Something I've seen bandied about lately on forums and survival-related blogs is the concept that hyperinflation could actually be a good thing. The concept goes "If I get a mortgage for X bucks and then hyperinflation hits, I'll be able to pay it off quicker with dollars worth less."
What a misconception that is.
First, is your paycheck going to rise right along with hyperinflation? I would hazard to guess that your paycheck hasn't kept up with even the slow, creeping inflation of the past 10 years.
Second, don't you think the banks have ALSO heard of hyperinflation and hedged against it? Do you think that buried somewhere in the 500 pages of loan documents you signed that perhaps there isn't a clause that will let them readjust the mortgage based on new currency rates?
And finally, assuming the banks really are losing their shirts due to hyperinflation, don't you think they're going to go to Congress and demand the right to reindex your loans, JUST AS THEY DID in the Weimar Republic?
4 comments:
To support your claim I'd like to point out the bankruptcy law changes right before the housing bubble burst. It was in fact, the reason I got out of real estate and banks.
I figured that the banks and Congress were buddies, and having seen the writing on the wall they were trying to CYA. I would assume they'd do the same in a hyper inflationary environment as well.
Hyperinflation - you might be able to pay the morgtage.. but you won't be able to afford lights, A/C, heat or food...
The little things in life....
you are correct, most people think that if the government changes currency they will just bi=uy federal reserve notes and pay off their mortgage, ive seen this and heard this in coversation before..... yet 100% of all contracts are worded in "Cash Lawful money of the untied states" see 12 USC 411 and you will find that the federal reserve accounting unit denominations [fraud] are merely obligations of the united states and can be traded for "cash lawful money" but no one carries such.... lovely thought eh?
if folks are smart, they will take every available dollar they have and put into, food for a few months to get through the winter and summer til a garden replenishes their larder, buy quality garden tools and seeds for seeral years til they get used to collecting their own seed and hope others do the same to keep seed stock viable..... and then buy the means to protect what they have that others might want to take from them, after that any cash left over needs to go into silver or other precious metal to use for trading in the future, or mining equipment like i offer at www.diggitprospecting.com to learn to recover gold from nature and be able to care for their own financial needs down the road [gold is in more places than just the western states]
hyperinflation is killing us without firing a shot, and going into the winter it is not looking good once again for most of us.
Blue Duck is
William
Idaho
I've seen this same myth discussed at HT... Calms the sheeple to think they can walk away from their troubles...
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