readease Chapter 138 The Value of Land
Chapter 138 The Value of Land
Chapter 138 The Value of Land
The afternoon sun shone a golden light on the fields on both sides of the road, and the dust that rose up tumbled in the beams of light.
Paul Arlington leaned against Ernst's car door, his fingertips unconsciously rubbing the sweat stains on the edge of his cowboy hat. Beside him, Diego Arlington crossed his arms, the cuffs of his khaki shirt billowing in the wind, revealing the tanned skin on his forearms.
Neither of them seemed inclined to get into the car. After exchanging a glance, Diego asked uncertainly, "Ernst, you're not really planning to buy the Red River Valley Farm, are you?"
His brows furrowed into a deep frown as he looked at his cousin, whose fame had spread throughout the United States.
At that moment, Ernst was gazing at a herd of cattle in the distance. Hundreds of Angus cattle lay lazily on the grass, their tails unconsciously shooing away the flies around them.
There are many cattle farms in California, but this is the first time I've seen one with over a hundred cattle.
Paul seemed to sense Ernst's curiosity and said, "Cummins is a master at raising cattle; his cattle are not available at market prices."
"I understand," Ernst suddenly realized.
The beef prices listed on the exchange refer to regular beef, but there are also special types.
For example, if Cummins can raise beef to a beautiful, marbled appearance, then high-end restaurants will naturally come and buy it directly.
No wonder they occupy such good land, yet they choose to raise cattle.
What Ernst couldn't understand was why he didn't sell the land and buy a larger piece of land in Montana.
Anyway, when it comes to raising cattle, where you raise them shouldn't matter much, right?
As if by telepathy, Paul spoke again, "This is the Cummins family's ancestral farm, where generations of their ancestors are buried."
Ernst was about to speak when Diego cut him off, saying, "Can you answer my question first?"
Turning to Ernst, Diego asked again, "Ernst, are you really going to buy Red River Valley Farm?"
“That’s over ten thousand acres of land.” Diego’s voice rose slightly involuntarily, his Adam’s apple bobbing in his dry throat. “In a place like California, this farm would cost at least thirty million dollars.”
Before he could finish speaking, he suddenly shut his mouth as if he had been burned by his own words.
His gaze swept over the understated yet valuable Patek Philippe watch on Ernst's wrist, and then, remembering the renowned companies under Ernst's name in America, he swallowed back the words of advice that were on the tip of his tongue.
This cousin's current net worth and status are quite different from theirs. For the Arlington family, who make a living from land, thirty million dollars is an astronomical sum that would take several generations to accumulate.
But for Ernst, such a number might be like a price tag on a supermarket shelf; he might not even blink when he pulls it out.
"Old Carl's terms are hardly generous," Diego said, trying to offer a different perspective.
"Not only are the asking prices inflated, but you'll also have to pour a huge amount of money into it after you buy it. That place is almost completely barren now; everything that could be sold has already been demolished."
A gentle breeze carrying hay brushed past his ears, and Diego's thoughts drifted back to the scene he had witnessed when he went to the Red River Valley Farm to buy a tractor.
The tractor warehouse was now empty except for dried oil stains. A few bundles of moldy hemp rope were piled in the corner. The shed where the seeder should have been parked was deserted, and a few rusty bolts were scattered on the ground.
Even the grain storage tanks were dismantled down to just the steel frame, exposing the inner walls covered with cobwebs.
Old Carl converted almost all of his possessions into cash to pay off his bank loans that were due soon.
This is very common in the United States. Apart from some land families that have been living off the land for centuries and have spent their entire lives working the land, no one would buy land outright. This is also the American way of doing business.
Just like cowboys in Western movies always buy saddles on credit, ranchers are also used to using bank money to leverage their land.
The Red River Valley Farm has expanded to its current size as a result of decades of acquisitions by old Carl.
They repeatedly used existing land as collateral to borrow more money from banks, and then used that money to acquire neighboring small plots of land.
This snowballing approach allowed the farm to expand year by year, but it also sowed the seeds of a fatal hidden danger.
So when those fraudulent companies tamper with pesticides and seeds, even if there is no harvest this year, it won't necessarily drive a veteran farmer to the brink of bankruptcy and forced him to sell his land.
What truly broke the camel's back was the bank's maturing debt.
Those fraudulent companies have long since figured out the farmers' weaknesses, and it is by exploiting these weaknesses that they have been able to successfully acquire land time and time again.
They first use substandard agricultural inputs to reduce crop yields to the point of near-total crop failure, and then their accomplices will arrive at the bank precisely when it's time to repay the loan.
When farmers are overwhelmed by debt collection calls, these people swarm them like vultures, using money to harvest their land.
The bank doesn't care if you've been scammed; if you can't repay the loan by the due date, they'll take away the mortgaged land.
Farmers had no choice but to sell their belongings to raise funds. But without farm machinery and tools, it was like a soldier without a gun; they could no longer operate the farm, so selling it became the only way out.
If they're lucky, after selling the farm and paying off their bank debts, they'll still have some money left over, enough to buy another farm elsewhere.
Those who are unlucky will lose everything and become tools of capitalist exploitation, working for them.
If Ernst wants to take over Red River Valley Farm, he not only needs to buy the land, but also needs to acquire a whole host of machinery and equipment.
Large combine harvesters, fixed-wing aircraft for spraying pesticides, tillage machines capable of plowing to a depth of three meters, tractors,
Various farm tools, grain warehouses, temperature-controlled cold storage for fruits and vegetables, etc., these are not a small number.
The most crucial question is, we already have one at home, so why buy a Red River Valley farm?
In their generation, the Arlington family had only one son per family, and Whitney Farm would later belong to Ernst.
In Diego Arlington's view, tech upstarts like Ernst will definitely live in penthouses on New York's Upper East Side or luxury homes with rooftop pools in Beverly Hills in the future.
The farm is just a place to spend the weekend occasionally, fishing and grilling steaks; one Whitney Farm is more than enough.
Ernst understood Diego's meaning, but he had his own ideas.
Land is a very stable asset that can continuously maintain and increase its value. The stock market can crash, real estate prices can fall or become unfinished, and derivatives are always susceptible to black swan events.
But land is different; land is the most fundamental of all assets.
Without land, there would be no business system based on those economic models.
Moreover, according to American policy, once the land is purchased, ownership of the land, whether in the sky, on the ground, or underground, belongs to the buyer.
Not only the grains and vegetables you grow, but also the water and mineral resources are yours.
How did Rockefeller become so wealthy? He simply discovered oil in a barren land and took off to become the richest man in the world.
Having a large amount of land means you can rent it out even if you don't manage it yourself.
A large portion of farms in the United States are not actually owned by the farmers, but leased.
Farm owners take the lion's share of the profits, while the farmers are no different from white-collar workers in the city, exploited by capitalists.
Moreover, many people don't know that land investment value in the United States is the most stable and highest, with an annual return on investment exceeding 10%.
Gold is often touted as a stable safe haven, but if you look at it over a longer period, its annual growth rate is no more than 6%.
Even the Standard & Poor's returns are only around 7% per year. If an economic crisis hits, you could lose everything in one fell swoop.
But land is different; it almost never depreciates. And if bridges or roads are built, it's even worse—it's no different than having a demolition sign written on your wall and a circle drawn around it.
Furthermore, consider the hidden value: why are America's super-rich still so keen on buying land twenty years later? Bill Gates, Bezos, and others are all major landowners in America.
These super-rich individuals are buying land in an attempt to align themselves with American policies.
The United States is a major food exporter, and these wealthy individuals own vast amounts of land, which indirectly means they control a portion of the world's food supply.
Twenty years later, the dollar hegemony is in jeopardy. It can also be said that the development of new energy sources has led to the collapse of the petrodollar hegemony. Therefore, the United States no longer cares about maintaining the Middle East, but instead focuses on building its own food dollar hegemony.
Since 2020, a common feature of trade negotiations in the United States has been that they have been tied to the United States' livestock and agricultural exports.
With global food consumption increasing, and only a handful of countries able to export large quantities of food, wealthy Americans are acquiring land around the world in preparation for dollar hegemony over food.
Acquire wealth through commerce and safeguard it through land; nurturing wealth through land is precisely the way to transition from new money to old money.
Bill Gates owns 270,000 acres of land, an area equivalent to Hong Kong Island, but compared to those hidden old American money families, his land holdings don't even rank in the top 30.
Regarding agricultural subsidies, many people analyze that the United States is trying to stabilize its food hegemony.
But going deeper, it is indeed the old money who are legally and legitimately dividing up America's wealth.
Take Bill Gates for example. He receives two to three hundred million dollars in agricultural subsidies a year for his land, but he only spent a little over a billion dollars to buy so much land.
This also reflects how expensive land is in California now. A farm in the Red River Valley with tens of thousands of acres costs more than 30 million US dollars, which is more than 3000 US dollars per acre.
Currently, the average land price in the United States is only a little over $1100 per acre, and in places like Montana, some land prices are less than $800 per acre.
However, Ernst certainly couldn't tell the two of them this, so he could only say willfully, "But I still want to buy it."
Seeing Ernst's insistence, Paul Arlington and Diego Arlington exchanged a glance. Paul then removed the grass root from his mouth and said, "Old Carl is as cunning as a fox. If you try to negotiate directly, you'll definitely get ripped off."
"Why don't we go back first and then let John handle it? He knows the area in Tulley County, knows old Carl, and can build a relationship with him. He knows where to negotiate a lower price."
Ernst thought about it and realized he was right. After all, whether in terms of professional expertise or influence in Tuleli County, his maternal grandfather was definitely much better than him.
It saves you money and hassle, so why not?
"I'll listen to you and go home first."
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