April 24 2012 - Charts that Count

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Student loans, another shoe waiting to drop? Saskatchewan land prices continue to move up.

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April 24 2012 - Charts that Count

  1. 1. April 24, 2012Charts That CountUS Student Loans - See Any Similarities to the US Housing Market?$1 trillion (yes with a "t") and counting. US student loans are a prime candidate to be the source ofa future financial crisis with the predictable QE response, bank bail-outs and all around moneysupply shenanigans. It is estimated that $85 billion in student debt was delinquent in Q3 of2011. The use of debt to fund post-secondary education in the US has risen sharply over theyears:Total U.S. student-loan debt has reached almost $1 trillion.None of this will come as a surprise to those acquainted with the basic economic concept that you
  2. 2. get more of whatever you subsidize and typically at higher than market clearing prices. So in thesame way that artificially low interest rates and risk subsidies from Fannie Mae and Freddie Macdrove home ownership rates and prices to unsustainable levels, subsidized loans to students havelead to the rapid growth in what can only be described as the diploma mill business while at thesame time pushing the cost of such education to stratospheric levels.Saskatchewan Farmland Values Increase 21% in 2011?According to the recently released report on farmland values issued by Farm Credit Canada "In thesecond half of 2011, farmland values in Saskatchewan increased an average of 10.1%, the highestaverage increase across Canada. This followed gains of 11.6% and 2.7% in the previous tworeporting periods, continuing the decade-long trend of price increases that began in 2002. InSaskatchewan, farmland values increased by an average of 1.8% per month in 2011. The results inSaskatchewan, which has 40% of Canadas arable land, appear to mirror whats occurring in theUnited States, where double-digit increases in farmland values have been reported in several cornand soybean states.""The ongoing strength of commodity prices combined with a land market that had historicallyincreased at a slower rate than in other areas of the country are two contributing factors to thecurrent value increase. The rising values are also attributed to good seeding and harvest conditionsin most areas of the province, coupled with low interest rates."RegardsAgcapitaLegal Notice: Copyright material, please do not re-use without consent. The opinions, estimates, projectionsand other information contained herein are not intended and are not to be construed as an offer to sell, or a
  3. 3. solicitation to buy any securities, including any exempt market securities, nor shall such opinions, estimates,projections and other information be considered as investment advice or as a recommendation to enter intoany transaction. Please contact your registered investment adviser for information that is tailored to yourspecific needs.  

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