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Contributor

Re: The next 6 months are "BUBBLE TIME"

In 1970, the value of gold was set by the US government - it had been $35 per ounce since the Bretton Woods Agreement of 1944.  The US dollar then was pegged to gold, and US currency was convertable.  Nixon finally cut the peg in 1971 - since then, the US has had a fiat money system.  If someone had the data, comparing spot gold after 1972 to farmland values may be an interesting comparison - but it is not likely a 12:1.

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Senior Advisor

Re: The next 6 months are "BUBBLE TIME"

BA I know folks that did exactly that. They bought land for $3000 and it retreated back to $1000. They held on and now it is worth $6000.

 

I know of another farm that sold for $3200 and they paid the tenant $300 per acre to abandon his lease. Two years later they resold the farm for $2200 per acre and darn lucky they did that because they had previously owned land at risk. That was 320 acres.

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Veteran Contributor

Re: Gold in Jan 1980 was $675, price in Jan 2001

was $265.

 

Could be that the price of gold was somewhat influenced by usa govt cash balances.

 

Could be that large usa govt deficits ultimately mean there's more usa dollars out there ( somewhere ), thus takes more dollars to buy anything too.

 

The usa govt ran a surplus budget ( not deficit ) from say 1997 thru 2001 ( coincides directly to low gold prices then ).

 

The usa / govt etc was in the past a much larger proportional global numbers influence than it is today, thus reflected in every market....once upon a time.

  

Agree with Dave ie dap7, "cross" market supposed interpretations are still supposed.

 

Might be more to silver in the land coincidence vs gold, too.

 

Nother idea...Is it possible that shear numbers of business BK filings determine ultimate land values in the usa?

 

approx 100,000 business BK's filed 2008 thru 2009 ( about 50% more than any other 2 year run ).

 

2008 filings were high but not terrible high when comped back.

 

If 2010 filings total anywhere close to the 2009 total ( 60,837 business BK's ) then we're looking at an approx DOUBLE the norm on a 2 year run of those.

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