Posted 11/16/2023 08:23 (#10484091 - in reply to #10483907) Subject: Well I’m here..
sand85 - 11/16/2023 06:47
And that is the textbook example of survivorship bias.
Everyone whose equity and liquidity got eaten up servicing inflated debt in the 80’s after the reset and didn’t survive isn’t here, but every who survived or entered since is on here.
Well I’m here..
I was in high school in 1981 after the go go 1970s.. the saying was.. “well they’re not making any more land so you better saddle up.. you can always sell if things get tight.”
The 1970s were driven by the great grain robbery as Russia and China came in to cover for failed crops. Petroleum went to the moon after the OPEC embargo for the US supporting Israel and inflation was the rage. Interest rates went from 7 to 18% interest as Paul Volker took a surgeons scalpel to the US economy.
My Uncle was upside down (like most of us) so he sold the quarter he bought and leveraged to develop irrigation.. to my parents. He had some equity but by the time he paid the capital gains tax.. the drought of 81.. or was it 83? Finished him off.
I cut my teeth helping my parents suffer through 4 years of negative income and falling land valuations. Frankly it was the 1985 farm bill which ushered in land set asides of as much as 33% in exchange for transfer payments.. which almost exceeded the rest of the farms income which stemmed the losses.
Everyone says it was the bankers but truth be told it was the regulators.. shooting the bankers.. shooting the farmers who were upside down. We almost lost as many bankers and banks.. as we did farmers and farms. Rush County lost like 5 banks..??
I watched a one year old 4850 MFWD JD tractor sell at auction for $0.50 of retail 18 months after the forced liquidated farmer drove it off the lot.
It took 15 years for land values to return to the levels we paid in 1981.. by 1996.
before it blew.. the average sentiment was like this thread.
Kubs Den “ INSANITY OF PAYING 7% ON AN ASSET (FARMLAND) THAT ONLY EARNS 2%”
