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Central Minnesota | Living in west central Mn, your full aware as am I, about the guys who are overpaying for rent. There's plenty of guys out there who still are offering big money for rent. Still happening here. I know of a few guys who have lost land because someone has come in and offered a lot more. And the guy who lost it was paying to much by todays costs. But you can't really stop it. It's a vicious cycle we are going thru right now.
I'm not so sure this is going to be like the 80's. Similar in ways. But will be different. Government is so broke, and has so much debt, that feds can't raise interest because of that. The last two presidents have created so much debt in this country, that the country just wouldn't survive an interest hike. The late 70's and early 80's, we didn't have the debt in this country like we have now, and could survive the interest hike. I don't think we will see an interest hike until someone can reduce the debt this country has. And if we don't have the interest rates we had in the 80's, it won't be quite as bad.
But at the same point, a lot of people are taking advantage of the low interest and using it. Possibly using it to much now. More than what they should. That 0% or 1.9% interest on machinery sounds good. But that note still has to be paid. So people are taking advantage of the cheap money. But probably over extending themselves.
No matter how you look at it. This could be easier to handle than the 80's. Because of lower interest. But, this could also be far worse than the 80's, because of the low interest. Could cost more in the overall picture.
But a correction is somewhat needed. People were and are getting far to out of hand. Companies are charging far to much for their product, just because they can, and the market will allow it. Rent, and land prices are far to high, because people will pay it. Equipment prices are far to high, because people will pay it. When you haul that semi load of corn in, and the check is 6k+ for one semi load, some people get a bit careless. Now when you haul that load in, and it's 3k, people are realizing that whoa! I can't deal with that, and never expected it.
Nobody, and no company out there can stand to see us make money consistently. Once you start to see a good profit on this end, every supplier out there needs to dig into and get their piece of the pie. | |
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The 80's then... The teens now
