Norfolk Southern is the latest poster child for the pitfalls of financial engineering. Years of reckless cost cutting and debt-fueled buybacks, at the expense of infrastructure upgrades, have caused an ecological disaster.
Right now, U.S. gas prices are among the lowest in the world. But as America increasingly expands its LNG export infrastructure, U.S. natural gas prices will increasingly converge with much-higher international prices. And the companies that own low-cost gas reserves today will reap a windfall.
In many ways, the 2020s inflation scenario matches that of the 1970s.
The REIT we’ll introduce today offers an extra degree of safety. It avoids physical real estate properties entirely, and instead invests primarily in mortgage securities that are effectively backed by the government. And they’re a better buy than government bonds.