[Homestead] Wall Street

Clansgian at wmconnect.com Clansgian at wmconnect.com
Mon Sep 15 17:53:42 EDT 2008



> >I am completely ignorant of high finances: how will this affect people 
> not buying or selling a house, who have no money in the stock market and 
> very little in the bank?

Probably not much.  But, depending on how things fall out, it could usher in  
either a time of sharp inflation, a time of deflation, or the old 70's 
boondoggle stagflation.

All that financing mucking about is the way so many (too many) businesses 
operate.  For example, a neighbor of mine is a logger.  When there is a stand of 
timber for sale, he goes to the bank and gets a 90 day loan to buy it, meet 
his payroll (mostly Mexicans), and pay the expenses of his equipment.  
Apparently no one in that business uses their own money for those ventures and perhaps 
this is because he has to borrow over $100K at a time to work a stand.

When loans get tight, which is happening as capital disappears, and he cannot 
pull off his usual routine, his workers are unemployed, the owners of the 
timber don't make a profit and don't have money to invest, he does not patronize 
the heavy equipment outfits.  Our present way of doing business is so credit 
dependent that this can domino with business after business not able to go 
about their routine commerce because they can't get loans.

We more frugal people think of a loan as something we would get to finance 
what we could not do without until we saved up that much money.  We would look 
at it as paying off that loan and bidding it good ridance forever.  But not so 
with most business enterprises and too many individuals.  Credit and loans are 
a continuous way of life.

While the Wall Street goings on will not affect your farm and farmlife, some 
commodities my become very expensive or scarce.  Some things you sell to 
support your operation (produce, labor (job), cottage industries) could become 
difficult to sell.   </HTML>



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