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0906 PD: Infinite Time

Baxter Black Published on 20 September 2006

Infinite Time: The way I’ve been able to absorb the concept of ‘No beginning and no end’ is that time must be like a rolling ball. Of course, in my mind, time recycles itself over a long period. Thus, my surprise when I read about the natural gas boom in Pinedale, Wyoming, and the record high price of farmland in Iowa.

Take yourself back about 25 years. In the early 1980s, the population of Casper, Wyoming, was nearly 80,000. Commuter airlines into Wyoming were full of engineers and roughnecks from Houston. Real estate agents were giddy. The city had discontinued its traditional Ranch City banquet; all eyes were on the oil.

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Meanwhile in Iowa, farmland was increasing in value proportionate to the 14 percent inflation rate that was roaring through the country. The price of cattle, corn and soybeans remained at subsistence levels, but banks were lending money using the inflated land values as collateral. Farmers were buying more land and more machinery; ag lenders felt like Santa Claus.

Between 1980 and 1985, the government stopped the runaway inflation. It went from 14 percent in 1980 to two percent in 1984. By 1990, the population of Casper had fallen to 61,000. The oil boom busted. Real estate agents couldn’t give away a house. The city fathers cast about for new business and remembered the local ranching community that had been sitting there all the time like wallflowers at this oil dance. That year they reinstituted the Ranch City banquet to show their appreciation of the agricultural customers. I know – I was there in 1988.

The Federal Land Bank and PCA lending institutions began tumbling like marble pillars in the economic earthquake that hit agriculture. Land value in Iowa dropped precipitously. Those farmers who had borrowed heavily against their inflated farmland were foreclosed on and wiped out. Willie Nelson started Farm Aid.

The psychological, economic and social ramifications continued like aftershocks through families, businesses, banks, churches, small towns and state and federal agencies for years afterwards.

Ah, but we’re booming again! Could it be we’re going to be a little smarter this time? There might be enough bankers and mayors and farmers and implement dealers that still remember and will exercise caution. But it’s the governors and real estate agents who are wild cards that I worry about. Their ball of infinite time bounces instead of rolls. PD

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