Demand

TWF · Mar 19, 2021

Ribble said:
I don't doubt the inflation will get there, £100 used to be a salary.

What I doubt is that the upcoming generation are going to be able to afford to buy out the older generation without some rather large changes in the price of assets versus incomes.

Already the average age of a western farmer is retirement age, which tells you that even their childrens generation aged 40 or so can't afford to buy them out.

My father and I bought a 300ac farm interest only in the early 80's which we worried about not long after when interest rates hit 15% . I paid it off a three years ago for a little more than a big combine costs. Then two years ago my son and I have traded up to a bigger farm which will now take his lifetime to fully pay off. He isn't having to buy it off me but the business will have to top up my pension pot.

tullah · Mar 19, 2021

Clive said:
i would borrow as much as is possible right now to buy physical assets

inflation is higher than interest rates = free money !

And when the party stops and people get real watch assets crash. Nobody can foretell when the masses will lose confidence though.

glasshouse · Mar 19, 2021

Clive said:
that’s capitalism for you - i never said any of this was fair !

Its not capitalism at all !!!
Property is being subsidised to the hilt, benefitting the rich at the expense of the poor.
There is no free market

Hilly · Mar 19, 2021

glasshouse said:
Its not capitalism at all !!!
Property is being subsidised to the hilt, benefitting the rich at the expense of the poor.
There is no free market

How?

glasshouse · Mar 19, 2021

Hilly said:
How?

Help to buy
Bailed out banks
Total lack of property taxes
Uncapped farm subsidies

Farma Parma · Mar 20, 2021

Hilly said:
What are you going to get borrowed up to the doo dars moving forward for then ?

i dont get the logic in that neither.
Id rather have plenty available cash for them raining days which are coming.
then have even more debt & things on finance
there is a fine balancing act mind.
BPS is dropping id rather be ahead in cash terms for that i can tell you.

Farma Parma · Mar 20, 2021

Clive said:
Building another shed / yard at the moment with cheap money

the building will be worth more than the cost to build and I can make a higher return on it than the money costs

It's asset value will also rise with inflation whilst the magnitude of the debt falls in relative terms

No brainer

View attachment 948097

Easy if you own the land to do this not even an option as a tenant farmer iam afraid.

d williams · Mar 20, 2021

Clive said:
worry too much and best option is not to get out of bed in the morning !

But the government just pass it on to future generations
Not sue where the money is going to come from to repay the amount their borrowing
We don’t seem to make anything to sell these day’s
if debt becomes expensive and assets valueless then our government are in more trouble than most !

db9go · Mar 20, 2021

glasshouse said:
Help to buy
Bailed out banks
Total lack of property taxes
Uncapped farm subsidies

I dont totally agree with no 2 the banks were bailed out but since 2008 the government has help to sort them out with high margins over base
before 2008 you could borrow at 1% over base and then for the next 10 years they put the margin up to what ever they could get away with 2/3/4% over base
Just because the base is low every one seems to think money is cheap but what the customer pays its a lot dearer than before

egbert · Mar 20, 2021

Forkdriver said:
All I am saying is that no one saw the crash last time. Things change quickly. You are not the Messiah any more than l am.

er...beg to differ there.
I sat on my hands through the lead up, then the crash, and then stepped in and cleaned up nicely thanks.

despite @Clive 's best assurances, I might do the same again yet!

glasshouse · Mar 20, 2021

Back in 2008, house prices should have crashed and all the banks should have gone belly up, but govt stepped in to save their own arses.
All they did was kick the can down the road.
They allowed banks to rob their customers in order to “ rebuild their balance sheets”.
Its still coming.
Asset inflation is rampant because the banks could yet go pop and you lose all your money.

Yale · Mar 20, 2021

glasshouse said:
Back in 2008, house prices should have crashed and all the banks should have gone belly up, but govt stepped in to save their own arses.
All they did was kick the can down the road.
They allowed banks to rob their customers in order to “ rebuild their balance sheets”.
Its still coming.
Asset inflation is rampant because the banks could yet go pop and you lose all your money.

However there’s no blood on the carpet.......it worked then and it will probably will work now.

There is no gold standard.

Money is about confidence in a currency,this may be to the farming communities disadvantage at the moment as the UK is half way down the track with Covid vaccinations,Europe are still in the starting blocks.

A strong pound is going to be our problem.

glasshouse · Mar 20, 2021

Yale said:
However there’s no blood on the carpet.......it worked then and it will probably will work now.

There is no gold standard.

Money is about confidence in a currency,this may be to the farming communities disadvantage at the moment as the UK is half way down the track with Covid vaccinations,Europe are still in the starting blocks.

A strong pound is going to be our problem.

I dont agree.
We were a financial basket case before brexit and covid, there is a whirlwind coming.
How much is hm govt pumping daily into help to buy?
The furlough?
What happens when scotland casts off from the sinking ship?

db9go · Mar 20, 2021

glasshouse said:
I dont agree.
We were a financial basket case before brexit and covid, there is a whirlwind coming.
How much is hm govt pumping daily into help to buy?
The furlough?
What happens when scotland casts off from the sinking ship?

Then we will better of when they have gone

midlandslad · Mar 20, 2021

glasshouse said:
I dont agree.
We were a financial basket case before brexit and covid, there is a whirlwind coming.
How much is hm govt pumping daily into help to buy?
The furlough?
What happens when scotland casts off from the sinking ship?

Does Help to Buy cost the Gov anything? At worst they own a share in the property, it isn’t free money!

Pringles · Mar 20, 2021

No, No, You have it all wrong @glasshouse says that we are going to be stinking rich and everyone will want to come and live in Scotland!!!!

glasshouse · Mar 20, 2021

glasshouse said:
Its not capitalism at all !!!
Property is being subsidised to the hilt, benefitting the rich at the expense of the poor.
There is no free market

db9go said:
Then we will better of when they have gone

dream on

glasshouse · Mar 20, 2021

Pringles said:
No, No, You have it all wrong @glasshouse says that we are going to be stinking rich and everyone will want to come and live in Scotland!!!!

You been on the whisky again?

Clive · Mar 20, 2021

egbert said:
er...beg to differ there.
I sat on my hands through the lead up, then the crash, and then stepped in and cleaned up nicely thanks.

despite @Clive 's best assurances, I might do the same again yet!

what were the 2008 opportunities ? only people who did well out of 2008 ironically were the bankers ?

house / land / property prices didn’t crash - in fact the opposite happened over the following decade

it felt like they were kicking a can down the road but it worked ! they solved the problem by giving everyone a pay cut and let inflation pay for the mess that sub prime caused

seems clear they are going to solve covid economics the same way

glasshouse · Mar 20, 2021

midlandslad said:
Does Help to Buy cost the Gov anything? At worst they own a share in the property, it isn’t free money!

Not when they simply print it i suppose

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100% I’ve had enough of farming!

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