An Urban's Rural View

Migration ended: 3,334 miles in 10 days -- six days of driving plus multi-day stops in Omaha and Lee's Summit, Mo. Alas, we arrived in Washington, D.C., too late for the shutdown fun. For better or worse, the wheels of government are slowly but surely turning again.

One sign of the revival: The Labor Department issued the October jobs and joblessness report a mere 16 days behind schedule. The delay didn't make the news any more palatable: Only 148,000 new jobs were created in October. Even the 180,000 analysts had expected would not have been considered robust.

The stock market, however, welcomed the report. We seem to be in one of those periods when bad news is a buy signal. Bad news means the Federal Reserve will keep buying $80 billion a month worth of bonds to stimulate the economy.

Good news would encourage the Fed to start the process of "tapering" its bond purchases. The market seems to think that once the tapering begins it won't be long before the Fed starts raising interest rates.

Why the market thinks that is a puzzlement. Fed Chairman Ben Bernanke has gone out of his way to emphasize that whenever the taper comes, interest rates will remain low through 2015, maybe 2016. Janet Yellen, President Barack Obama's nominee to succeed Bernanke when his term runs out in January, is if anything more committed to an accommodative monetary policy. It will, I think, take a ton of good news to push her to raise rates.

If the market is right -- and look, I know what you're thinking, but the market isn't always wrong -- business people who need to borrow heavily, including farmers, should brace themselves. Money's about to get more expensive. If on the other hand I'm right, agriculture will enjoy another couple of years of relatively easy credit terms.

Wouldn't it be interesting to hear how a Fed insider views the world? You can. Richard Fisher, the outspoken and highly respected president of the Dallas Federal Reserve, will speak at our Ag Summit on December 9 in Chicago. For a peek at the agenda and details of how to sign up, go to http://tiny.cc/….

Urban Lehner

urbanity@hotmail.com

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