Healthy Banking System or legalized theivery?

[carebear300]

I wish that agriculture could operate like our banking system. They are able to take a dollar in on deposit and pay less than one half of one percent interest per month and lend it out for a minimum of 5 percent per month, now that would be bad enough but by law for every dollar they have on deposit they can lend out about twenty more dollars. So the banks should be able to make record profits, but that isn't all then they charge a documentation fee for your operating loan and a utilization every month to service this loan. You talk about rip offs!!!!!! and it is all legal. I hope somebody can prove me wrong.

[ianben]

I wish we could poerate a bit like them too.
Instead of moaning colectivly about the supposed injustices we suffer from everyone we deal with. We should try to emulate them.
There is competition between banks but only after they have made a profit. Deals can be done but there will always be a bottom line.
Where is farmers bottom line?
See farmers united below.

[ValueChainFX]

Banks have always been the most visual of all crooks. But then I guess we let them do it and we use the (cough cough service) so each time we do it is a vote for them to stay alive! Maybe our New Gen Co-ops can do the one dollar in and twenty dollar out trick???? At least in a co-op that extra 19 dollars goes back to the user! LOL

[carebear300]

I wonder if a credit union would qualify as a new generation co-op. I can only speak for my own experience with our own little credit union is that as it modernizes and expands those non existent banking charges have been increasing and the only difference between it and the banks is up until now the charges are a little less. They basically operate like a bank taking piles of security and not taking any chances lending to farmers(maybe they got stung one too many times)

[ValueChainFX]

You may be right about getting the burn .. as if the producer is the only one that should be burned ! YIKES!!!! But I believe that the banking structure has to be looked at to fill that financial area in any business structure, who better to fill it then someone that has to live by the bankers standards and codes! Making them a partner in a New Gen Coop would ensure that we would get help on finding every way we could at building a bottom line, and after all isn't the goal here to stay true to our basic farm code "Feed The World" but in the subheading of that I guess we should write "FEED THE WORLD but don't go broke"

[cowman]

The banking system is a scandal. My best advice to anyone is to have as little to do with them as possible. Because you will always lose.
The credit unions are no different than the banks. They may have started out with high ideals but they soon sank down to the level of their evil brothers, the banks. How can any institution compete with the banks? They own the government. They make up the monetary policy. They decide where the economy will go.
The U.S. federal bank sets monetary policy for the whole world...do you know who the U.S. fed is? It is not the U.S. government! It is made up of a group of international bankers! That is a fact!

[pandiana]

Figures just released stated that Canadians owed $1.00 for every $1.00 brought home. I think the banks are firmly entrenched.

How can we talk about farmers wanting to be independent when they have willing signed over our independence and freedom to the banks. What happens if the interest rates start to climb? I always wondered if banks can dictate how you run your farm.

[carebear300]

We will see how much influence that the financial institutions of this country have on running farms almost immediately. I have two neighbours that aren't able to access operating money from these financial institutions and are just going to plant a crop without fertilizer and chemicals and hope to collect crop insurance. So you don't have to wonder if these financial institutions will influence the way people work the land.

[cowman]

One year, when I was a young guy, I bought some steers with the banks money. 6 month loan. Well it was spring, the market in the tank, my loan due. I had located some grass and trotted into the bank looking for a four month extension. The loans officer was this snotty kid who gave me a big lecture about how I had no idea of what I was doing...no loan extension! So I sold the steers. Probably broke even. In the next four months the market went wild! I would have made about $200/steer on 25 steers=$5000. A lot of money back then!
The next winter I was roughnecking on a drilling rig west of Drayton. We'd been in camp for two weeks when we got a weekend off in town. Well we were young and full of beans so headed for the bar. Guess who had been transferred to Drayton? And guess who just had happened to decide to go to the bar for a Saturday night out? You guessed it...The banker!!
I gave him a little personal lesson in banking that night....one he'll always remember when he looks in the mirror!

[pandiana]

I can't help but wonder how the projected rise in interest will effect those farmers who are heavily leveraged to the banks?

Are most farm loans long term and locked in at specified interest rates?

[carebear300]

The rise in interest rates will devastate those farmers that are highly leveraged. Once again the farming industry will have to help pay the cost of keeping inflation at bay. It used to be when I started farming 30 years ago that your interest rates on loans for land could be locked in for the full term of the loan. Nowadays you can lock interest rates in up to ten years but you have to pay just about double the current rate to guarantee a rate for that length of time.

[Steve]

To all bank haters, please ask yourself these questions.

If your neighbor farmer asked you for a loan under these conditions:

Farmer “ I need some money to plant my crop, “ but I don’t know if I can pay you back because, if it doesn’t rain, or it may hail, don’t know what it will be worth or can be sold and I can’t afford to insure the crop.”

Now if you decide to give him a loan, would you just say, “ how much do you need and you’re a good hard working farmer so pay me back whenever you can.” Or would you put in conditions and also add on a risk factor?

[carebear300]

Yes Steve I see your point. The fault is not the banks that the legislation allows them to operate the way they do. So in the end we have to convince the politicians in this country to allow farmers to operate the same way.

[Steve]

Carebear300 "sorry but you didn’t answer my question but again pointed fingers."

[Steve]

Oh sure blame the bank because you can't make your payment, beat up on the loans officer, burn all the banks down. There's only one idiot in these samplings.