What's in Your Portfolio

[Undertoad]

That may be the ideal profession to have such a stance on money.

Nobody can take advantage of your generosity until it's too late.

[Nirvana]

Farm land its better than owning others companies ..if there are live people they will always need to eat...

[tw]

Originally Posted by Nirvana

Farm land its better than owning others companies ..if there are live people they will always need to eat...

From The Economist of 25 Aug 2012:

Farmland Prices
This year's drought in America will reduce farm incomes, but the price of farmland in the Midwest has risen by almost 20% since the end of last year. Strong farm incomes in recent years (and low interest rates) have enabled farmers to pay up for land; high commodity prices have also attracted investors. The price of land in America's corn belt is ten times greater than in Canada's main farming provinces, now among the cheapest places in the world to grow grain.

Earlier on 20 Apr 2011:

Though down a bit from the highs of 2008, inflation-adjusted farmland values remain well above the last great peak of three decades ago (see chart), buoyed by strong commodity prices, low interest rates and a weak dollar. In parts of the Midwest they rose by more than 20% last year. Feeling flush, farmers have rushed to buy and cultivate more land. Inventories look likely to remain depleted, putting upward pressure on crop and land prices. Investors now account for a quarter of all land purchases in some states. ...
A rise in capitalisation rates back to their historic average would imply farmland-price falls of up to a third, estimate officials at the Federal Reserve Bank of Kansas City. ...
[FDIC] examiners are no longer relying so much on aggregate industry data, says one, but are "asking more questions of individual high-flying lenders about how they plan to mitigate the risks of a bubble bursting." They are urging banks to lend based on cashflow projections, not collateral values.

A reason for the massive recession: banks and other financial institutions failed to do their jobs; to verify an applicant could afford the loan. This 'deregulation' (approved by 'political propaganda') created one massive recession. We don't need another created by irresponsible finance people.

Review what happened in 1929 to understand why farmland prices, like house prices, do not necessarily mean a good investment.

Despite what bean counter types say, a good investment must be based in the product. Not myths so often promoted on spread sheets created by finance people. Due to finance spin, land prices may be 30% too high; a crash can be expected.

[Nirvana]

don't worry about me TW I am good

[xoxoxoBruce]

Sure, that's because you live on it and off it.

The scumbags that were playing the wall street game, until it fell apart, were looking for a new game. Some of that money has moved into farm land speculation hoping to create another bubble for quick profit. As they drive the value up, the taxes also go up, making harder for small farmers/ranchers.

Some of them have moved into the commodities futures market, bidding up the prices, which increases the cost of food for us and our animals. They're outbidding the traditional players, like General Mills and Purina who were mostly the end users interested in keeping prices down.

Fortunately they can't move the land off shore... except what washes downstream into the ocean.

[Nirvana]

The reason food prices are so high is because of ethanol subsidies period. Once the powers to be get their head out of their alimentary canal and find another crop besides corn (saw grass etc.) for ethanol production. Food prices would moderate.

[tw]

Originally Posted by Nirvana

The reason food prices are so high is because of ethanol subsidies period.

A serious and yet unnoticed problem. Eliminate a product that has almost no purpose. And farmland prices take a tumble. We have created a large industry that increases GDP while doing almost nothing productive. The resulting cash flow typically enrich Wall Street types - resulting in a future economic downturn suffered by others.

Generally, products remains at similar prices when inflation is considered. For example, an upscale car in 1969 might be $4500. With inflation that is $30,000 today. A loaf of bread in 1950 was $0.14. Today it should cost $1.35. So why is bread 85% higher?

[IamSam]

Originally Posted by Nirvana

The reason food prices are so high is because of ethanol subsidies period. Once the powers to be get their head out of their alimentary canal and find another crop besides corn (saw grass etc.) for ethanol production. Food prices would moderate.

The reason food prices are so high in Colorado (and other regions in the middle of the country) is because of the unrelenting drought we've being enduring for years now. The cost of hay is around $300/ton in some areas, and farmers just can't pay that kind of price to raise their cattle, so you see the cost of beef going higher than the cost of gold.

Out here, even the lowly pinto bean is in trouble. McPhee Reservoir (which supplies much of our irrigation water) is at a mere 19% of normal. As it now stands, the water will be gone about half way through the summer. Farmers will be able to grow only one crop of hay instead of the usual two. I don't know what will happen to the pintos. States that are downstream from Colorado like New Mexico with its dependence on the Rio Grande (which has its headwaters here) are threatening legal action if Colorado keeps too much water for itself.

Things are just not good for farmers and ranchers for more reason than one.

[Griff]

Originally Posted by Undertoad

That may be the ideal profession to have such a stance on money.

Nobody can take advantage of your generosity until it's too late.

And the markups are so enormous you can afford to throw in a free ride now and again. There is no con as beautiful as the funeral con, put my carcass under a tree or cut it up for science.