is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

  • American Agriculturist
  • Beef Producer
  • Corn and Soybean Digest
  • Dakota Farmer
  • Delta Farm Press
  • Farm Futures
  • Farm Industry news
  • Indiana Prairie Farmer
  • Kansas Farmer
  • Michigan Farmer
  • Missouri Ruralist
  • Nebraska Farmer
  • Ohio Farmer
  • Prairie Farmer
  • Southeast Farm Press
  • Southwest Farm Press
  • The Farmer
  • Wallaces Farmer
  • Western Farm Press
  • Western Farmer Stockman
  • Wisconsin Agriculturist
Corn+Soybean Digest

The Road Warrior Of Agriculture

Around The World In Thirty Minutes

During my recent Road Warrior travels I was asked to give a sound bite version of the state of the economy here in North America and around the world. Here are some points and perspectives:

Imbalances
Tremendous imbalances of earnings, wealth and debt throughout the globe are being led by the U.S. The U.S. consumer and government are into deficit spending. If not brought under control it will increase attention of the international financial markets. This could create downward pressure on the U.S. dollar and a rise in interest rates here and with major trading partners such as Canada.

Monetary Policy Tightening Or Growth
Inflating pressure is building in the U.S. despite the government statistics. If these pressures intensify, will the Fed stop at 4.75 percent? Not likely. The short term Fed rates could go to 5.0 or 5.5 percent. The Euro zone is mired in slow growth with high deficits well above the 3 percent deficit maximum mandated and deficit totals 60 percent of GDP.

Oil
The price of oil is not far from a record high. Demand and supplies will be tight and weather or a terrorist event would trigger high energy prices which would weigh heavily on consumer spending.

Housing Market
The number of unsold houses is rising; however, they are below the levels in the housing crashes of the 1980s and 1990s. Don’t be surprised if the U.S. goes from a seller’s to a buyer’s market in the eight primary housing bubble areas of the country, which, when put together, would be between the fourth and fifth largest economy in the world.

China
China will experience growing pains because of disparity of wealth and unsustainable economic expectations of its populous. A banking system is a train wreck waiting to happen if certain conditions arise, which could cause social disorder.

My e-mail address is:sullylab@vt.edu

Editors' note: Dave Kohl, The Corn and Soybean Digest Trends Editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups.

To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.

This online exclusive is brought to you by The Corn and Soybean Digest

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish