Today (11-4-09), the business section of the Wisconsin State Journal carried a story about how Warrrenn Buffett, the second richest person in America, wants to buy a railroad system, the second largest in the U.S. This is striking, because he has made much of his money in real estate, not railroads. As a result, I read the "fine print."
Toward the end of this article, Buffett stated his rationale. It is simple. He predicts the price of oil is going to rise sharply; this will make trucking of products exepnsive in comparison with railroad deliverires. The next paragraph pointed out that this railroad system is on of the backbones of food exports from the USA to China!
Note the convergence of two massive economic forces here. The first is oil. The second is China. Buffett wants to position hiimself to profit from trends in these two major sectors of the global economy. One result could be an increased reliance in the USA on local production of food, which would undercut corporate agriculture. Local food production, in turn, could enhance the growth of organic foods, which are healthier to eat than corporate "Frankenfood."
Buffett is betting his money, an estimated $34 billion US dollars, where he believes trends are taking us. His bet really caught my attention. We need to get ready for a really rough economic ride if in fact his trend forecast is accurate.
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