Wednesday, December 9, 2009

Credit Connections

This may not seem to relate directly to dairy but, if you watch the segment, what Whitney is saying is that everything is connected.

Despite being able to borrow at near-zero percent interest, banks are not taking that money and putting it back into the marketplace. The Federal Reserve said Monday that consumer lending dropped 1.7 percent on an annualized basis in October, the ninth straight monthly decline.

Certainly, most dairy farmers are not getting loans and there is talk of increased foreclosures next month.

Banks are unlikely to handout loans until they are confident prices will stabilize soon and for the long term. Essentially, the dairy farm credit problem will remain with the present pricing system in place. There are too many who have a privileged place on the status quo gravy train to allow change without effort.

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