RE: Doomsayers
Interesting to see how many of those cats are Austrians. I have a book of von Mises essays around here. Too much activity on this board prevents me from reading it. Too bad.
They are all correct of course.
I think that Faber might have stepped in it, being such a bull on farm land. (Supposedly Faber is a party animal - might be affecting his judgment.) An article below on its price collapse. Still I think that he is correct in the long term. Still, when the hoards leave the cities in search of food or to avoid the flu/plauge, your crops can get stripped rather quickly. One has to assume that the rule of law will apply. Much better to buy canned goods and bullets. Also cultivate an emaciated look so that nobody will figure that you have a food stash. My I am waxing Malthusian today.
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Land Prices Drop Sharply in Center of U.S. Farm Belt
By SCOTT KILMAN
Land prices in the heart of the U.S. farm belt showed the steepest quarterly decline in 24 years, the Chicago Federal Reserve Bank said.
The value of good agricultural land in its district on April 1 was 6% lower than it was on Jan. 1, the Chicago Fed said Thursday. The quarterly decline is the sharpest since 1985, when the farm belt was mired in a wrenching debt crisis.
Any drop in land prices has a chilling effect on the agricultural sector because real estate is the largest source of collateral for farmers; their borrowing power is dropping along with the value of their land. The seventh district, which is at the center of America's most productive farmland, includes all or parts of Illinois, Indiana, Iowa, Michigan and Wisconsin.
The report didn't offer actual land prices, but percentage changes. Prices of farmland across the district began dropping late last year on a quarterly basis after climbing higher for a decade. On an annual basis, the price of farmland on April 1 was just 2% higher than the same 2008 date in the Chicago Fed survey. Farmland prices were climbing at double-digit rates across much of the Midwest on an annual basis until last fall, when the gathering recession took at lot of steam out of commodity prices.
Many farmers have less to spend on land because farm incomes are forecast to sink 20% this year from the record levels generated in 2007 and 2008. At the same time, the recession is damping investors' interest in developing farmland on the fringes of cities.
The Chicago Fed's first-quarter agricultural report is based on its survey of 227 bankers across the seventh district. While prices of crops such as corn and soybeans have fallen from the stratospheric levels they hit last summer, they appear to have settled at a plateau that is far higher than what food executives were accustomed during much of this decade and the 1990s. And while about two-thirds of the surveyed bankers said they expect farmland prices to change little during the second quarter, 30% expect to see farmland values drop further. |
