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<center>![Reflections from a Farm Part 2.jpg](https://files.peakd.com/file/peakd-hive/bengy/EqhPHa97itZRfZVkwyjQDumeYDcXp92kwa9b5cVMo19u2Xt7D13Gp9zQygcRcSGAeVb.jpg)</center>

Running a farm seems to take a lot of capital to start up, to invest in equipment, land, crops, livestock... it seems to be an endless array of things that need to be paid for upfront, and then paid off over time. Well, it just seems to be exactly like the regular society but on a much larger scale... and to be honest, that sort of thing just scares the hell out of me. Debt is a useful tool... but I'm still quite averse to it. My wife had to do some pretty hefty convincing for me to even take a zero-interest loan to do some green upgrades... I'm still wondering if here is catch or not, especially in this climate of high inflation. To me, the high inflation along with zero interest just sounds wrong... and I'm wondering if there is a link of the loan to inflation, but if there is, it just isn't that clear or upfront on the website or loan papers. 

I do worry that our family member has taken on a great amount of debt... but on the other hand, they have at least one pretty stable and well-paying job, so they can service the loan. And there is also the collateral of the land which is partially paid off. Still, they have some pretty hefty long-term plans that will need funding, including a new house build and some more equipment that needs to be bought. 

I guess in some ways, it is worth it... they are living a life that they had dreamed of, working on the land, whilst being close enough to a regional town centre to have the mix of worlds. Honestly, the entire thing is not my cup of tea... I can see the appeal, and whilst visiting on holiday, it does seem quite romantic. But ultimately, it is a crazily hard amount of work... with that ever present debt/income flow sword hanging over your head. I'm sure that they have more than enough buffer to get through several bad seasons, and it isn't the only income flow... so, they probably aren't as leveraged as I worry that they are. 

... but the thought is there. A series of unfortunate events could send them into financial ruin. 

And that is pretty much par of the course for many of the Western, democratic societies. Debt is a common enough thing that most people play with it, society expects it, and the entire economic system requires it. Nothing too wrong with that... but financial literacy isn't as widespread as one might hope, and debt... like any good tool, as beneficial sides, as well as a dangerous aspect. Sadly, I do wonder if many people see only the beneficial side... in that they want something, right now... and bugger the consequences of dealing with the debt servicing sometime down the track. A problem for future self... 

I was reading this pretty horrific article recently about some large company in the United States... loaning out to people who weren't really capable of realising (due to a combination of dodgy sales practices and lack of financial literacy) that they were essentially paying the equivalent of triple digit interest... and only being able to service the interest on their loans. Thus creating a ongoing solid revenue stream of the loan company, as the customers would be forever paying off their loan because they wouldn't ever even start eating into the actual loan principal! Ouch... and somehow that was not illegal. Crazily immoral, and hopefully not an aspect of American capitalism that we will ever import (although, the more that we reduce regulation, oversight, and critically enforcement... the closer we get to that...). 

Anyway... debt... I was always brought up in a culture of abhorring debt. Or at least treating it like the dangerous risk instrument that it is. My wife was brought up differently (not terribly so, but with less of an instinctive reflex to the concept!)... I was always immediately paying off the credit card... the instant that I spent money on it! 

Anyway... with all the terrible economic news that seems to be on the horizon (over-leveraged house loans in particular... well, in combination with job losses/recession... but even all the Buy Now Pay Later companies that seem to have infected Australia) , I do wonder if there is going to be a wave of terrible news. Hopefully not, but in some ways... maybe it is necessary, so that we can have a better understanding and proper treatment of debt as a society. Or is it too painful? And as a society we should step in and save everyone... regardless of the moral hazard?


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