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Post by slipclutch on Mar 12, 2024 21:51:35 GMT -6
I don’t want to be a dick but you want interest rates to be high enough so that land values go down. It will keep the land investors away. Believe it or not that’s where the majority of inflation of land is and Not your neighbour. I will say this again. Low interest hurt us more than it helped us. There’s to many non farmers in AG right now!
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Post by SWMan on Mar 13, 2024 0:29:22 GMT -6
I don’t want to be a dick but you want interest rates to be high enough so that land values go down. It will keep the land investors away. Believe it or not that’s where the majority of inflation of land is and Not your neighbour. I will say this again. Low interest hurt us more than it helped us. There’s to many non farmers in AG right now! This would also slow down debt-driven land purchases by farmers, because they would not be able to handle the interest costs. In recent times inflation has bailed out excessive capital spending and we now have a generation of young farmers who don't understand when enough is enough and no lender has told them no. Excess profits always seem to end up buried in land and equipment, currently we aren't nearly as profitable as we were expected to be just a few short months ago. It would be better to be less profitable but more consistent as Oatking noted. It's the good times that get a guy in trouble, not the bad times... |
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Deflation
Mar 13, 2024 8:09:36 GMT -6
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Post by Oatking on Mar 13, 2024 8:09:36 GMT -6
I agree to the statement that people are not familiar with the bank saying no to a loan proposal!
I only had it happen to me once . I was 20 and I asked a cibc for a car loan. I had a job but still got laughed out of his office!
Come a long ways since than ! However , I find it interesting that I had to request higher land payments from my bank to make up for the higher interest .
I was surprised the bank didn’t call me on that!
Although , the bank would be making more profits on me !
I wonder how folks are reacting to banks calling in loans now?
It makes a big difference per year. I had to raise my payments 30 grand a year to make sure I was paying the same principle !
If rates drop , I will feel like I won the lottery ! 🤦♂️
Least land can make money , but for a big old million dollar house a 15 thousand bump in a mortgage would hurt.
And Mark Chipman is begging us to buy Jet season tickets ! Money must be running thin .
I don’t agree about the statement about your farming neighbour .
In fact the competition for land has increased the levels much higher than any other factor.
If land comes up for rent , it’s a stampede to win the bid!!
To be honest I don’t know if any foreign investment land around my area
I do know farmers who get relatives to invest in their farms to grow the size . I have to admit , I can’t compete against that unity of ownership . It’s like a colony . But isn’t that different than if someone from India or China buys a bunch of land?
I would much rather see a local ownership group.
I wish I could have convinced my family to invest in land in the late nineties! But they all thought land was a big dud with no future!
Wow , glad we all didn’t listened to those types of thoughts !
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Post by slipclutch on Mar 13, 2024 11:40:29 GMT -6
I agree to the statement that people are not familiar with the bank saying no to a loan proposal! I only had it happen to me once . I was 20 and I asked a cibc for a car loan. I had a job but still got laughed out of his office! Come a long ways since than ! However , I find it interesting that I had to request higher land payments from my bank to make up for the higher interest . I was surprised the bank didn’t call me on that! Although , the bank would be making more profits on me ! I wonder how folks are reacting to banks calling in loans now? It makes a big difference per year. I had to raise my payments 30 grand a year to make sure I was paying the same principle ! If rates drop , I will feel like I won the lottery ! 🤦♂️ Least land can make money , but for a big old million dollar house a 15 thousand bump in a mortgage would hurt. And Mark Chipman is begging us to buy Jet season tickets ! Money must be running thin . I don’t agree about the statement about your farming neighbour . In fact the competition for land has increased the levels much higher than any other factor. If land comes up for rent , it’s a stampede to win the bid!! To be honest I don’t know if any foreign investment land around my area I do know farmers who get relatives to invest in their farms to grow the size . I have to admit , I can’t compete against that unity of ownership . It’s like a colony . But isn’t that different than if someone from India or China buys a bunch of land? I would much rather see a local ownership group. I wish I could have convinced my family to invest in land in the late nineties! But they all thought land was a big dud with no future! Wow , glad we all didn’t listened to those types of thoughts ! Oat king. You might be surprise who is talking to investors. I just got a call last fall from an investment company wanting to invest in Ag. They buy the land and you farm it. Meanwhile you’re the guy farming and know body knows any different. And This company is from Manitoba.! Ever wonder how a farm or your neighbour expanded so quickly? |
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Deflation
Mar 13, 2024 12:51:29 GMT -6
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Post by Oatking on Mar 13, 2024 12:51:29 GMT -6
I guess the back room deals are fast and furious ! I wonder what the return to the investor is with 6-7 thousand dollar per acre land . How do you give back a dividend ?
Maybe with family money from Europe they can sit on the investment over the long haul but are the random investor willing to wait?
I remember having the conversation with a friend about investing in physical silver bars.
He thought it was a waste of time and said to invest in the company mining the silver or in the paper product .
I like having the physical asset even though I don’t collect interest on it. It’s a long term deal.
But I total get if your trying to build a nest egg!
As a farmer I would be afraid to sell off physical assets like land .
Sure you might farm with no debt but your money in the bank will bleed out over time!
It’s nice to have equity value even if you don’t collect interest on it !
Seems like those type of assets are the safest!
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Deflation
Mar 13, 2024 13:02:55 GMT -6
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Post by meskie on Mar 13, 2024 13:02:55 GMT -6
Sask land values went up 15%. Went up a lot more around us the last year. It went up a little over 50% from last fall when I bought a 1/2 to last month when a 1/4 sold right beside it.
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Deflation
Mar 13, 2024 13:16:15 GMT -6
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Post by slipclutch on Mar 13, 2024 13:16:15 GMT -6
Oat king. I didn’t say it was smart for a non-farmer to invest AG. I keep telling my kids just because you can doesn’t means it’s smart.
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Post by kenmb on Mar 14, 2024 9:24:45 GMT -6
We may be moving to a new phase of land ownership that never crossed my mind before. I have always looked at non-farming ownership being a function of generating a return as an investment. Meaning once the returns didn't pencil out then we would see that collection of buyer disappear and actually turn to sellers as they take their capital and move into a area of the economy that is generating a return, or into bonds/gics with known returns. That is how investors would manage their holdings. Investors don't have a sentimental attachment to land when living elsewhere on the planet.
What could be happening is that there is that 1% of people who are investors but are seeing the dollar totally loosing its value/usefulness. This would be hyperinflation where the greater population sees the currency is reaching a point of no intrinsic value and so offload it by buying whatever they can. Before that occurs is the smarter people who see it coming sooner and position themselves accordingly.
I was never in the camp of the currency going to zero but perhaps I need to rethink that. In such a scenario then one is not talking return on investment or even "investing". It is simply offloading currency units for assets and not factoring in a return. Sure, such an investor is getting a return to an extent but if his goal is to offload currency then getting back more currency on rent or asset appreciation for a future sale isn't actually factoring in.
Perhaps there are more people who are interested in simply holding assets than I think there are. Perhaps there is more of those people than "investors" than I think there is. A guy would need to have a conversation with the new buyers. Sometimes it is just dumb luck - people buying land now thinking they are investing to get returns but may simply be on the right end of things if the currency keeps being debased.
The debt charts are saying our currency will continue to be debased. Whether that means farmland is an "investment" is debatable. Not debatable is that owning an asset is good planning.
I haven't paid to much attention to de-dollarization but that may be in play. We are in the west where propaganda is job #1 of our information services. Could be BRICS is moving along well and the $us is continuing to loose revelance. That alone would cause people elsewhere in the world to unload $us and that would be seen as inflation and asset appreciation as dollars are converted to tangible things.
Point being in all this is if we look at debt expansion going exponential - which it is - then we really need to think about what it really means. Facts are facts. People will say the $us will never go to zero. Understanding our current reality, projecting the future based on the present, and we need to accept what is most likely. Of course a good war or financial crisis to reshape everything is likely to occur first but that should not prevent a person from understanding what reality is.
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Deflation
Mar 14, 2024 14:15:27 GMT -6
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Post by Oatking on Mar 14, 2024 14:15:27 GMT -6
Interesting you mention the bric countries.
If a non farmer is investing in land and not taking any dividend , are they doing it for the hierarchy or prestige’s status?
But really they don’t have a name on a rm map so why would it be such a big deal?
It’s hard to tell looking on a rm map who owns what because of all the numbered entities. Let’s of family farms have numbered titles!
I wonder how easy it is for a land investor to cash out within a group now? Are there lots of members of the group chumming at the bit to expand?
Huh , sorta sounds like us farmers!!
I haven’t heard of any land investment fund companies unmourned area. You would think they would advertise land for rent to the highest bidder ?
I would never sell out to one of these anyway and rent the land back! How would you like a bunch of investor owners looking over your shoulder! That would bug me to lose control!!
But maybe it works for some guys !
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Deflation
Mar 14, 2024 16:43:15 GMT -6
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Post by slipclutch on Mar 14, 2024 16:43:15 GMT -6
The land investor is definitely not making a return on their investment by rent. They are hearing The 10/15/20% per year increase in value. That’s how come the investor interested in land. Its better than renting out apartment blocks.
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Post by kenmb on Mar 15, 2024 10:24:20 GMT -6
One year doesn't make a trend but if we accept that we had a few good years of unusually high grain prices and are now getting back to typical farming where you have to watch your dollars then land investment probably won't return great on either crop production or rental. So take away the two ways land gives return as a capital purchase then a guy has to explain why land keeps going up.
We can use the Beannie Baby analogy where we have a rush of people to own something just for the sake of ownership with no actual return. Or perhaps we see people loosing faith in the currency.
"value" of land isn't going up. If you can't gain higher return on your capital via rent or revenue then it isn't getting more valueable, infact value can be said to be going down. What is happening is the currency used is loosing purchasing power.
If it takes more currency to purchase any given item - steak, diesel, f150, rebar, etc we don't say we are getting a better product and so more intrinsic value now then before.
Point being is to watch and see if this trend continues and even accelerates. If it does, you aren't seeing land go higher in "value", you are seeing the currency being unloaded and converted into something else. Although most won't recognize this but some will, and perhaps, if this is what is happening, we may see more of it. Hyperinflation.
Time will tell. Historically no one really sees these things happening until it is well underway because there are so many ways it can stop beforehand.
But if we think about all these things at work around us I think it is easier to understand why central banks cutting rates is not likely to happen. The "news" says interest rate cuts are expected but reality says otherwise. Unless the intent is to fast track how quick the currency looses value.
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Post by SWMan on Mar 15, 2024 23:17:09 GMT -6
If people are losing faith in the currency(s) and hiding their wealth in hard assets, then it would seem reasonable that not all asset classes would be subject to the same attention. For instance land or gold or silver has often been used to weather an economic storm in the past and may be popular, but perhaps buying a bunch of electric cars/atv's/time shares or any other thing that has a limited shelf life won't be in style.
There are so many factors like political upheaval, business and consumer trends, government policy, etc. that can affect the perceived value of any given item. It's no wonder the people that shape policy are such good investors...
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Post by kenmb on Mar 17, 2024 10:49:35 GMT -6
I wonder when the privately owned and operated Federal Reserve will start living up to the propaganda on why it was implemented and start holding the US Government accountable to run away debt. That was the story: if government was in control they would over spend and destroy the currency. Apparently no one on the planet has figured that this idea should be revisted to see if the actions are consistent with intent.
Still don't mind J Powell, next 12 months will say a lot. Interest rate cuts would be throwing gas on currency destruction fire. Could happen. If so I might take on more debt in that situation. Just need to be mindful to be able to cover my butt should we have a "crisis" and banks start calling in loans.
Time will tell what happens. Land not cash flowing will drop prices. Currency destruction (lower interest rates) and loss of faith in currency will keep it going higher. And the wild card is whether de dollarization is occurring. The Bitcoin thing could be part of the mechanism to off load $us. Who knows. Buy bitcoin in $us and then convert to another currency. That was part of my thinking as to whether we are seeing people unloading dollars.
The age old question is whether paper futures trading in gold and silver will still control value. Although I suppose I haven't done too bad, have a lot of gold and silver that is up 70 to 100% over last 6 or 7 years. So not doing a terrible job of tracking the currency destruction. What hasn't held pace is the miners. With inflation driving up all mining costs and the raw product up in value the miners still manage be suckling. I suspect that will change soon. Sold my Sprott Silver fund two weeks ago just three days before the move up so I did my part to move prices up.
What are the odds a group running the interest rates and having full control happen to "let slip" where interest rates are really going 6 months or 5 years in advance? No one is that bad at their job to not see inflation for 10 years when their actions are the direct cause so it is a no brainer they know well in advance. I suppose this is where my thinking in JPow goes - perhaps the long term plan was to cut interest rates and really put the lower end of society in a hole that needs full government control with price controls, basic income supplement and all that. But JPow is saying no interest rate cuts. Basically the only "expert" on the planet saying interest rate cuts are a bad idea right now.
A guy can view things many ways, only history says what was correct. But interest rates haven't stayed low "as predicted" and aren't being cut as "predicted".
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Post by kenmb on Mar 24, 2024 11:05:33 GMT -6
Came across this video link, it's a good watch as is the entire movie. If you don't understand the movie it is because you don't understand the system. All the bad things taking place in our finacialized world are not flaws in the system or capitalism failing but rather features of the design to be exploited.
It is certainly a good way to get deflation.
As a side note, I see J Powell has once again said no rate cuts anytime soon. But the "markets" still say any day now.
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Post by kenmb on Mar 28, 2024 9:34:04 GMT -6
A random point that may be of note, as gold hits its all time high last few days I also see the $us is up a bit. It generally doesn't work this way because the $us is said to establish the value of gold (that is wrong way to think of things but that has been covered before). Generally the easy way for gold to gain a higher $us number associated with it is for the $us to be going down in purchasing power. But we are seeing something a little different in the last little bit.
Our controlled media doesn't talk about it so we don't get the true picture, however if we consider that other countries really are getting away from the $us and are conducting trade in their own currencies instead then we can see some different dynamics.
In the same way of thinking, I am hearing in recent months how Russia is moving a lot of grain because it is "cheaper". As in we can't compete on price. The tricky thing is do we take a simplistic view and say Russia is dumping grain or do we take a multipolar world view and consider currency value. Let's say our western world did not pursue such an obscene policy as negstive interest rates for 15 years. Suppose land did not triple, rent did not double, equipment and inputs did not double over 15 years, how would your cost of production be different today vs 15 years ago. If you are growing the same crops on the same land, using the same technology and methods, would your cost of production be down perhaps 40%? The only way to understand this comparison is to say you are comparing your cost to a country that did not destroy its currency. I am not saying Russia protected its currency because I don't get that kind of information fed to me via our "news", but suppose Russia didn't destroy its currency. If you follow what I am saying then you may understand what I am saying about the need for the $us to dominate all trade in the world, as soon as a few entities break free and trading among themselves then we see distortions.
Perhaps Russia is not dumping "cheap" grain. It just looks cheap to us because our currency has been intentionally destroyed. And this brings me full circle to considering what gold is doing as something of note. It's not about an investment or "making money", it's about considering if things are going on that our "news" doesn't comment on.
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