Asset value reset?

[Crestliner]

So things have not made sense for quite some time down on the farm. Is this the beginning of a reset on assets and costs?

Low demand, tighten the battle hatches? I saw a tractor for sale all winter for $150K now listed for $100k cash blowout....is this the beginning of deflation in farm country, land , equipment and input costs....God knows we have had deflated income already.

[blackpowder]

Never say never. And it feels like it yes.
But land a solid asset. Interest at zero. And the cost of new machinery can't go down. Unless it too made in China with no bells and whistles, or driverless someday. Overproduction could give us some price reset on used for now.
Which leaves inputs. And it suggests they can just make less of those too.
1929 event would be needed. No one wants that. Govts have to print more money. Eventually banks will just have to write national debts off.
20% cheaper assets maybe.

[Austrian Economics]

Never say never. And it feels like it yes.
But land a solid asset. Interest at zero. And the cost of new machinery can't go down. Unless it too made in China with no bells and whistles, or driverless someday. Overproduction could give us some price reset on used for now.
Which leaves inputs. And it suggests they can just make less of those too.
1929 event would be needed. No one wants that. Govts have to print more money. Eventually banks will just have to write national debts off.
20% cheaper assets maybe.

Writing off national debts means no more payment to creditors. Then you will have massive bank failures which will make 1929 look like a Sunday school picnic. Pension fund payouts will go to zero. No one should think that some sort of "debt jubilee" is a harmless event. You will have mass starvation, looting and chaos once the division of labor goes into reverse. Land will not be a solid asset if people lack the means to buy the food that is produced on it.

Printing more money is simply a formal admission by governments that they will no longer honor their debts.

[beaverdam]

Never say never. And it feels like it yes.
But land a solid asset. Interest at zero. And the cost of new machinery can't go down. Unless it too made in China with no bells and whistles, or driverless someday. Overproduction could give us some price reset on used for now.
Which leaves inputs. And it suggests they can just make less of those too.
1929 event would be needed. No one wants that. Govts have to print more money. Eventually banks will just have to write national debts off.
20% cheaper assets maybe.

Hope you bought that tractor, because in hindsight, that may have been a very quick, fleeting, window, to purchase.
Grains on the board are nice and green this morning, and I'm just wondering if thought's about food security are starting to hit home. There are a lot of steps and different supply chains in order to get a crop planted, then again to get harvested grains to processers, and on to retailers.
I don't think there will be deflation when our CAD keeps dropping.

[bucket]

Ask yourselves this....who is going to have the product to restock the food shelves?

The guy that owns bitcoin or the the guy with a few acres and a tractor?

[Taiga]

How is bitcoin doing now anyway, is it still ‘a thing’? I never did take that seriously.

[bucket]

How is bitcoin doing now anyway, is it still ‘a thing’? I never did take that seriously.

Don't know , don't care ...can't eat it is all I know...

[AlbertaFarmer5]

Writing off national debts means no more payment to creditors. Then you will have massive bank failures which will make 1929 look like a Sunday school picnic. Pension fund payouts will go to zero. No one should think that some sort of "debt jubilee" is a harmless event. You will have mass starvation, looting and chaos once the division of labor goes into reverse. Land will not be a solid asset if people lack the means to buy the food that is produced on it.

Printing more money is simply a formal admission by governments that they will no longer honor their debts.

All true, but do you see any other way for this to end? The ramifications of a wholesale debt jubilee will be earth shattering, it will destroy confidence in financial markets, it will send all the wrong signals, and reward all the wrong behaviours, but one way or another, and either intentionally or inevitably, it will happen sooner or later. By printing, or loss of confidence, or outright default/jubilee.

I have been trying to wrap my head around this issue for years, in the modern era, and uniquely throughout all of history, we have excess of every resource humans need to thrive, yet growth and prosperity are being almost intentionally hampered by shortages of arbitrarily defined capital, and by drowning everyone and every entity in debt.

Not a conspiracy theory whatsoever, just a thought that the monetary concept that functioned in times where the limits to growth were real tangible, limited by land base, commodities and energy supplies, are no longer adequate when we have the energy, technology, efficiencies and resources in abundance.

[bucket]

If agriculture doesnt see some benefit from this ....then farmers should be treated like every other industry and receive help as well...

[Austrian Economics]

All true, but do you see any other way for this to end? The ramifications of a wholesale debt jubilee will be earth shattering, it will destroy confidence in financial markets, it will send all the wrong signals, and reward all the wrong behaviours, but one way or another, and either intentionally or inevitably, it will happen sooner or later. By printing, or loss of confidence, or outright default/jubilee.

I have been trying to wrap my head around this issue for years, in the modern era, and uniquely throughout all of history, we have excess of every resource humans need to thrive, yet growth and prosperity are being almost intentionally hampered by shortages of arbitrarily defined capital, and by drowning everyone and every entity in debt.

Not a conspiracy theory whatsoever, just a thought that the monetary concept that functioned in times where the limits to growth were real tangible, limited by land base, commodities and energy supplies, are no longer adequate when we have the energy, technology, efficiencies and resources in abundance.

Our irredeemable fiat currency is at the root of our economic crisis. What we call money is merely a bond which accumulates interest exponentially and can never be paid off. We need to replace this IOU and start using gold as money again. Not central bank dollars denominated in gold, but a system where goods and services are priced simply in a weight of gold.

The way forward is this: tomorrow morning, put an end to government entitlement programs. Once the spending is halted, convert existing government debt into bonds with interest and principal payable in gold. Governments will have to sell assets and buy gold, but only debt denominated in gold can actually be paid off. Once that process starts, the economy will get a chance to breath again.

Ending capital gains on gold and allowing it to be enforced as payment for debt is also a requirement. Gold needs to circulate in the credit markets again. It's no good if it just gets hoarded.

[AlbertaFarmer5]

Our irredeemable fiat currency is at the root of our economic crisis. What we call money is merely a bond which accumulates interest exponentially and can never be paid off. We need to replace this IOU and start using gold as money again. Not central bank dollars denominated in gold, but a system where goods and services are priced simply in a weight of gold.

The way forward is this: tomorrow morning, put an end to government entitlement programs. Once the spending is halted, convert existing government debt into bonds with interest and principal payable in gold. Governments will have to sell assets and buy gold, but only debt denominated in gold can actually be paid off. Once that process starts, the economy will get a chance to breath again.

Ending capital gains on gold and allowing it to be enforced as payment for debt is also a requirement. Gold needs to circulate in the credit markets again. It's no good if it just gets hoarded.

So in that case, growth becomes limited by the reserves of, and arbitrary value of gold instead. Trading one problem for another.

[helmsdale]

All true, but do you see any other way for this to end?

I think im at a similar point... I simply cannot see where this all goes but utter flaming disaster!

Credit markets are done no matter which avenue I take.

If we stick to the official rules of the game and enforce repayment of all this credit, we destroy the banking system as we know it.

If we make debt meaningless we destroy the monetary system as we know it.

All industry groups, national treasuries, and consumers are highly levered and they've all hit the wall!

Who is sitting around with dry powder? A quote that's stuck with me off agriville, "everyones rich, but nobody's got any ****ing money!" Who drops cash into a loan of any significance anymore? So, banks cant bump up their reserves by calling someone's collateral, and re-signing a new loan with more collateral. I see no avenue for them to start calling loans to better their situation, so then what... they take loans from the government to ensure they dont go under from their own debt obligations? So who the hell buys the government bonds then when everyone is screaming for bailouts? This thing is going to go nuclear and I only see two ways out.

1) debt forgiveness/jubilee
to-do we go back to normal afterwards? Who takes it on the chin? No-one? Wheres the enforcement mechanism going forward if debt Carrie's no risk? I guess we just tell everyone: "we really mean it this time."
-isnt this wildly inflationary?

2) massive defaults the likes of which we've never seen before. Personal, corporate, sovereign, the works! This is what they're trying their damndest to avoid, but simply piling more debt on top of debt to prevent this simply leads to #1.

Is there some outcome other than the uncontrollable extremes I'm envisioning?

[farming101]

Our irredeemable fiat currency is at the root of our economic crisis. What we call money is merely a bond which accumulates interest exponentially and can never be paid off. We need to replace this IOU and start using gold as money again. Not central bank dollars denominated in gold, but a system where goods and services are priced simply in a weight of gold.

The way forward is this: tomorrow morning, put an end to government entitlement programs. Once the spending is halted, convert existing government debt into bonds with interest and principal payable in gold. Governments will have to sell assets and buy gold, but only debt denominated in gold can actually be paid off. Once that process starts, the economy will get a chance to breath again.

Ending capital gains on gold and allowing it to be enforced as payment for debt is also a requirement. Gold needs to circulate in the credit markets again. It's no good if it just gets hoarded.

Existing Canadian Gov't debt is 1.54 trillion. World gov't debt is 69 trillion.
Gov't has to sell assets? What assets? Who will buy the assets and with what? What will the gold that the Gov't has to buy be priced at keeping in mind that some estimates are that there is about 165,000 tonnes of gold in the world and that there has only been about 190,000 tonnes ever mined. What percentage of the world's gold could the gov'ts buy? How much an ounce would they have to bid to get it? Notice I said bid. Or will the gov't force individuals to sell it the gold it needs and put a self determined value on it?

[Daylate]

Hmmmm. China is looking fairly unscaved. Will they buy more debt? How much more control will they have after this.

[errolanderson]

Even at a 20 percent plus recent haircut, stock valuations still remain too high . . . This is a train-wreck from central bankers spoon-feeding investors artificially over the past decade.