The newest bubble appears to be (wait for it…) real estate. Specifically, farmland:
The latest Grant’s Interest Rate Observer reports that farmers in Sioux County, Iowa bidding on a 74-acre tract forced a winning bid price of $20,000 an acre, far higher than the previous record price of $16,750 per acre set in October.
The price surge of Iowa dirt is the highest since 1977, with prices up 31% in the 3rd quarter from a year ago, and prices 7% higher from the just the previous quarter.
At the height of the housing bubble, farmland located close to major metropolitan areas was developed into suburbs. When the housing bubble popped, some of these developments were not yet finished. Now, thanks in large part to (quelle surprise) federal subsidies, there’s a strong chance that the farmland that was converted into housing developments will now be converted back into farmland. Now Lord Keynes’ ditch-digging plan can be enacted on an even grander and presumably more efficient scale!