Inflation is here not Deflation.

[jazz]

But what is the difference between having money sitting in a bank account, or money sitting in bins?

If corp tax rates go to 28% like Biden is pitching, then storing grain in the face of that with a devaluing currency makes it a different decision.

Taking that tax hit and then struggling to finding a productive home for the cash may make less sense than just holding the grain and borrowing against it.

I should add that if we do see a hard event of some sort, stored grain is going to be a lot more valuable than any other asset I can think of including Bitcoin, gold, equities etc. And if the carbon tax gets too high, we can always burn the grain for heat.

[flea beetle]

Interesting perspective jazz. Never thought of doing that, but taking that one step further, had a guy done just that and borrowed against the grain and put it in the stock market a few years ago, I might be looking for a private island now!

[jazz]

Interesting perspective jazz. Never thought of doing that, but taking that one step further, had a guy done just that and borrowed against the grain and put it in the stock market a few years ago, I might be looking for a private island now!

When I had my account at BMO they had an instrument to borrow against stored inventory. I never used it or inquired about it. I mean RBC lets you borrow against gold as long as they hold it for you.

I have neighbors that store canary and flax for yrs. Met a guy last fall had 5 yrs of durum stored. Other neighbor stored all that fusarium durum for a few yrs and then trickled it into the market.

But flea, forage is perhaps right. Even if you are holding future inventory, it probably makes more sense to hold that in a corp than personally. You have sort of locked yourself into an eventual big tax hit personally unless you will the grain to your kids or something.

[biglentil]

What good are dollars if there is nothing left to buy? Availability of tangibles is terrible and getting worse. Dollars only come into existence with debt, if debts aren't paid what value do dollars have? Dollars are not wealth only a claim on wealth and that claim is fickle. We are in a fickle pickle.

[jazz]

This is an interesting take, discusses japan like errol pointed out. The M2 velocity chart would support that deflation is the eventual likely outcome.

https://www.treasuryandrisk.com/2020/04/28/who-will-thrive-in-the-coming-deflation/?slreturn=20210317131610

.

[biglentil]

Japan has a very unique culture, one based on minimalism, savings and a demographic heavily squewed to the elderly. But like all heavily indebted nations their time is coming.

When credit risks develop due to extremely high debt to gdp or a collapse in productivity interest rates rise, countries and the populace default. Think Venezuela.

Very few seem to understand inflation and hyperinflation it seems. They think it is only a result of things going well in an economy with plenty of velocity. If that's the case why are we seeing price inflation now when productivity is tanking and everyone is stuck at home not going out and spending? The nastiest price inflation is seen when things are not going well and central banks attempt to inflate the debt away.

[farming101]

6.25 wheat in 1980 equals 20.52 in today's money according to the BofC inflation calculator