Expect another bubble in mid-late 2011, but this time in the heart of america – our farms and our breadbasket. Over the past decade the prices of farmland has been steady rising. This year, due to failed crops in Russia, prices are at a nice high – but its not going to last. Because of the increased profits, farmers are spending more money, buying more equipment, and a lot of them are going deeper into debt.
All backed by the banks.
Here is the problem, the currently high wheat and corn prices are being fueled by crop failures in Russia. Putin also signed an order blocking all grain exports until July 2011.
So right now, not only is one of the worlds largest grain producers not producing, they also have an export embargo in place.
Lets say in 2011 Russia has a bumper crop of corn, wheat, grains,,,. In July 2011 Russia dumps all its extra produce on the world market, prices come crashing down. American farmers are not able to pay back their loans due to the low market prices.
And it does not have to be Russia either. Lets say that China decides to get into corn, wheat or grain production on a massive scale. China has an almost unlimited work force, so why not use them for cheap labor. Instead of growing food here in the USA, why not have it grown overseas and shipped back? Everything else is made in China, why not the majority of our food?
Banks foreclose on small farms and sell the land to developers or large company controlled farms.
Good-bye vast majority of small family owned farmers.
When are people going to learn to stay out of debt?
Post your comments in this forum thread about the coming 2011 breadbasket bubble.