Viewer Comment #1: It sounded like John Phipps was saying debt is good, and farmers do not need to worry about our national debt. He proved this with a whole board of charts and graphs, saying in summary that government is different from farm families. Yes, the people's government acts differently. Government never has to pay off its "credit card" debt, as farm families do. Government just raises the debt limit, which doesn't pay off anything. The last time we heard debt was good was in the 1970's, when farmers were encouraged to borrow against their land. In the 1980's, land values dropped and many farmers lost their farms. It was a very ugly time for farmers. The only thing John's charts and graphs proved is that he has forgotten the 1970's and 1980's. Debt is not good, not even for the people's government. We do need to worry.
#2: John, in his analysis of the US debt made several glaring errors:
a. He stated we did not have to worry because the bonds were long term and could not be redeemed early. The fact is that virtually all the long term bonds sit in the vault of the Federal Reserve due to operation twist and QE 1, 2, and 3. Countries like China and Japan hold 30 day through one year short term bonds which they roll over. To drive interest rates through the roof all they have to do is not roll them over at which point the auction would have hundreds of billions of short term bonds for sale and no buyers.
b. The fact that the Federal Reserve holds over 3 trillion in long term bonds leaves the danger of them becoming virtually worthless in the event of an interest rate spike making the Federal Reserve insolvent.
c. Governments can simply print money. Not true! That eventually sets off hyper-inflation. We are already seeing massive true inflation running 10% according to the Census figures. See the Weidar Republic, USSR, Brazil, Yugoslavia, Argentina, etc.
d. It’s not just Medicare! It’s Social Security, Medicaid, Food Stamps, Obama Care, and many other UNFUNDED liabilities that are mandatory spending totaling well over 80 trillion dollars.
It is like John running his farm accounting without any provision for replacing equipment that he knows he will have to buy. Just hoping by some miracle the money will magically appear. Soon there will be 1 retired person for every 4 working people and that tax burden will be unbearable, especially with median incomes falling and real unemployment at 20%. The debt should be John's #1 worry! John Geis
#3: I am afraid to say we don’t see eye to eye on the National Debt. The debt only remains manageable because of low interest rates. And like wise our economy continues to grows only because of low interest rates. The only thing saving the car industry and the housing industry is low interest. The only thing saving our export business is a cheap dollar. As inflation works higher the noose will tighten.
People speak of the Great Recession of 2008 as being over, but the second shoe may not have dropped yet. Mark Len
#4: I saw the excellent national debt issue by John Phipps this past weekend. Is it possible to get that article in a download? It is what every person that talks about national debt needs to realize. I watch the show every weekend and daily. Kenneth Gorney
***You can watch his commentary here: http://www.agweb.com/blog/US_Farm_Report_Mailbag_198/national_debt_part_2/
#5: Hi John, I am a city girl, born and raised in Iowa. So of course I fell in love with a farmer.
I watch US Farm Report every Saturday so I will know what my farmer is talking about.
I love your section. This week you showed us your wonderful workshop. I have been trying to find a wood worker to help me build a Little Free Library so I thought you might like to know about the Free Library movement. Here is their web site: http://littlefreelibrary.org/. If you decide to build a Little Free Library, I would love to see it on the show. Denise Liddle
P.S. I live near Fairbank, IA and look forward to seeing your tractor rebuilt.
#6: I have been looking for a greenhouse for my wife and the one John built for Jan looks perfect. Where did you find it? Thanks – Kenny Krall
***John’s Answer: “ We got ours here. There are a zillion choices and the sales guy really helped us. BTW, this is what we got.”
#7: Slowing farm equipment sales indicate slowing farm profit margins, but you know they’re linked much closer, as those designs have increased harvest volumes and cut labor costs. While waiting for matching thoroughness and efficiency in world food deliveries to catch up, flattening profits will require new revenue types, in order to win. Depression-era crop production limits may have once sustained prices, it defeats that global feeding effort, though they kept our farmers alive and in the business. Still, I'm guessing that some things may change the farming outlook. GMO insect and disease-resistant crops may eventually win at staying in jump ahead of the mutations of plant diseases and the evolution of opportunistic bugs. To that end, the 5 billion-pound pesticide business will suffer, but insect mass will still outweigh that of humans by 300 to one. That fine machinery may well have to evolve to a kind that can separate-out salable insect protein for fortified feeds that are more productive. Chaff and husks may follow a bio-fuel waste stream, and cartridge-insert shipping containers may follow combines in collection. Then like the grains, they may be dried and shipped to market without ever unloading. Innovation in byproduct sales may be linked once again to success in equipment engineering, and again to machinery sales. And there, to a profit for both. But, can we please build them here? You have the fastest hour on television! -Gregory Clifford, St. Francis, MN
PS- If demand for dollar-backed securities falls, from lowering returns, dollars can be put on the open market and would become more abundant, as they would be perhaps purchasing, say, mineral and energy futures worldwide, and in competition to us. Those may favor our exports paid in dollars, though not our savings, funding, or foreign purchasing power, right?
#8: Tyne, John, Mike and Al, I’m sure you all realize you are providing news, information and ideas that cannot be found anywhere else in media. I wonder if you know that it is appreciated. It really is. I’m always surprised at how you fit so much into a single hour, and do it in such a well-arranged and pleasant way. Thank you for the work you do and the thought you put into it. Thanks for the tour of your terrific woodshop, too, John. Joe Carlson - Issaquah, WA