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| I could have predicted the recent events in the Ag economy somewhat. I'm not smart enough to really have done any more than I have done already and that's hold physical grain long enough to watch the prices increase.
During this current (or coming, depends on whether you think the recession is here now or just starting I suppose) recession, we've seen Funds move money from other places to ag commodities. That's raised prices to historic highs for most if not all commodities. And we've seen interest rates drop in an effort to defibrillate the economy again.
But what's next? When the US economy went through past recessions, how did that affect growers? How long did interest rates remain low before inflation caused them to increase?
How as wise business managers do we prepare for the next phase?
My gut feeling is to duck low. Pocket cash from high prices and pay down as much of my mortgage as possible. Keep away from the dealerships to avoid new combine smell.
But where do you put excess cash so it's still spendable once the bubble pops? I'm not suggesting that we'll be hauling money around in wheelbarrows like Germans did in the 30's, but the buying power of a dollar will be quite different today and in 4-5 years. | |
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Assume the US economy tanks, how does it affect farmers?
