Farmland Derivitives

**farmaholic** · Mar 28, 2016, 17:54

Would there be enough volume and volatiltiy of land sales to make a derivative work?

...another smoke and mirror shell game investment instrument?

**furrowtickler** · Mar 28, 2016, 18:34

Gary Pike behind this scheme too ??

**ajl** · Mar 28, 2016, 19:57

Well this could be a way of mopping up the huge amount of cash central banks have printed. It could be a way of hedging the downside as we switch from an inflationary to deflationary environment.

**bucket** · Mar 29, 2016, 05:06

Call me a tin foil hat conspiracy theorist but after watching the big short isn't this what the movie was based on?

**biglentil** · Mar 29, 2016, 06:38

Have you been watching used equipment prices and farmland. Deflation is a myth perpetrated mainly by central banks to create the illusion that the paper they print is holding its value.

**biglentil** · Mar 29, 2016, 06:58

They may use derivatives like they do with silver and gold to artificially keep the price at bay. What they may find instead is the physical sales price of land will be significantly higher than spot. #ComexIsBusted

**farmaholic** · Mar 29, 2016, 07:16

Its like creating an asset that doesn't exist....a way of participating in an asset's market without buying or selling the physical asset. "Betting" on a move, either up or down and paying a premium to participate, like insurance, it may expire worthless.
Basically can be as simple as "options"...calls and puts and other complex contracts.

Does anyone think there is enough volume and volatiltiy in the farmland market for this to work?
Land prices always seemed to be like a slow moving sloth. Stable slow appreciation over the long haul.

Re land and machinery prices: it's turn at deflation may be coming. Pulse prices will help keep the farming "thrive" alive.... broken record....I still say there is a correction coming. Buy your put(?)!

**ajl** · Mar 29, 2016, 07:24

Lets see: oil at $100 per barrel summer of 2014 now at $38 and change today. Corn over $8 US per bushel Aug of 2012 now under $3 in some locals. That is what deflation looks like so it may be more real than you think. Here in Canuckistan local currency is a joke so we have not experienced much deflation yet but in $USD terms deflation is real.

**biglentil** · Mar 29, 2016, 11:39

I could not imagine how they could enforce physical delivery of such an individually unique asset class. Like gold and silver markets they would deem it appropriate to settle in more paper like the futures based GLD and SLV etf. Maybe they will call the etf LND lol. In such case it wouldn't matter if any physical existed for sale or actually traded.

Farmland Derivitives