These are extreme times…
We’ve just survived a once-in-a-century pandemic…
We’ve seen inflation soar to multidecade highs…
Temperatures across the world are setting records…
Wherever you look, extremes abound.
So you get used to them… the constant stream of “highest, lowest, largest, most expensive” numbs you.
That’s how you lose your focus… and start ignoring the really important changes.
Like this one…
Manufacturing Facility Construction in the U.S. Is at 60-Year Highs
If you listen to the mainstream media, you get the impression that manufacturing in the United States has ground to a halt…
Car manufacturers are on strike, electronics have been outsourced to China, and the whole country is essentially one giant coffee shop.
It couldn’t be further from the truth.
In fact, between January and June this year, construction on new manufacturing plants in the country totaled $196 billion. On an inflation-adjusted basis, it’s at a 60-year high.
U.S. chipmakers, after the global supply-chain meltdowns caused by the pandemic, are leading the trend. But many others are also taking back ground. Plastics and chemicals companies have swarmed the U.S. mainland to be near lower-cost oil and natural gas. And now certain mining, electronics and auto component makers also seek a broader U.S. stance, as federal EV and solar subsidies boost demand for U.S.-sourced goods.
Some of this isn’t quite news. You must have heard by now that the Inflation Reduction Act and the CHIPS Act would bring some manufacturing back home.
But turns out it’s not only about semiconductors.
Even chemical manufacturers and mining companies have started to look at the U.S. as their home base.
This is probably the most supportive news for the 18.6-year real estate cycle.
Demand For Land Drives the 18.6-Year Cycle
With hundreds of billions of dollars in total government subsidies and tax breaks, companies of all sorts are rushing to stake land and start building their manufacturing facilities in the U.S.
This goes to the heart of my “big picture” argument: land is at the core of the economy.
The government created conditions for it to appreciate fast. The second-rate effects will be numerous… from job creation to higher economic output… to higher real estate prices in the areas where these facilities are being built… to higher wages for the workers being employed there… who will then spend more and drive economic growth further…
All of this, just as I predicted, will push the 18.6-year real estate cycle forward and finally to its frenzied peak.
This torrent of manufacturing construction is probably the biggest news this year.
But few paid any attention to it… they remain fixated on what the Fed is going to say next.
You, however, should understand what it means by now.
Growth, growth, growth at all costs.
Editor, Cycles Trading with Phil Anderson
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