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Nw Iowa | 70’s were wild times. For 7 or 8 yrs everything you bought was gold and in under 18 months it was over. Land bank or Farm credit did a lot of equity borrowing so guys that payed 300 for a farm were able to borrow 2000 against it, some to buy more land, some just increased their life style on borrowings. When the high interest hit, it affected everybody, those that had too much debt and couldn’t afford the interest and those that could make the payments but collateral was only worth half or less and in some cases less than a third. Things are different now because bankers do cash flow borrowing so debt is more under control. In 80’s Reagan could raise interest rates because government had very little debt, that is not a option now. So history will repeat itself but not necessarily the same issues that caused it before. My concern this time is a government out of control that will head in a direction that will be uncharted territory | |
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It's not all inflation
