In September 1998 the CommStock Report aired a special report titled, Tale of Two Economies, just as the current bull market in commodities began lift off.

When the ag depression bottomed in 1985, many farmers gave up and became truck drivers for a steady income.

The producing economy plunged to the depth of the cycle trough, devastating equity and wealth of the ag sector.

At the time, I knew that someday that it would be as good in agriculture as it was bad then, but couldn’t really believe it then.

If you had told farmers in 1985 that in 2012 per acre profits would equal 1985 per acre gross revenue, corn would be selling for $7.50/bushel, $10,000/acre farmland would be a bargain and that these prices were not leveraged with debt, they would have scoffed at you with a hint of contempt.

U.S. consumers did not know how good they had it in the 1980-90’s. Food, fuel and fiber was all selling below the cost of production and the global economy had not yet taken off with its growth spurt, so foreign consumers were not the competition for oil, base metals and grain that they are today.

In 1985, the producing economy was at the bottom of the tank and the consuming economy was floating at the top of the wave, riding high. Today, these trends have certainly reversed.

The consuming economy is attempting to sustain a recovery from its great recession while the producing economy is the one riding the tip of the wave.

Interest rates for farm loans topped 18 percent at the bottom of the ag depression. They almost pay banks to keep money today, creating a flood of cash being parked in farmland. Are we there yet?

A Romney voter said that he feared further weakness in the dollar if Obama was given a second term. He is probably right. He is a consumer.

Commodity producers would have a different opinion of what the value of the dollar should be. If Romney had been elected it would likely have signaled a shift toward tighter fiscal and monetary policy.

Remember that the price of corn and the dollar trade inversely to one another. Strength in the dollar is bearish for commodity prices. Weakness in the dollar was a big factor to the bull market in commodities.

Traders did not forget that last week as the dollar jumped to new short term highs as gold plunged. The corn market softened to test support.

The soaring dollar and record-high interest rates buried the ag economy in the 1985 farm depression. It was Paul Volker more than Reagan that drove the dollar to its heights then. Romney vowed to go back to tighter money replacing the Fed board as terms expire with fiscal hawks that will shut off quantitative easing.

In other words, there was potential for a major trend change in the factors supporting the bull market in the Ag and commodity sector. Consumers may see that as a good thing, but the guy that paid over $20,000 per acre for the farm in Iowa recently would regret it. The Fed believes that its fiscal policy is working and that a full economic recovery is still in the cards.

The Great Depression was not recovered from in 4 years, and it was absurd to believe that there is something wrong with the timeline of this recovery from the Great Recession. The recovery fits the recession.

The wrong moves in the global economy can abort the recovery and still give us that wave C decline the Elliot Wave theorists believe likely via wrong moves like labelling China as a currency manipulator, draconian budget cuts and reversing QE.

The technicians don’t think that it matters who is elected. The election could determine whether the bull market trend in commodities prolongs or not.

The consuming economy is far larger than the producing economy, but the latter is the foundation of wealth without which the consuming economy would fail. The difference is evident in perception of the weather.

To tell whether you are a member of the consuming economy or producing economy ask yourself what you call a rainy day in August. Members of the consuming economy think it’s a disappointment, while the producing economy think it’s beautiful. These two economic entities are at odds with one another. They are constantly at war in the marketplace.

The extreme of euphoria of 1980 in the producing economy had produced an extreme of despair in the consuming economy. Those with fixed incomes were devastated by inflation, sharply rising commodity values took more consumer and corporate dollars to purchase basic needs, cutting into economic growth as the cost of living rose and corporate profits stagnated.

The extremes of 1980 were brought to an end by the Federal Reserve Board which, under Chairman Paul Volker, instituted a deflationary monetary policy.

Are we to the point where the trends reverse and the producing economy topples while the consuming economy sustains a real recovery? I think that it’s safe to say that the ag sector is nearing terminal velocity as the Tale of Two Economies continues to unfold.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.