(Brownfield Network) -- “Obviously, there is tremendous volatility in the financial markets.” The words of John Blanchfield, Senior Vice President and Director of the American Bankers Association Center for Ag and Rural Banking. The question now is how will the collapse of Bear Stearns affect the agricultural economy in the United States? For one thing, it could very well prompt investors to pull back from financial markets and move their money into more secure investments like land. The financial difficulties on Wall Street do mean an even lower dollar and higher oil prices, but he thinks the ag economy is strong enough to withstand that. Blanchfield says one of the benefits to agriculture from the collapse of Bear Stearns is the Fed cut the interest rate again on Sunday night. “The one input that is going to be significantly lower in cost than last year is interest.” He adds the banks in mid-America have plenty of liquidity and are actively competing for sound ag business. He cautions we could see a general tightening of credit which could mean that "those who regulate the banks are going to demand that credit standards be upgraded and that verification and sound underwriting become very important.”
