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Veteran Advisor

Re: Shellady - "Rough Roads" cash corn below $4 or likely 4.50,

likely does not work for most to grow more of it. granted land costs could drop significanlty down the road......and SA may not raise what folks think either during the el nino. land may drop to bond type yields...say 1 to 1.5% vs the old 2 to 3%. guess we'll see......looks like a toughee currently. i just don't see folks being real aggressive to even grow grains in 2016 since there's been quite a long term loss..and to go up say 25 to 35% from current price levels is basically a future breakeven. granted, Uncle will end up chipping some dough in....that might ( it might not 2 ) take some grains to BE for the 2015 crop year.
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BA Deere
Honored Advisor

Re: Shellady - "Rough Roads"

Well Scott, whether we like it or not we are Keynesians and like Apollo 13 we have to figure out what tools are at our disposal.  I say go big or go home,the fed already has over a $4 Trillion balance sheet, they should print up another $1 trillion and everybody that pays federal income tax would flat out get their tax bill cut in half, the average taxpayer would get about $10,000 in savings.  That would get money to mainstreet.  It would be enough that a new car could be afforded for some, everyone would at least go to a restaurant for a ribeye.  Some would start a business, some small businesses might hire a part-time employee and some would just pay down their student loans.  


Instead of the QE`s where they bailout banks and the printed money just goes to the stock market, if they got the money to mainstreet, it would spur inflation and then they could raise the interest rates that they so badly want to raise.


But with commodities, I think we`re going to have to do a 180º change in our thinking and focus more on cutting inputs instead of swinging for the bleachers on production.   If the new paradigm is "$3 corn and $8 beans" because our customers around the world are in recession and cutting imports.  We`re just going to have to adjust and in that adjustment there isn`t a place for $300 seedcorn, $300 28% and $400 rents.

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Senior Advisor

Re: Shellady - "Rough Roads"

And your comments are quite appreciated!!!  Keep us posted, sometimes I need to be reminded more than once, somebody gave me these pinkish-hued glasses, and I've just been too tight to get new ones, though I've seen those toilet-water bluish ones someplace.

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Veteran Contributor

Re: Shellady - "Rough Roads"

I have to disagree a bit with the no inflation crowd

How much has machinery gone up in say 10 yrs.

What about your pick up truck cost vs. 10 yr. ago

Even gas with todays crude price is no bargain vs. 10 yr ago Food, utilities, land taxes education

I have to think somebody can remember buying something 10 yr. ago and what it cost vs. today

If you remember what it cost??tell me there has been no inflation

And: also tell me why there will be no inflation in the next 10 yr. because I can't think of any thing that is cheaper than 10 yrs ago, except cell phones [electronics]

By the way, at the risk of getting too much in one post

 if you knew the real numbers of the Fed balance sheet what with swaps with Belgium and other countries and a lot of other stuff us ordinary folks know nothing about, I have an idea you would think the whole world is goig to crash. As in maybe 555 trillion of  world digital debt nuumbers just floating around in a cloud some where, that will come home to roost

At least I think of it as being in a cloud some where

What if everybody wants their cash

When Germany wanted their gold back, did the get it?? UH NO the did not get their gold back

Can you think maybbe bonds might be the next gold that does not get paid back

The Fed can only print so much money before a loss of confidence happens

Can you say QE4.Zero interst rates haven't got to main street because nobody wants to borrow thr money

Can you think of any other time in history that had zero int rates and people say they don't want it as debt

Some will take it, but most are saying no more debt. Isn't that a head scrambler

So: Lot more than one red flag out there

The only thing is what kind of time table for things to crash

Unless you math is different than mine

Do you read the economy is great, but anything over zero % interest will be a terrible shock to the system

But: you read it and think because you read it, it must be true

Why aren't people lining up for all that cheap int rate money??? When has it ever been this low before

Approx 30% of people on wall st have no idea of anything except zero int rates

--we have inflation

-- the math spells it out very clearly, the present system has to fail and probably sooner than later

We just don't know what kind of time table

Even the dot. com bubble took approx 3 yrs to finally give it up

This ain't going to be any dot com. bubble

The world isn't going to buy our debt forever

China has been cashing bonds at a pace, never seen before and seems like they will continue for some time

What happens if lots of countries sell their bonds and you still can't say QE4

Will it be like Germany asking for their gold and told they can't have it [ same as in, Some day soon, people won't be able or can't cash their bonds] Could very easily happen. Then what is next???  More inflation, probably gold would be the leader

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Re: Shellady - "Rough Roads"

Absolutely wglassfo!  I don't know what alternative universe these folks live in that say there is no inflation. Don't they even go out to the local diner? Lunch special & iced tea = $12.50



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BA Deere
Honored Advisor

Re: Shellady - "Rough Roads"

I think what the fed is talking about concerning inflation is "wage inflation", that`s the only fun part of inflation and that`s the inflation that we don`t have, we only have the bad part.  What we have is probably "stagflation".   Most of the smart alecks define inflation as "too much money chasing too few goods".  Well through free trade our economy is more of a low wage service economy, the factory workers are now working cheap overseas.


Here`s the Chapwood Index that tells the real story of consumer prices.


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Honored Advisor

Re: Shellady - "Rough Roads"

The leaders who say "no inflation" are naked as well as the press that reports it and never leaves the building.... But the public is so "self absorbed" they don't see it.

FC stone printed this morning question...."To the nearest 5% how many of the public recieve welfare assistance..????"

Anybody read their answer??


I greatly doubt that it was high enough....



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