Your Survival Guy’s on the pulp, I mean pulse. You know about the bubble that’s popped in lumber prices. That’s old news. It’s the same old story that goes like this: Government creates an incentive to grow trees on depleted farms in the south and boom, trees everywhere. The financial crisis hits, demand plummets, sawmills are shuttered. Then Covid, boom again, but not enough finished lumber. Prices go up, big owners of finished wood sell into the market, bubble deflates. Rinse and repeat.
Look, Your Survival Guy isn’t in the prediction business—it’s enough trying to figure out what’s already happened. But, hey, the American Dream is owning a home, and that dream is not gonna die, which is why another Wall Street firm plunked down $6 billion to buy thousands of single-family rental homes with an option to buy. The big winners in this scheme won’t be the married couples with two and a half kids and a dog.
Wall Street is giddy over carbon credits, where they get paid to clean their private jet wash. In other words, pay tree owners not to cut them down. Not a bad gig if you ask me. Paid not to work, what’s not to like? Sounds like a Biden plan.
California is on the leading edge of carbon credits—shocker—and I see this becoming a states’ rights issue. Another reason for you to become familiar with Your Survival Guy’s Super States study.
Do carbon credits even help the environment? According to one expert, the trees that are being sold as credits would have never been cut down, to begin with, while another feels the older growth will help states like California manage timber. Sounds like a red state owner’s manual where they actually manage timber—old growth doesn’t ignite like the tinder and brush littering California.
Heck, if I’m an owner in a red state and can get paid to sell to the government, reduce supply and increase prices down the road, I’m all in, but be warned, we’re in the early stages of this game, and Lucy’s holding the football.
Action Line: The ones who tend to pay the price for these boondoggles are the ones putting out the fires, literally. Firemen in California pensions are at the mercy of the investment managers who flock to these carbon credit markets like the swallows of Capistrano. Do they make money? Who cares when they can hide behind the opaque performance and keep living the dream.
E.J. Smith - Your Survival Guy
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