Sum of all Fears

[cottonpicken]

Jesus Boots,greed,optimism and buy my books?

The guys that seen this coming are scared to death.

[workboots]

Im just saying that there are lots of people that saw a bubble forming in real-estate in the united states, and recognized an imbalance in trade. Im sure many thousands of savvy investors took money out before the stock market tumbled. I will agree that there are some famous individuals that became more famous for preaching doom on business broadcasting stations or writing about it. A lot of these guys are always bearish and make money selling books about the potential problems they foresee.

Predicting macro economics with precise timing is almost impossible, too many factors, but if you stick to your guns long enough maybe you’ll look like some genius economic forecaster. Then you can write some books about it.

There are just as many people preaching deflation. If they are right, im sure a handful of them will become famous in the next decade. Write some books, show up on Bloomberg with their head held high.
But who knows, im on the inflations side, but then again that could just be my optimism speaking, as Jim Rogers points out in one of his books, “Commodities always outperform equities in time of inflation”.

Should I point out that I bought his book after I started listening to him, knowing he predicted the collapse? It’s interesting listening to how these guys speak on business networks, always sounds rehearsed as if they lack improvisation skills… It’s just entertainment after all.

any way you look at, farming will always be a great business.

cheers

[poorboy]

So following along with some of these posts I am confused on how best to handle the coming hyperinflation.

I read that some say to pay down debt. Would it not be much better to just lock in an interest rate for the term of the loan? If the rate is fixed, we farmers should have much more available dollars to pay our loan off, once our commodities double in value? Should we not be leveraging ourselves and borrowing more money to buy land and upgrade machinery if we can get a fixed interest rate for the full term of the loan?

Obviously cash in hand is not going to be a good thing, so for any grain you sell now, you should pay off all your bills, prebuy fertilizer, chemical, etc. Do not sell any more grain than you have to, as the grain value should keep increasing if the dollar is tanking.

Long term costs, such as power and nat gas contracts for the farm should be signed up.

Any RRSP investments should be in stocks of companies in gold, silver, etc. or nat resource (oil and gas).

Are these the type of things that farmers could be doing to help protect themselves or to profit greatly from any potential collapse that is coming?


Just want to make sure that I understand steps everyone is taking to help protect themselves. Also there is a huge opportunity coming as well and not sure where to be for the best seat.

Gold is going up in price, but how do you buy gold and not just get into something that is all speculation money?

Thanks for any opinions that can be shared. I see something happening also, but don't know how best to prepare or invest.

[cottonpicken]

Im not telling anyone how to play it.

The scary curve ball variable is the canadian currency it
has a potential to inflate in value thus screwing the
best laid plans for the inflation scenario.

[poorboy]

Cotton,

Nobody is expecting you or others to offer advice as to what everyone should do. But you must have a strategy for yourself that you could share. You have be providing yours and others with similar views, a potential economic climate that may be coming. Obviously you must have a game plan on how to deal with this climate if it does come.

If the canadian dollar drastically explodes higher to the upside, so must most other world currencies (except the us $), which would help us exports and hurt canadian exports. As long as the us does not have any bumper crops, it should remain like the statis quo for our sales and expenses in Canadian dollars.

Do you see a real reason to be in a rush to pay off debt? I can see locking in fixed interest rates to protect from rising interest rates?

How do you buy gold, in such a way that you can easily cash it in if you need the cashflow and yet not get caught up in the rush of money into gold (such as mining stocks, precious metal funds, etc).

I have been following along with the articles on QE, but am not sure how it is going to impact Canadian farmers, or where the opportunities might exist to take advantage of whats happening.

If the Can $ is going to climb perhaps having cash in the bank and being able to spend it on things in the US, such as real estate, machinery, etc.?

Just hoping you can share what you are thinking of doing on your own operation.

[cottonpicken]

I dont see the canadian dollar out pacing the
commodity surge.

Whats happening in front of everyones eyes is the
worlds "reserve" currency is going down the toilet.

Another part is usdx trade hedgeonomy.All global
trade is settled in us dollars,this where the demand
comes from.

What happens when nobody wants dollars?

Its going to be like a fire in a crowed movie theater.

Im not scared of a reasonable amount of debt with
fixed rates.Unless your talking about resedential
morgage bubble in canada-god help those poor
souls.

If you want to buy gold you can go to a bank and
order it,the mint makes what are called maples in
one ounce coins some banks in large centers have it
on hand,bank of nova scotia is into this the most.I
dont recommend coin dealers they will screw
you.Ebay is also a resonable way to do it.

Another option is the cef fund of canada,its been
audited so your safe and its rrsp eligible and
probably tfsa.It holds hard bullion for its investors.

[poorboy]

Thanks for your views Cotton.

I also do not view the cdn $ to be immune to the whole monetary situation and can see more $$ moving into "real" items such as natural resources and commodities.

Because I can see commodities holding their value for a while, I am thinking it is not a bad time to be buying land and taking new mortgages if you fix the interest rate. As long as you are not over extending yourself. I am fortunate enough to have some grain harvested and even though quality is poor, prices are good.

I did not know that there was a fund that held actual product. Good to know. When buying gold coins, how does purchase price relate back to actual gold prices? Are coins a decent way to hold gold in ones portfolio, or is the metals fund much better in your opinion. Not sure how liquid the coins are.

[cottonpicken]

What ever you do in life at least once hold a one
ounce gold coin in your hand.

The ultimate form of payment becomes very clear.

But in todays world i like different paper
instruments-as you say for liquidity,rrsp,tfsa etc.

Truth be told i ahvent bought gold for years and
years,although i follow it every day things like sugar
really catch my attention anywhooo...

The real action turns to leverage,which is not for
everyone.