Best "inflation proof" farm investments?

[Humble Village Farmer]

These stories continuously do the rounds & it's the sort of BS that bankers spout around to get you to fix loans at higher rates or worse than that insist your borrowing must have some sort of interest rate protection, which could cost you your farm.

The BoE MPC swings from hawkish to doveish, looking like they are justifying their pay. The ONS have to revise the stats because they've got it wrong again. There's no real growth anywhere & Government national debt is now at £2.14 trillion. https://www.statista.com/statistics/282647/government-debt-uk/#:~:text=Government debt in the United,trillion pounds in March 2020.

No one wants to buy government bonds or gilts whilst QE is pumping more devalued money into the economy. The figures are manipulated to fit the global ratings agencies like Moodys so the country is still seen to be a safe place to do business. But it isn't, it's a massive roulette wheel where the retail banks are surviving on overnight borrowing from the international exchanges, and declaring inflated balance sheets by rehypothecating your farms out to mortgage bonds, in some cases 7 or 8 times (i.e. your farm as security for a loan sits in a number of different mortgage bonds sold onto different financial institutions. Each time your bank sells on your security the value of it sits in the balance sheet of the bank). So when that bank says it's the biggest bank in the world it may have a balance sheet bolstered by the rehypothecation of the value of your & everyone else's farms multiple times over, which is fine as long as the banks can still borrow on the overnight money exchanges - but not fine when like RBS in 2008 they couldn't. Nor is it fine if the bond holder wants to liquidate the bond for cash. When a Government is over leveraged and it has pulled all its rabbits out of its hat to erode its debt, it can only print money.

The small amount of recent inflation isn't as a result of growth, it's half a step forward after a thousand steps backwards. The Government cannot afford higher interest rates. It needs some inflation to erode national debt and will try to create some. The only inflation is some rising costs due to Brexit & firmer commodities, but it's like weeing in the sea. I notice the Commodity Super Cycle has gone back home for a bit of a nap as well.

If someone tells you it's raining it's always better to go outside & check. The best inflation proof investments, usually stuff they aren't making anymore.

Is this still your opinion? Do you think much has changed since last May?

 

[Billboy1]

Great idea, but I think that you may have to update your security and surveillance precautions to protect your investment!

what about the balloon payment at the end

 

[AT Aloss]

Is this still your opinion? Do you think much has changed since last May?

Interest rates will go up in the USA as it has growth & largely reversed its COVID recession; Britain will try & follow suit because it needs to retain its share of inflows of foreign money to sustain the financial sector. But there's still no real GDP growth in Britain, only increasing prices, one might even suggest that's stagflation. The spectre of base rate increases is there but most retail banks are still charging a significant margin to BoE base rate anyway. The major differences from May are further commodity price increases, government economic policies adjusted to stimulate inflation as a tactic to erode the value of the national debt (which I don't think are sustainable) & less quantitive easing. The bond market is being made to look more attractive as a result but there's a whiff of corruption about the UK. Perhaps it's the desperation to sell government debt?

The main difference between the USA & UK is that the USA has invested heavily in its own economy & has generated real growth. Britain hasn't, so I don't believe the UK growth story & Andrew Bailey at the BoE can't lie straight in bed, nor can most of the government. There'll be more brexit blues for Britain yet & certain sectors aren't going to recover from covid measures. I think it's still hard to find anything positive to say about the UK economy, but that doesn't mean the BoE or the government won't try, and I do wonder who they're trying to convince & why (maybe the bond markets)?

Perhaps the ONS are wrong about national debt

UK government debt and deficit - Office for National Statistics

Quarterly estimates of UK government debt and deficit.

www.ons.gov.uk

 

[Humble Village Farmer]

Interest rates will go up in the USA as it has growth & largely reversed its COVID recession; Britain will try & follow suit because it needs to retain its share of inflows of foreign money to sustain the financial sector. But there's still no real GDP growth in Britain, only increasing prices, one might even suggest that's stagflation. The spectre of base rate increases is there but most retail banks are still charging a significant margin to BoE base rate anyway. The major differences from May are further commodity price increases, government economic policies adjusted to stimulate inflation as a tactic to erode the value of the national debt (which I don't think are sustainable) & less quantitive easing. The bond market is being made to look more attractive as a result but there's a whiff of corruption about the UK. Perhaps it's the desperation to sell government debt?

The main difference between the USA & UK is that the USA has invested heavily in its own economy & has generated real growth. Britain hasn't, so I don't believe the UK growth story & Andrew Bailey at the BoE can't lie straight in bed, nor can most of the government. There'll be more brexit blues for Britain yet & certain sectors aren't going to recover from covid measures. I think it's still hard to find anything positive to say about the UK economy, but that doesn't mean the BoE or the government won't try, and I do wonder who they're trying to convince & why (maybe the bond markets)?

Perhaps the ONS are wrong about national debt

UK government debt and deficit - Office for National Statistics

Quarterly estimates of UK government debt and deficit.

www.ons.gov.uk

Strikes me that everything has appreciated away from cash over the last 12 months. Wheat, oil, fertiliser, UK housing, building materials, UK stocks. Qe has chased up the value of everything.

The real question is what's going to happen next?

 

[Neddy flanders]

Strikes me that everything has appreciated away from cash over the last 12 months. Wheat, oil, fertiliser, UK housing, building materials, UK stocks. Qe has chased up the value of everything.

The real question is what's going to happen next?

it always is.
Today :
Average UK house price £268,341
FTSE 100 7313
Gold $1823
Petrol £1.45/l

make your predictions for next year please.

 

[toquark]

Strikes me that everything has appreciated away from cash over the last 12 months. Wheat, oil, fertiliser, UK housing, building materials, UK stocks. Qe has chased up the value of everything.

The real question is what's going to happen next?

It’ll be interesting to find out. I can’t help but think a 2008 style crash is around the corner, maybe not imminently but in the next few years. This time though, it’ll be difficult for governments to mitigate the effects of another major recession as they’ve been firing all their guns in their arsenal for 15 years and have now run out of ammunition.

 

[Humble Village Farmer]

it always is.
Today :
Average UK house price £268,341
FTSE 100 7313
Gold $1823
Petrol £1.45/l

make your predictions for next year please.

Good question. I don't have confidence in any of these, although I'm not a seller. Money is probably what I have least confidence in.

What about wheat in a year's time??

 

[Humble Village Farmer]

It’ll be interesting to find out. I can’t help but think a 2008 style crash is around the corner, maybe not imminently but in the next few years. This time though, it’ll be difficult for governments to mitigate the effects of another major recession as they’ve been firing all their guns in their arsenal for 15 years and have now run out of ammunition.

I'm not so sure about that. There is just so much money chasing everything.

 

[DrWazzock]

Grain trailers.
Wish I’d bought a row of them in 1990.

 

[Woolless]

It’ll be interesting to find out. I can’t help but think a 2008 style crash is around the corner, maybe not imminently but in the next few years. This time though, it’ll be difficult for governments to mitigate the effects of another major recession as they’ve been firing all their guns in their arsenal for 15 years and have now run out of ammunition.

It's been suggested that these Chinese property company defaults might set the ball rolling?

 

[Humble Village Farmer]

It's been suggested that these Chinese property company defaults might set the ball rolling?

If they're allowed to default?

 

[tullah]

it always is.
Today :
Average UK house price £268,341
FTSE 100 7313
Gold $1823
Petrol £1.45/l

make your predictions for next year please.

Assuming people jump off the merry go round and get real then...
House 200
ftse 5500
gold 2500
petrol 1.20

 

[andybk]

Assuming people jump off the merry go round and get real then...
House 200
ftse 5500
gold 2500
petrol 1.20

ag land after 2024 ?

 

[Somerset Farmer]

Fertiliser - according to all the merchants this morning. ‘It’s only going up’

Well they were not wrong this time !!!!!!!(this was originally posted May 2021)

 

[tullah]

ag land after 2024 ?

Fortelling how the herd will be bidding is tricky but let's say 6k

 

[Bramble]

Well they were not wrong this time !!!!!!!(this was originally posted May 2021)

Just paid a bill for 3 loads of imported AN ordered early and have got a bill due for next month for 1 load of U.K. AN ordered last month.

There isnt much difference ££££ between the 2 invoices

 

[Humble Village Farmer]

Fortelling how the herd will be bidding is tricky but let's say 6k

Not saying you're wrong, but if people are trying to get rid of money, land is one thing that will still be there in the morning.

 

[AT Aloss]

Interest rates will go up in the USA as it has growth & largely reversed its COVID recession; Britain will try & follow suit because it needs to retain its share of inflows of foreign money to sustain the financial sector. But there's still no real GDP growth in Britain, only increasing prices, one might even suggest that's stagflation. The spectre of base rate increases is there but most retail banks are still charging a significant margin to BoE base rate anyway. The major differences from May are further commodity price increases, government economic policies adjusted to stimulate inflation as a tactic to erode the value of the national debt (which I don't think are sustainable) & less quantitive easing. The bond market is being made to look more attractive as a result but there's a whiff of corruption about the UK. Perhaps it's the desperation to sell government debt?

The main difference between the USA & UK is that the USA has invested heavily in its own economy & has generated real growth. Britain hasn't, so I don't believe the UK growth story & Andrew Bailey at the BoE can't lie straight in bed, nor can most of the government. There'll be more brexit blues for Britain yet & certain sectors aren't going to recover from covid measures. I think it's still hard to find anything positive to say about the UK economy, but that doesn't mean the BoE or the government won't try, and I do wonder who they're trying to convince & why (maybe the bond markets)?

Perhaps the ONS are wrong about national debt

UK government debt and deficit - Office for National Statistics

Quarterly estimates of UK government debt and deficit.

www.ons.gov.uk

Other market commentators think this....

GBP Q1 2022 Fundamental Forecast: Additional Bank of England Rate Hikes are on The Way

The Bank of England (BoE) started the cycle of tightening monetary policy by hiking the UK Base Rate by 15 basis points to 0.25%, the first-rate hike in over three years, at the last Monetary Policy Committee (MPC) meeting of 2021.

www.dailyfx.com