Inflation is here not Deflation.

[foragefarmer]

Who says you have to sell it all? Maybe we will have a poor year one of these years and the bins will empty out. The taxes will balance themselves!

Hoping for a poor crop to sell the old crop. I'd wish you Good Luck with this years crop but maybe that would be the wrong thing for me to say to you.


"Taxes will balance themselves" I guess just like the "Budget will balance it's self"

Hope you have a bin buster!

[errolanderson]

This amazing price run-up is making many assumptions . . . .

1. Debt doesn’t matter.

2. The economy is starting a new sustainable growth period.

3.Stocks only go up. This fattens bank profits nicely.

4. Earnings and economic fundamentals ‘don’t matter’. Be damned economic reality.

5. The Fed always has the investor back and won’t allow stocks to drop. Big brother is there to protect.

6. There are no negative consequences to easy money. What can possibly go wrong??

If you believe all of the above, then you are parked right in-tune with the masses, the banks, the hedge funds . . . . the investing herd.

And you know, when it comes to markets, it is said; there is safety in numbers. How could the masses possibly be wrong??

What do you think? Where will markets be by fall. Will the Candyman still be riding tall?

[flea beetle]

Nobody is hoping for a poor crop. But what is the difference between having money sitting in a bank account, or money sitting in bins? At the rate the economy is going, I feel it is better sitting in the bin. Think of buying more bins like paying the monthly fee on a bank account/trading account. The appreciation of the grain in those bins by holding the grain to this rally has more than paid any extra tax, as well as for the bin. Can holding money in your bank account do that?

Glad you also caught my little jab at Trudeau. You are a spry one!

[farming101]

Ask farmers in Argentina how important grain in the bin is.
Argentine pesos are hot potatoes

Of course, putting money to work at something worthwhile and even profitable is never a bad thing....

[jazz]

But what is the difference between having money sitting in a bank account, or money sitting in bins?

If corp tax rates go to 28% like Biden is pitching, then storing grain in the face of that with a devaluing currency makes it a different decision.

Taking that tax hit and then struggling to finding a productive home for the cash may make less sense than just holding the grain and borrowing against it.

I should add that if we do see a hard event of some sort, stored grain is going to be a lot more valuable than any other asset I can think of including Bitcoin, gold, equities etc. And if the carbon tax gets too high, we can always burn the grain for heat.

[flea beetle]

Interesting perspective jazz. Never thought of doing that, but taking that one step further, had a guy done just that and borrowed against the grain and put it in the stock market a few years ago, I might be looking for a private island now!

[jazz]

Interesting perspective jazz. Never thought of doing that, but taking that one step further, had a guy done just that and borrowed against the grain and put it in the stock market a few years ago, I might be looking for a private island now!

When I had my account at BMO they had an instrument to borrow against stored inventory. I never used it or inquired about it. I mean RBC lets you borrow against gold as long as they hold it for you.

I have neighbors that store canary and flax for yrs. Met a guy last fall had 5 yrs of durum stored. Other neighbor stored all that fusarium durum for a few yrs and then trickled it into the market.

But flea, forage is perhaps right. Even if you are holding future inventory, it probably makes more sense to hold that in a corp than personally. You have sort of locked yourself into an eventual big tax hit personally unless you will the grain to your kids or something.

[biglentil]

What good are dollars if there is nothing left to buy? Availability of tangibles is terrible and getting worse. Dollars only come into existence with debt, if debts aren't paid what value do dollars have? Dollars are not wealth only a claim on wealth and that claim is fickle. We are in a fickle pickle.

[jazz]

This is an interesting take, discusses japan like errol pointed out. The M2 velocity chart would support that deflation is the eventual likely outcome.

https://www.treasuryandrisk.com/2020/04/28/who-will-thrive-in-the-coming-deflation/?slreturn=20210317131610

.

[biglentil]

Japan has a very unique culture, one based on minimalism, savings and a demographic heavily squewed to the elderly. But like all heavily indebted nations their time is coming.

When credit risks develop due to extremely high debt to gdp or a collapse in productivity interest rates rise, countries and the populace default. Think Venezuela.

Very few seem to understand inflation and hyperinflation it seems. They think it is only a result of things going well in an economy with plenty of velocity. If that's the case why are we seeing price inflation now when productivity is tanking and everyone is stuck at home not going out and spending? The nastiest price inflation is seen when things are not going well and central banks attempt to inflate the debt away.

[farming101]

6.25 wheat in 1980 equals 20.52 in today's money according to the BofC inflation calculator