The Best Inflation Hedge In The World

I have talked in countless circles how I believe the global economy will head into a whirlwind of hyperinflation like we have never seen. Weimar 2.0. Project Zimbabwe. Or whatever you want to call it. The global economy has been funded by cheap debt. Trillions of dollars have been printed into thin air. And now banks are beginning to fail and the money printer has essentially been turned back on.

In the end, all fiat currencies share the same fate as greedy bureaucrats become addicted to cheap and fast money like a heroin addict is to the next high. Monetary policy becomes an addicting game of chasing the white dragon who is always two steps ahead of the bureaucrats. The allure of cheap debt and endless printing of currencies is the downfall of any nation.

When a currency fails all hell breaks loose. Dollars you once had stored in a bank become worthless. Riots and outrage breakout in the streets. Individuals go back to hard currencies to transact in goods and services. Bureaucrats try to mend the situation by doing what they have always done to meet bills — print even more money. The problem is multiplied.

Debt is wiped out as trillions of dollars are dropped into the economy. Commodity prices go haywire. Investors buy up assets to protect whatever purchasing power they have left. Anything that cannot be printed becomes valuable. Gold. Cigarettes. Bullets. Land.

I believe one of the best inflation hedges is land. Land in desirable places that cannot be replicated or printed. I have searched the public markets far and wide to find the best land plays that should hold their value in an extreme inflationary environment. This is a favorite one of mine.

• Land assets in one of the most desirable locations in the entire world that are irreplaceable and unprintable. Land assets are worth a multiple of the current enterprise value.

• A cleaned up balance sheet from decades of hard work. The balance sheet is ready to rock and roll into the future.

• A real estate portfolio of high quality luxury income producing assets that remain unlevered, generate a substantial amount of NOI and cover all fixed corporate expenses into perpetuity.

• Recent leadership change at the C-suite level that indicates the board is ready to develop these irreplaceable assets into higher and better use cash flowing assets or an outright sale to the highest bidder.

• Downside minimal as the land will continue to outpace inflationary trends. Worst case scenario the board continues to land bank the assets and the stock remains a value trap.

The leadership change at the C-suite level is key and an indicator that the board is ready to monetize or develop key assets. There is an asset sale on the books that could close over the next thirty days and should the sale close the enterprise value will drop even further. The stock looks pretty attractive, asset heavy and has real catalysts over the short-term.

Let’s dig in…