My share of the fallout...

Agriculture will not go unscathed in financial crisis, although my investigations lead me to suspect the consequences are not immediately obvious.  After reading reams of stuff about what the heck is going on in Washington and New York, maybe these links and guesses will help.

Some possible results of this debacle:

• Kiss an estate tax repeal goodbye.   In his superb explanation of what is happening and why Jim Manzi points out tax revenues are going to be desperately needed by the government to fund the amazing amounts of new debt.

Time will tell, but likely medium-term implications include higher government interest payments, worse deficits and higher taxes. This certainly reduces the probability of making the Bush tax cuts permanent in a couple of years, no matter who is in the White House. [More of the best summary of the situation I have read to date]

• Oddly, I look for land prices to continue to march upward, driven by comparative safety and predictability.  Admittedly, the actions on the food-fuel battleground will have considerable effect, but considering all the places investors don't want to park money, farmland still looks pretty good.  Additionally, it seems commerical real estate may be attracting more sovereign wealth fund (SWF) money, and some spillover effect into farm real eastate should not be discounted.

Sovereign wealth funds may increase investment in commercial properties to a net $725 billion by 2015 as they diversify their holdings from stocks and bonds, according to CB Richard Ellis Group Inc.

The funds will probably raise the proportion of money they invest in real estate to 7 percent from 4 percent in the next seven years, the world's largest commercial-property broker said in a report published today. Abu Dhabi, Norway, Saudi Arabia, Singapore and China have the largest funds, CB Richard Ellis said.  [More]

• Widespread screening for wealth.  It has not gone unnoticed that the bad guys in this meltdown have also been ultra-rich.  I can foresee the use of means tests for entitlements becoming far more common and limiting.  One entitlement that will likely be re-targeted for actual reform is farm payments.  Another will be Medicare and Social Security, I suspect.
• The consolidation of small banks. The action to bring investment banks under closer federal regulation and convert them to deposit-based lenders will explode the demand for deposit-rich bank corporations to the point owners will be hard-pressed to say no.
• A trillion-dollar deficit.  I think we can do this folks.  Combine massive bailout borrowing with lower tax receipts from investment bankers for one example and we could see our first 12-zero annual shortfall which might bring about...
• A new low for the dollar.  Borrowing of this scale tends to debase a currency, and it might be enough to spook wary currency traders to pull out of greenbacks until some turnaround is in sight.
• No end to commodity volatility.  So look for a few big winners and many small losers as producers try to avoid risk and a few bet the farm.

Commodities have been slammed in the last two months due to the dollar rally. But we are now nearing a time of hyperinflation when the Feds paper over any and all problems with reckless abandon. As the market comes to realize this, commodities and other inflationary hedges will begin their bull market anew. [More]

We'll know more soon.  And we probably won't foresee many of the strange blowbacks from this historic (and perhaps histrionic) action until we are looking backwards.

Like I keep saying.  Make some notes to tell your grandchildren.