Buy Metals or Farm Land?

[McChronagle]

I've done a lot of research on gold/silver and have been able to find many theories and opinions on the subject. My next venture will be into farmland which I know nearly nothing about. Some basic questions are, where can I find land for a decent value (still pretty cheap) that can be grown on for a majority of the year. This is sure to be more of an opinion but I like to hear what anybody has to say about it. If anybody knows any sites with good information/research or good auction/land sale sites I would love to check them out.

My main question is regarding timing (the million dollar question). People like Jim Grant seem to think there might be a bubble in farm land (specifically Iowa). With interest rates at record lows, I fear that many farmers are buying up land with leverage and artifically bidding up the prices. This along with a long list of subsidies makes me very cautious about purchasing land at this point. So what does everybody think? In a hyperinflationary scenario, would gold rise more than land? In a deflationary scenario where the banks are forced to fail and fractional reserve banking collapses, would land go up priced in gold? If interest rates rise and farmers lose their subsidies, would price of land fall a substantial amount? These are just a few of my concerns, I'm looking for any input. Thanks

 

[Icymudpuppy]

I would suggest central America.

 

[TruthisTreason]

Here's a site: http://www.landandfarm.com/search/Kentucky-land-for-sale/

 

[Acala]

I have nothing to say about what might happen with land prices. I wouldn't buy to speculate. I would buy to live on and produce. If I had the dough, I would buy some land right now on the western end of the great plains (or maybe in the Palouse) with access to water, and set it up as irrigated pasture for a small cow/calf operation.

With the collapse of the Eurozone, there might be a couple years of new life in the dollar, but ultimately those dollars are going bye bye. Productive land is about as good a thing to convert those doomed FRNs into as I can think of.

 

[Steven Douglas]

I'm in the same boat as you. For me it's not an either/or, but both and in what order.

I think farmland is rarer than gold or silver, tied to something we all need more than money itself, and while it is prone to speculation and bubbles, and the prices of the commodities produced can be manipulated in the aggregate, the land itself is not as easily manipulated as PM's, primarily because there is no substitute for good farmland.

Socio-economic engineers (political and politico-economic) who just can't keep their manipulative tentacles to themselves, love thinking in aggregate terms only, and like to meddle in human affairs and real human lives on the macro-scale. They have proved their ability to make anything count as money, but they can't make anything count as food, or what is required to produce it. And when it comes down to the worst case scenarios, when the huddled masses in densely populated areas find store shelves emptied, access to arable fertile land is access to survival itself, giving extreme advantages of farmland over PM's.

In terms of tangible wealth, regardless of transient prices or market dynamics, for me it's:

1) The Good Earth (farmland specifically)
2) Hard Commodities

Criteria for farmland would include:
a) the ability to operate independently from all grids for an extended period of time (water, fuel, electricity, etc.,)
b) a low profile with minimal proximity to major political and economic centers (the powers that be of which can confiscate everything from you with impunity in any time of crisis)
c) I don't know why the emphasis on year-round growing. Many look to more southern and mid-western farmland in more temperate regions for that reason, but North Dakota and other border states (proximity to flight if we're really screwed) have extremely rich, fertile farmland available at extremely reasonable prices. Moreover, the people in those regions are much hardier in terms of what it takes for long term survival.

 

[Kelly.]

why will your next adventure be into farmland if you know nothing about it?
sounds like a quick way to lose money, imo.

also, you might want to have midwest farmland soil checked BEFORE buying it. the overuse of chemicals as made some farm land completely dependent on fertilizers (ie there is no life in the soil, and the residual chemicals prevent new life from taking hold)

 

[McChronagle]

Sorry I should have clarified, I am not looking at land as a speculative instrument or a way to make money right now. I am looking at this almost purely as a survival necessity where I would need to live off the land and sell/share whatever is left over. I am concerned about the timing aspect just because I have very little cash to work with at the moment and need to get the most bang for my buck.

 

[oyarde]

I pretty much agree with Acala , having some metals and a few acres of tillable land to grow on is a good thing at this point for anyone . If you can , do a little of both , I do, cannot hurt.

 

[McChronagle]

c) I don't know why the emphasis on year-round growing. Many look to more southern and mid-western farmland in more temperate regions for that reason, but North Dakota and other border states (proximity to flight if we're really screwed) have extremely rich, fertile farmland available at extremely reasonable prices. Moreover, the people in those regions are much hardier in terms of what it takes for long term survival.

I've lived through enough winters in my life in a nice comfortable home. I'd rather not have to live through them in a shoddy cabbin lol. I would also prefer to be able to grow fresh stuff year round instead of preserving for the winter. I guess I can't be too picky though.

 

[Kotin]

cant grow fruit trees in silver and gold.. the value of farmland trumps all.

 

[oyarde]

cant grow fruit trees in silver and gold.. the value of farmland trumps all.

Food and water have a way of doing that.

 

[Kelly.]

id say the value of a firearm trumps farmland.

if you have farmland/food and no gun, and i have no farmland/food and a gun, i now have farmland, food and a gun.

 

[tbone717]

Precious metals are an investment, and speculative to a degree. Granted they are not speculative in the way that a stock is, but there still is speculation involved (i.e. you purchase the precious metal with the hopes that the price of it will go up over time). One thing that is unique about gold & silver is that they are a constant, where the dollar is the variable. Therefore an ounce of gold today is still an ounce of gold next year, but its value in dollars may change either up or down. I own a lot of gold & silver, so I think they are a good storer of value.

Farm land on the other hand is an asset, provided you are using it as such. If you rent out the farmland and are generating income from it, then it is an asset. If you sit on it, hoping that the value of the land will go up over time then it is not an asset, but an investment like precious metals.

Personally, I would buy farm land if, and only if, my intention was to generate an income from it that would exceed any liability that I have incurred from its purchase.

 

[oyarde]

id say the value of a firearm trumps farmland.

if you have farmland/food and no gun, and i have no farmland/food and a gun, i now have farmland, food and a gun.

Oh , I think it goes without saying , each of us will have to be ready to defend what is yours.

 

[Acala]

id say the value of a firearm trumps farmland.

if you have farmland/food and no gun, and i have no farmland/food and a gun, i now have farmland, food and a gun.

Maybe. Alternatively, if someone has farmland and no gun, I might make a deal with them for my squad to provide security in exchange for some food. Then they have farmland, food, and a security force. And if you come around looking to take something that doesn't belong to you, bad things happen to you and the security force now has your gun. Co-operation beats predation.

 

[McChronagle]

Just found this from Ron Paul's The Case for Gold

"Closely related to real estate is agriculture. Speculation in real estate in the past 10 years-speculation resulting from inflation and taxation by the government- has casued the price of prime farmland to be bid up to levels higher than prevailed 10 years ago. One serious consequnce of this has been the almost total inability of new, small farmers to buy farms, and of older small farmers to retain farms. High land values, while giving many farmers paper wealth, have raised property taxes exorbitantly, and have forced more and more small farmers to sell out to larger competitors. The result has been the growth of agribusiness and euthanasia of the family farmer.

During the transition to a gold system, interest rates and land values would both fall, the former primarily because of lower inflation expectations, the latter primarily ecause there would be far less demor land as snninflation hedge. A parlelmay be found in the 19th century. From 1880 to 1890, immediately after the return to the gold standard, the number of farms in the U.S. increased by over 500,00, the number of acres on these farms by almost 90 million, farm productivity by 10 percent, and the value of farm output by over $800 million.

During this time, however, farm commodity prices were falling, an effect of the transition to gold that many fear. But wholesale prices for the goods farmers used were falling as well, faster than were prices for the goods they produced. The real income of farmers-and of all workers- was actually rising during this period, unlike, for example, the past 10 years. The transition to a sond monetary system, while it may adversely affect a few farmers and real estate holders, will enormously benefit most, and will allow more entry into farming."

 

[Dr.3D]

Watch out for the property taxes. You had better know in advance how much it is going to cost you to rent that land from the township.

 

[Acala]

Watch out for the property taxes. You had better know in advance how much it is going to cost you to rent that land from the township.

That IS a problem. In its death spasm, big government is going to tax everything it can get its hands on. But at some point, if people at large resist, it won't be able to collect.

 

[McChronagle]

"The transition to a sond monetary system, while it may adversely affect a few farmers and real estate holders, will enormously benefit most, and will allow more entry into farming."

This ^^ and the property tax issue are the biggest reasons I do not think buying now is so beneficial. Maybe a very small parcel to get myself established would be acceptable.

 

[Shane Harris]

1. Land
2. Lead
3. Silver