, Hong Kong, India, health care, you name it...
The great thing is, these formulas offer you the opportunity to profit in the stock market without relying on individual companies... which dramatically reduces the risk potential.
This is a similar strategy to ones used by some of the most sophisticated and richest hedge-fund managers in the world... But we're making the system available to you. Steve's releasing the full details tomorrow.
New 52-week highs (as of 2/12/13): PowerShares Buyback Achievers Fund (PKW), ProShares Ultra S&P 500 Fund (SSO), Targa Resources (TRGP), Johnson & Johnson (JNJ), Ericsson (ERIC), 3M (MMM), Hershey (HSY), American Financial Group (AFG), Chubb (CB), Travelers (TRV), Kohlberg Kravis Roberts (KKR), Steel Dynamics (STLD), Becton-Dickinson (BDX), BLADEX (BLX), Walgreens (WAG), and Analog Devices (ADI).
The idea of us writing a book struck a chord... Well, don't expect anything in the near future, but the wheels are turning. What would you like to see us write a book about? Let us know at feedback@stansberryresearch.com.
"I'm reading – again and again for the benefit of my clients – Bill Bonner's Family Fortunes. A book on investing from you – with your deep conceptual understanding of Capitalism – could be a wonderful compliment to that book. Go for it!" – Paid-up subscriber Michael Harvey
Goldsmith comment: Something's in the works... Stay tuned.
"First of all, I'd like to say thank you for all the recommendations, learning materials, and market insights. Those things changed my investment from "loss" to "gain" in 2012. One question that I have is Porter said that the editors were not allowed to buy the stock recommendations but I thought Jeff and perhaps Steve use their own money to trade. Could you clarify your company policy again please? I know it's not going to change my strategy since in the end we need to make our own decision about our money but just curious... Thanks and keep up the good work." – Paid-up subscriber ML
Porter comment: How could I be more clear? Editors can't invest in their recommendations. It's a very simple rule... Seems easy to understand...
Regards,
Sean Goldsmith
New York, New York
February 13, 2013
Of course, there are ways to make money from the inflationary problems we're about to see in Argentina. People all around the world have gotten rich in Argentina over the years trading the cycles.
The things he's bought over the years down there are incredible. One time, he bought all the central bank's gold reserves below the melt price of gold. He's bought all the best soybean farms. And he's bought all the best commercial real estate... He currently owns more than half the commercial real estate in Buenos Aires.
Lots of folks have found ways to buy things in Argentina when people are terrified of the country and then sell them when people think Argentina will be fine. Like all other markets in the world, it's cyclical.
However, I would be happy to back Eduardo at any time. And you can do so, too, through his publicly traded holding company, Cresud (CRESY).
Keep in mind... I don't think we have seen the worst news from Argentina yet. I think things will continue to get much worse there. So I would probably wait until there was some kind of violence or some other extreme event before investing.
