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Welcome to the "Wolf Creek Pass" School of Monetary Policy

I don’t know if you folks remember that hit ditty: a humorous tune about two truckers attempting to manhandle an out-of-control 1948 Peterbilt down the “other side” of Wolf Creek Pass – a death-taunting section of U.S. Highway 160 where the elevation drops a hefty 5,000 feet in a relatively short distance.

The song’s two characters – a truck driver named Earl and his brother, who’s his partner as well as the song’s narrator – are taking a flatbed load of chickens on a speedy trip down this winding, two-lane Colorado highway. After the narrator gives Earl the above-mentioned warning, the ancient semi’s brakes fail.

From there on down, the narrator tells us that the brothers’ trip “just wasn’t real pretty.” The truck careened around hairpins and switchbacks, and then raced at an uncontrolled 110 mph toward a tunnel with “clearance to the 12-foot line” – with chicken crates sadly “stacked to 13-9.”

The drivers and the runaway Peterbilt “went down and around and around and down ’til we run outta ground at the edge of town… and bashed into the side of the feed store – in downtown Pagosa Springs.”

Believe it or not, I started thinking about this funny old country tune the other night – right after I’d read a piece about QE3 and the U.S. Federal Reserve.

As zany as it first sounds, the parallels are striking.

  • Featured Story

    Investing in Farmland: Is a Bubble Brewing?

    Food corn

    It's little wonder that yield-starved pension funds and other investors are investing in farmland.

    That's because farmland, a hard asset, produces high returns and, unlike other hard assets such as precious metals, provides investors annual income from crop sales.

    The National Council of Real Estate Investment Fiduciaries (NCREIF) compiles data on the total returns (income and capital gains) on farmland purchased for investment purchases, primarily by pension funds looking for income and diversification.

    In 2012, the annualized total return on investment farmland was 18.58%.

    The NCREIF has data going back to 1992. Since then, the highest annualized total return was 33.90% in 2005 while the lowest annualized total return was 2.02% in 2001. Over the 20-year period from 1992 to 2012, the average annual total return was 11.83%.

    And sharply higher prices for major agricultural commodities such as corn, wheat and soybeans have increased annual investment income for anyone investing in farmland.

    Legendary hedge fund manager Jim Rogers has been buying farmland in Australia for a private fund.

    "It's the farmers, the producers, who are going to be in the captain's seat when the prices go through the roof," he told The Australian Financial Review back in 2011.

    "The world has got a serious food problem," Rogers told Time magazine. "The only real way to solve it is to draw more people back to agriculture."

    But is this rush toward investing in farmland now creating a huge bubble?

    To continue reading, please click here...


    Read More...
  • best way to invest in farmland

  • Why Jim Rogers is Investing in Farmland Legendary Wall Street trader and best-selling author Jim Rogers recently offered this unconventional advice: If you want to get rich, you should be investing in farmland.

    Don't laugh. Rogers is good at what he does. Really good.

    Together with George Soros, he founded the Quantum Fund in the 1970s and posted returns of 4,200% over 10 years. Rogers retired in 1980 at the age of 37, but is still active as a private investor.

    Back in 1999, Jim Rogers recommended gold when it was trading at $252 and silver at $4. You know what happened after that.

    Now Rogers thinks investing in farmland will pay off in a big way.

    "It's the farmers, the producers, who are going to be in the captain's seat when the prices go through the roof," he told The Australian Financial Review.

    To continue reading, please click here... Read More...