Monday, September 24, 2007

U.S. Farm Real Estate History (Musical Tribute)



Shaded areas represent disco ball decades (hard asset eras).

Although oil is $80 a barrel and I fear we might actually run out someday, I'm turning even more deflationary in the short-term. The 1970s ended with a nasty recession.
  • Is this disco ball era getting a bit long in the tooth?
  • Does housing still have any possible room to run to the upside?
  • Are there too many people on the inflation side of the fence?
So many questions! In any event, I'm not very bullish on hard assets right now (other than canned goods, lol). Credit isn't money and maybe we have too much of the former and not enough of the latter.

It might be time to just think about:



This is not investment advice! Do I look like I have all the answers for this mess we're in? That's assuming we are even in a mess of course. The stock market doesn't seem to think so anyway.

Source Data:
NASS: Trends in U.S. Agriculture
NASS: U.S. Average Farm Real Estate Value
Consumer Price Index

4 comments:

checker said...

Great chart - I was thinking of investing in farmland as a hedge against everything else going to pot, but maybe I need to rethink . . . I'm amazed at the recent runup in prices.

Stagflationary Mark said...

checker,

I don't think answers are ever going to be easy to come by in this new "Age of Turbulence."

The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. - Alan Greenspan, 1967

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change. - Charles Darwin

Markets are constantly in a state of uncertainty and flux and money is make by discounting the obvious and betting on the unexpected. - George Soros

Rob Dawg said...

If it is any consolation farmland prices for plots of dirt that will be used to continue growing stuff didn't go up anywhere near this much. The properties that sell and thus set the price are those that are slated for development as as such reflect more developable raw urban land prices rather than farmland prices.

Stagflationary Mark said...

Rob Dawg,

Great point. I was reading just last night about how one reason that orange juice is more expensive is because of the Florida condo craze. Ripping down perfectly good orange trees to put in condos we don't really need puts this all in perspective for me.

http://www.sptimes.com/2007/09/21/Business/Development__hurrican.shtml
Florida, the world's second-largest orange grower, lost 3.8 percent of its citrus acreage in the past year to storm damage, disease and urban development, a government study showed.

Talk about misallocation of capital. :(

I've been trying to find the actual government study in hopes of seeing just exactly how much was development and how much was hurricanes (because the hurricanes were rather nasty). All I have found so far is a power point presentation that's barely worth mentioning.