What am I missing NC Illinois $14,000+ / a

[BA Deere]

Well, there is a "camp" that believes that the only way out of the $17 Trillion national debt and the $100 Trillion future mandated government spending is to have federal reserve printing to infinity.  They well may be right about the ensuing inflation that at some point will result.  The trouble is "getting from here to there" with a period of  "$2.75 corn". 

Also as the federal government runs out of rabbits to pull out of hats, entitlements and obligations will be pushed to the state and local governments, in other words property taxes will fund those obligations in the end.  It will be hard to be the only guy with a lifesaver in the midst of 100 drowning people...but that`s all another post for another day .

[farawayguy]

I'm told there's a buyer wanting to buy a 45 acre plot of my family land at $14,000/per. He's buying land attached to ours at that price right now. If it were my decision to make alone, I'd sell it and bank the money. Pretty sure we'll see a softening of the market soon enough. Don't know if the buyer is doing a 1031, but I'll probably find out soon. We won't be selling though. 

[hardnox604008]

As I've said, the people who topped the market in 1980 were pretty much 100% certain that hyperinflation was coming.

Could be right this time but  I'll pass.

[BA Deere]

  Now I`m not necessarily saying that farmland is a good bet, but I think high inflation is.

Okay in 1980 the national debt was at $1 trillion and we survived Paul Volker`s 20% prime lending rate.  Today we spend $3.5 trillion and take in $2.5 trillion and run annual deficits of $1 trillion.  Today the fed puts in $1 trillion each year into the economy, mostly ends up into Wallstreet, doesn`t get into Joe 6-pack`s pocket or we would see inflation.

Imagine if we had 20% interest rates today, on $17 trillion national debt that`s $3.4 trillion, all our taxes would go to pay interest and we would run a $1 trillion deficit and NOT spend a penny running the government...talk about a "government shutdown"!  At what point are those buying our debt going to balk at the high risk and low returns in buying US debt?

I really think we are on the same path as Zimbabwe, they printed their currency until everybody was  a Billionaire, there was billionaires starving in the streets.  However, to buy Zimbabwe farmland was not a "good bet"   http://www.dailymail.co.uk/news/article-133103/Zimbabwe-farmers-warned-face-jail.html 

[minnisota]

Lets see $100 an acre would take 140 yrs to BE ,$200 70yrs ,#$300 an acre 46.6 yrs\   $400  35 yrs\   $500 an acre 28 yrs. Not sure of my math bht I think it's close. Tell me again why yo wold not jmp. A2% cd wold make $280 a yr I don't get it 

[farawayguy]

Well, when you only look at the deleterious side of things it's easy to come to that conclusion. But there are many effects that would run counter to your argument. For example, using your scenario, with "billionaires homeless in the street" due to hyper-inflation, the $17 trillion national debt would be handled easily by confiscating the money of 17,000 starving, homeless billionaires (we'd give them a hambuger for each billion). National debt solved. 

[farawayguy]

I agree with you. The rest of my family doesn't analyze like us normal folks!

[idalivered]

with the pathway for cities to take banjruptcy opening, the trail to state and federal bankruptcy may follow. Maybe the way out is a devaluing of curency (and consequently assets). So the land I paid too much for becomes worth $80/acre, maybe?I can pay for it with 95 cent corn? talk about chaos! I won't get into the similarites between our situation and zimbabwe. ; )

[Kay/NC]

The whole idea of municipalities not meeting their obligations has to make some investments strategies (lower rate of returns, but taxfree and generally a " sure thing") look obsolete now. Urban wastelands like Detroit point out the failures of so many programs for inner city renewal. No telling how much money has been thrown at that lost cause.

The interesting point made about monetary return on high-priced land v even crappy bank interest right now does sort of make one wonder what the next down cycle in commodity prices will bring.

[BA Deere]

I think the possiblity of "land taxes" being called upon to fund this socialistic Utopia one day is something you have to consider before putting too much in the land investment basket.

If counties, especially urban/rural counties are hurting, a farmer that owns 1,000 acres and is paying "$35/acre" land tax.  It would only be a matter of time before that revenue well is discovered..."$100, $200, $300 acre land tax would be fair ...he`s a rich farmer afterall!".