Timber!

By Kletr @ Shutterstock.com

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.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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