This past week I was in Sturgis, South Dakota with all the bikers and a few bankers. (Barbzilla’s husband, with his Softail Deuce, would have loved it!) About 350,000 people descended on the Black Hills area for the Sturgis Rally, but that number is down from previous years. Yet another indication of the softening national economy.
New Global Meltdown
In 1997, it was the Asian meltdown that created economic turmoil worldwide. At that time the US economy was strong. And with all the Greenspan magic, we were able to avert a global recession.
This time, the economic turbulence could come from South America and other emerging countries. The problem is that the US economy is in a grown recession, headed for a possible full-blown recession. Mr. Greenspan’s options are few. Also, our major trading partners like Mexico, Canada, Japan, and Germany could take a direct hit. The recent economic uncertainty in Argentina along with the political uncertainty in Brazil will be interesting to watch in the next few months.
Just Plain Ugly
Many bankers are confirming to me that customers, both farm and non-farm, are asking for advances on their refund checks. The average American has 17 days liquidity compared to 28 days in 1990 and 45 days in 1980. We are truly living from paycheck to paycheck.
Sports entities are starting to realize that paying superstars big bucks doesn’t pay off. Have team owners, like farmers, thought about diversification as a risk mitigation tool?
See you next week from Blacksburg and get ready for the fall football in-season picks. The Hokies new football field has been moved into the stadium. And it looks great. We asked the engineer if we could control the turf climate at the other end of the field and he said yes, of course! But what happens when you switch sides at the quarter?!
It looks like another bad season of tornadoes. Remember that green is not a normal color for the sky. Go underground if possible!
My e-mail address is:[email protected]
Editors' note: Dave Kohl, Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He currently is on sabbatical and working with the Royal Bank of Canada.
To see Dave Kohl's previous road warrior adventures click here
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