In this week’s episode of The Bull & The Bear, Adam, Charles and I look at how to approach investing amid a “shortage economy” like we’re facing today.
Prices of everyday household items are soaring higher and higher.
Everything from gas to lumber to bread is getting more expensive.
It’s easy to blame politics for why prices are skyrocketing. But it’s much deeper than that.
We’re experiencing a “shortage economy.”
Hungarian economist János Kornai coined the phrase in 1980 to describe frequent and chronic shortages of goods and services.
In economics, when demand for a product outpaces supply, the price of that product goes up.
It’s what we are experiencing today.
In today’s episode of The Bull & The Bear, chief investment strategist Adam O’Dell, Green Zone Fortunes co-editor Charles Sizemore and I tell you about the “shortage economy” and what it means for investors.
Who Pays the Price in a “Shortage Economy?”
Let’s look at lumber. It’s the key component in new construction and home renovations.
Lumber Prices Skyrocket in 12 Months
A year ago, lumber was selling for about $363 FBM, or board-foot.
Today, that same piece of lumber will cost you $1,206 FBM — a 232% price increase.
It means the cost to build or renovate anything … houses, a backyard shed or even a treehouse for your kids … costs way more today than it did just a year ago.
And it’s not the only commodity jumping in price.
But what does all that mean for investors?
In this episode of The Bull & The Bear, we’ll dive deeper into that question and tell you how you should look at this “shortage economy” in terms of your investments.
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Safe trading,
Matt Clark
Research Analyst, Money & Markets
Matt Clark is the research analyst for Money & Markets. He’s the host of our podcast, The Bull & The Bear, as well as the Marijuana Market Update. Before joining the team, he spent 25 years as an investigative journalist and editor — covering everything from politics to business.
P.S. Chief investment strategist Adam O’Dell is bullish on biotech. He just revealed his next biotech stock recommendation in May’s monthly Green Zone Fortunes issue. I urge you to check out Adam’s presentation on what he calls “Imperium.” He's confident this DNA trend has the potential to be bigger than internet stocks in the ’90s. Click here to find out more. If you subscribe to Green Zone Fortunes today, you’ll find out how to get in on the ground floor with Adam's next biotech recommendation.