# What about debt, is is good or bad?



## Montana Rancher

I'm vexed by debt in a SHTF scenario

1. If you owe people money and the system collapses, then who cares? Where will you send the payment to?, does money even exist?, even if you have the money will anyone be there to accept it?

2. So I have made a commitment to pay my bills, if nobody is there to collect them am I off the hook?

3. The Federal Reserve system is a fiat money system created and gamed by a few elite families and if their currency fails what the heck do I care, you should lose your investment.

4. If Hyperinflation hits almost anyone can pay off their mortgage with a weeks wages, that would be cool.

5. If I have a contract due to me, like selling a house for XX per month at XX percentage rate, how hard will it be for someone to pay off their $200,000 balance when bread is going for $125,000 a loaf? Is this fair?

The historic fact is when the currency is defaced, people that have savings get screwed, people that owe money get rich.

Something to think about.


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## Inor

These are just one man's opinion, so take them as such...



Montana Rancher said:


> 1. If you owe people money and the system collapses, then who cares? Where will you send the payment to?, does money even exist?, even if you have the money will anyone be there to accept it?


If I owe people money, I care. That is a commitment that I made and I honor my word. Even if they are not around to accept it, I will keep it for them in case they come back. The one exception to that rule is the government. If I owe taxes when the dollar collapses, piss on 'em! I figure they are stealing money from me in the first place since I did not enter into a voluntary agreement, they just said if I work hard and am successful, I owe them some changing percentage.



Montana Rancher said:


> 2. So I have made a commitment to pay my bills, if nobody is there to collect them am I off the hook?


Nope, they may come back.



Montana Rancher said:


> 3. The Federal Reserve system is a fiat money system created and gamed by a few elite families and if their currency fails what the heck do I care, you should lose your investment.


Yep - pretty much.



Montana Rancher said:


> 4. If Hyperinflation hits almost anyone can pay off their mortgage with a weeks wages, that would be cool.


The way they are fiddling with the monetary system up right now, you may be able to pay off your mortgage for less than a cup of coffee at Starbucks in a few years.



Montana Rancher said:


> 5. If I have a contract due to me, like selling a house for XX per month at XX percentage rate, how hard will it be for someone to pay off their $200,000 balance when bread is going for $125,000 a loaf? Is this fair?


Sorry to get on my high horse on this one, but your question "Is it fair?" is a hair trigger for me. :-D

For me, "fairness" is the exact opposite of "justice". Socialism is "fair" since everybody is equally miserable. Laissez-faire Capitalism is "just" because you receive your due based on your own skills at production and negotiation at the time the transaction took place. Is that "fair"? - Absolutely not! You may be more efficient at making things than me, or you may just be a better negotiator. Either way, you got what you deserved because you were able to find a willing buyer to pay a higher price than I was. In the case you outlined above, your buyer was a better (or luckier) negotiator than you. Oh well...

On your larger point, that is why I hate this Corporatism-Socialism hybrid system we are living under now so much. It is neither "just" nor "fair". Inflation punishes the savers and producers and rewards the borrowers and looters. Add to that a government that has different sets of rules for people that have the "power of pull" and the rest of us, and you have an environment that is tantamount to soft-slavery.

As an aside, if you do end up trading that house for a loaf and a half of bread, grab you wife and bring her (and the bread) by our place. Mrs. Inor makes a pretty mean French Toast and I stuffed some homemade breakfast sausage not too long ago that is good enough to make you do crime. At least you will get a meal to remember out of the deal. :-D

P.S. If you really want to see me go over the top try starting a post about the virtues of the story of Robin Hood. I think that is one of the most evil stories ever written.


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## LunaticFringeInc

Id be hard pressed to express my thoughts any better on this subject than Inor did.

On point 4 though...remember, that only works on things where you have a fixed rate of interest. You will be in deep doo-doo if you have any debt that is based on say 5% interest plus the prime lending rate. As the prime rate rises through the stratosphere so will your over all interest rate. Other than a mortage or Car loan this is how credit cards often work for most and where people have the most debt tied up outside the previous two. This is where most people will get pummeled to death, that and the rapidly rising cost of goods and services that are needed on a daily basis.

This is why I am scrambling to reduce my debt as fast as I can so I dont get caught up as badly in this soon in coming train wreck that is all but inevitable. It hasnt been easy and I got two credit cards to go and I will have that 600 lbs Gorilla off my back! What I have paid in interest alone in just 12 months with a increadibly low interest rate that I have probably exceeds what I owed in principal alone. When you look at it from that stand point and the S hasnt HTF yet, you can then see just how bad debt hobbles you and bleeds you dry. While I am paying well over what my minimum is, if I had no debt, it would be like a 1600.00 a month pay raise doubling my disposable income! Imagine what you could accomplish if your "pay check" doubled over night today?

Just because the economy tanks tomorrow doesnt mean all your debt will go to the way side, youll probably get out of some of it. Just cause the interest rates go up doesnt mean your pay check will go up as well or as quickly to allow you to keep pace. Yes its unfortunate that those who worked hard and saved money in the bank will loose a lot too. This is one of the reason Gold and Silver has been very attractive of late vs saving money and depositing it in a bank account every pay day. Look back to the Jimmy Carter years to see what I mean as an example.


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## pastornator

It seems to me that to build ones financial portfolio based on what might come about is the height if absurd foolishness. One might as well strip naked and stand atop a hill looking up like so many apocalyptic Millerites have done down through the ages. 

Take on what reasonable debt is required, and as little as is necessary -- what can be managed in all financial epochs -- and prep with the rest of ones finances so as to be sustainable and sufficient no matter what comes next. To do otherwise is only to prep for ruin.


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## dwight55

I guess to me it is one of those things that will work itself out.

If I owe the debt, . . . and can pay it, . . . I'll do just that.

On the other hand, . . . if the economy collapses to the point that mail doesn't get delivered, PayPal don't work, etc., . . . I'm not vacating my hooch to go trapsing all over the place just so I can claim the moral high ground that "I PAID my bills."

I'll make an honest attempt to settle all debts, but when the stuff is hanging off the fan blades, . . . I'll probably have more important things to worry about than the monthly bills.

May God bless,
Dwight


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## Moonshinedave

I am getting to the age, that 401k and retirement is having a lot more meaning in my life than it used to. I worked many a year for one company and have built up a very modest nest egg. If the dollar devalues, or for any other reason my nest egg is no longer, I guess I'll have to do whatever I can for an old man and his wife to survive. 
I have considered turning my money into tangible things, but that is a big gamble with the money that is to do me and my wife the rest of our lives, a gamble I am not yet ready to take.


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## tango

Be debt free. Work on paying off and not acquiring debt, while building your preps.
When the collapse comes, you won't have to worry about what you owe, just how to survive. That's what the preps are for---


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## Verteidiger

Well, since none of us are time travelers, no one knows for sure what the future holds. So what follows is pure opinion coupled with some understanding of what the true stakeholders will try and protect. By that I mean the banks, merchants, realty owners, tax authorities and government officials will seek to preserve as the status quo.

I do not think we will see a total economic collapse in America. There simply is too much at stake that has been financed in a country that operates off of finance capitalism. There is a lot of secured debt, meaning debt for which someone has given collateral to secure repayment of the loans. Creditors have the right to seize and sell the collateral (foreclose on the house and auction it off using sheriffs to ensure the collateral can be recovered). Secured creditors expect to get paid; and sometimes they pledge such secured debt to borrow other money themselves or sell the commercial paper outright at a discount, and the new secured creditor will want to get paid. That system works very well for the people who set up that system for their own benefit. So that is not likely to just go away voluntarily (nuclear war could take it out) but short of that, the finance capitalists have the police power and even the military backing up their system of monetizing secured debt to realize their return on investment - payment in full of the original principal (loan amount) and all interest that is owed on the loan. Absent some catastrophic worldwide event that literally destroys this international finance capital regime, it is in power, and it is not going away.

So, having your debt cancelled by meteor strike probably is wishful thinking, at best.

Think it through - you believe the system will collapse. You decide to max out your credit cards, and buy houses and cars until the banks cut off the money flow. You wait for the collapse you are sure will come, and it does not materialize. So now you either pay the man or the man takes your stuff, sells it off, and sues you to collect on any deficiency between what you owed the man and what the collateral sells for at auction. Simple as that, and bad for you. So much for crystal balls for financial planning....

And you cannot rely on what happened in other countries or in the past. The creditors learn from past mistakes and change the laws to avoid similar outcomes (why people can no longer discharge credit card debt by filing for bankruptcy protection after fully furnishing their house). And those other countries don't have a currency that is the reserve currency internationally. Mexico can print more pesos but they are just paper if no one uses them for transactions internationally. The dollar is a completely different medium of exchange as a result. If it is tendered to pay debt, people will accept it as long as it has its perceived value status. And I do not see that changing in my lifetime.

So, my view on debt is: it sucks. I hate owing money to a bank. I am not going to get into a personal finance exposé here, but it is a great feeling not to owe money to anyone. 

Being debt-free should be everyone's goal, and is the new American dream. That is how you really stick it to the man.

The people at the top who set up the pyramid scheme are not going to let it fail - they have too much to collect on still at stake....

My two cents, anyway, not collateralized by the way....


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## Ripon

I recently took on a large debt for a large parcel of land. I never really thought about the fairness issue in hyper inflation since I don't know the people I borrowed the money from (a bank). As long as I ever had debts I tried to mirror them with PMs in case of rapid or hyper inflation. I planned in such case to sell the PMs and pay off the debt. But would that be far to wipe out a $200k mortgage with, say 200 ounces of silver? Assuming silver reaches $1k an ounce in a state of hyper inflation. I would have trouble doing that to a family or man I bought the land from if they'd carried it, but I have less trouble doing that to B of A. 

There are many who have said in the case of SHTF if credit cards are in hand and working they will max them knowing repayment isnt going to happen. I find that kind of criminal. When I signed the note to buy our neighbors property I fully expected to to pay the $200k loan off in less than 10 years.


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## Inor

Enjoy, it is not really a bunch of stuffy British economists, plus it is only 3 minutes long.


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## paraquack

I guess I'm lucky. My wife and I have only one obligation, an auto loan to pay on. By not having any other debts to speak of, I have been able to put money into the things necessary in life and survival.


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## Denton

Debt is bad. It is bad to owe, and Keynesian debt is what got us in this bind in the first place.

This is a long read - about seven minutes. It's worth the time.

Impending Financial Collapse ? The Grand Finale: Here Is What Is About To Happen To You?An Economic Love Story, or Fifty Shades of Green? |


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## Ripon

I've clicked your link and will try and read after posting this, but I disagree debt is bad. If we are going to "inflate" the dollar to pay for our obligations in the future then debt is going to be a darn good thing. It raises and eithical question as I noted if we hyper inflate, but if we simply "suffer" 1970's era 10% type of inflation debt is a great investment.



Denton said:


> Debt is bad. It is bad to owe, and Keynesian debt is what got us in this bind in the first place.
> 
> This is a long read - about seven minutes. It's worth the time.
> 
> Impending Financial Collapse ? The Grand Finale: Here Is What Is About To Happen To You?An Economic Love Story, or Fifty Shades of Green? |


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## Ripon

I almost stopped at the point of warehousing $100 bills - they've done that for 40 years so to suggest its something conspiracle now - doesn't work. Anyone in manufacturing knows you make all you can before switching over to make something else - which costs money. There are lot of the "Fed" aspects my brother tries to sell me all the time I don't buy into - sorry.



Denton said:


> Debt is bad. It is bad to owe, and Keynesian debt is what got us in this bind in the first place.
> 
> This is a long read - about seven minutes. It's worth the time.
> 
> Impending Financial Collapse ? The Grand Finale: Here Is What Is About To Happen To You?An Economic Love Story, or Fifty Shades of Green? |


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## tango

The borrower is slave to the lender
Where do you want to be??


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## Lucky Jim

I've never been in debt in my life, there must be something wrong with me (sniffle).
The Powers try to brainwash people into thinking it's perfectly normal to be in debt, they even tried it with me when I was in my bank last year.
"Hello" said a smiling woman teller, "we'll get you fixed up with a Credit Card".
"I don't need one" I replied.
"But Credit Cards are much better and useful, everybody needs one nowadays" she said.
So for my amusement I let her waste 25 minutes of her time doing paperwork and computer entries to get me "fixed up", then when the CC arrived through the post a few days later I cut it up and binned it without activating it.
Jesus said _"The world wants you to dance to its tune" (Matt 11:16/17)_

I don't dance..


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## TMCertified

I always subscribed to the idea and was taught that if you go into debt you pay it off. I'm in my early 30's and have only had 3 cars. All have been paid off. I've had credit cards, use them, pay them off. Just how I was raised and what you do. As someone said earlier, if you agree to the terms you need to stand by them.

Now......when I bought my home in hopes that the housing crash was over (it continued to go further) I started changing my mindset. This wasn't something I agreed to, it wasn't something that I did, and now my house that I only planned on staying for a couple of years now has me locked in at 50,000 upside down. For once I actually thought about walking away. My family grew from 2 kids to 5 kids and a 3 bed 2 bath was not cutting it and it was the governments fault for the housing market crash yet I'm suffering. Now I still hung on to the, I agreed to it, I'll pay it. However, when things started getting tough my thoughts started changing as I need to take care of my family first before I take care of a bill brought down by the governments and banks screwing up of the housing market. 

We still have the house and going to try and rent it while we just bought our 5 acre land we are going to live off of and go into a self sustainable lifestyle. (The land we paid cash for) but it still has me questioning at what point do change from fighting an uphill battle to move on. I know a family who just stopped paying their house payment for 2 years and the government and bank ended up lowering their payments and forgave the 2 years! Yet, here i'm paying top dollar? Slightly frusterating. Sorry for the rant lol


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## Go2ndAmend

This is a good thread. The OP's question was whether debt was good or bad. I would have to say it depends. I have been in both situations having owed lots of money and now being near debt free. I would say for me, I like being near debt free better. Unless you are independently wealthy, some debt is necessary IMO to expand your business. The only personal debt that is "good" would be on real property, with a fixed low interest loan. This is especially true if interest rates rise dramatically. All consumer debt is bad - credit cards (unless paid off in full monthly), car payments, etc.


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## Denton

I think maybe we have forgotten the people who have been evicted from the homes in the last few years. I'll bet they aren't too in love with debt. 
If you owe, you don't own.

On the other hand, recent history has illustrated that debt is a good thing if you are the bank. If someone parks currency in the bank, and the bank runs into trouble, they don't have to repay your _investment_ and the government can take that currency to help bail out the bank.

I think the Biblical way is best.


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## Ripon

There is another side to the equation though.

Right now I enjoy a home that is debt free. However just before I paid it off I had capital available. What could I do with it? Buy PMs, buy land, where am I going to live?
I could have rented my current home for $1100 a month, or I could put my capital into a sizeable down payment and have a mortgage of $525 a month. Even with taxes I 
would not incur as a renter I'm at $700 a month and the interest I can write off from income (if I had it). So I saved $400 a month, $4,800 a year, and from a $30,000
capital investment - so yes the debt then was very good for me.



Denton said:


> I think maybe we have forgotten the people who have been evicted from the homes in the last few years. I'll bet they aren't too in love with debt.
> If you owe, you don't own.
> 
> On the other hand, recent history has illustrated that debt is a good thing if you are the bank. If someone parks currency in the bank, and the bank runs into trouble, they don't have to repay your _investment_ and the government can take that currency to help bail out the bank.
> 
> I think the Biblical way is best.


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## Denton

Ripon said:


> There is another side to the equation though.
> 
> Right now I enjoy a home that is debt free. However just before I paid it off I had capital available. What could I do with it? Buy PMs, buy land, where am I going to live?
> I could have rented my current home for $1100 a month, or I could put my capital into a sizeable down payment and have a mortgage of $525 a month. Even with taxes I
> would not incur as a renter I'm at $700 a month and the interest I can write off from income (if I had it). So I saved $400 a month, $4,800 a year, and from a $30,000
> capital investment - so yes the debt then was very good for me.


Good job, and congratulations! Paying off a mortgage is a big deal, if you ask me.

Now, in context (That is to say, the crap has hit the fan); let's look into what could be in people's future:

Nations are already dropping the dollar as the world reserve currency due to our government's lack of discipline (No longer alternative media fodder, but now mainstream), but when China unveils the new and improved, gold-backed Renminbi, the rest of the world flocks to the stable currency and the dollar is left, valueless. Discretionary spending is now non-existent as all your devalued dollars are going toward buying food. 
At one time, you thought you had no problem borrowing the bank's money to buy a house. After all, you put a big chunk down, got a good rate and had plenty of cash invested, making money. Now, with the dollar crashed and burning and the markets doing the same thing, you aren't sure how in the world you are going to pay utilities, buy food and pay the mortgage. A shame, you were only five years from having it paid off.

Who is going to come out on top? The banks or the people? Who owns the government, the military and the police departments?
This debt based economy is like musical chairs. I am glad you didn't get caught without a seat. If things happen like many of us fear will, a lot of people are going to get caught without a seat. None of those seatless entities will be the banksters, so don't worry about them. They are the ones who write the rules and pull the strings.


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## Ripon

In a state of hyper inflation wages will change monthly, then weekly, and eventually daily. I've always maintained a ratio of one ounce of bullion silver to every $1,000 in debt. In a state of hyper inflation (proceeded by regular inflation) it is not unreasonable to assume silver could reach a $1000 worthless dollars. Other tangibles too will be worth plenty, firearms, ammo, generators, solar panels. I am capable right now of 100% food sufficiency with out buying a thing.

A little over 3 years ago I used my IRA, self directed, to put a down payment on a section of land neighboring that which my dad bought and left to us. My IRA took on $75k in debt for this land. I was able to create 80+ acres of row crop on the parcel. I lease this out. The farmer who leased it paid me $80k (to my IRA) for a fixed rate lease for 7 years. I paid off the debt in my IRA and while he owns the right to use the land for 4 more years I will end up with either the land to farm myself or continue leading too him. I held the debt 4 months while I graded the land and prepped it for row cropping. Again....a good debt. I consider myself a creditor to the farmer and my loan to him as "good" as well. Now my brother and I recently borrowed big to buy two more chunks of land very near our own - only separated by BLM space. This summer we hope to create row crops on some and there is already some there. The farmer we already lease too will lease this as well. His annual payments will enable us to pay off the note in 7 years or maybe 5 if we can level and prep some addition acreage. I still consider this a good debt because I can take something of low value ( raw land ) and with my labor turn it into something of great value....farm land.



Denton said:


> Good job, and congratulations! Paying off a mortgage is a big deal, if you ask me.
> 
> Now, in context (That is to say, the crap has hit the fan); let's look into what could be in people's future:
> 
> Nations are already dropping the dollar as the world reserve currency due to our government's lack of discipline (No longer alternative media fodder, but now mainstream), but when China unveils the new and improved, gold-backed Renminbi, the rest of the world flocks to the stable currency and the dollar is left, valueless. Discretionary spending is now non-existent as all your devalued dollars are going toward buying food.
> At one time, you thought you had no problem borrowing the bank's money to buy a house. After all, you put a big chunk down, got a good rate and had plenty of cash invested, making money. Now, with the dollar crashed and burning and the markets doing the same thing, you aren't sure how in the world you are going to pay utilities, buy food and pay the mortgage. A shame, you were only five years from having it paid off.
> 
> Who is going to come out on top? The banks or the people? Who owns the government, the military and the police departments?
> This debt based economy is like musical chairs. I am glad you didn't get caught without a seat. If things happen like many of us fear will, a lot of people are going to get caught without a seat. None of those seatless entities will be the banksters, so don't worry about them. They are the ones who write the rules and pull the strings.


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## Denton

I hope you have five to seven years to pay that loan. I hope we have five to seven years of illusion, so that we can continue to prepare.


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## Ripon

Agree, but I have things to protect me if we don't.

For example my home is paid for. It might not be worth a lot in an inflationary state but its likely to cover my share of that loan - please note my brother is a partner
on that note and he's far wealthier than I. Next up I do invest in silver for SHTF and my brother invests in gold and silver for the same reason. In an inflationary
state the metals will likely rise and provide us access to cash in order to retire the debt. Last (definately last) we have several parcels now that can be sold while
maintaining our overall property as we want it. In a state of SHTF I think a place where one can self sustain, be remote / away from the hoards etc might fetch
a pretty penny - my brother already has said he's identified several "banksters" he'd sell a piece or two if needed to pay off our note.



Denton said:


> I hope you have five to seven years to pay that loan. I hope we have five to seven years of illusion, so that we can continue to prepare.


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## TMCertified

I don't want to derail this too much, but I never understood much for the silver and gold. If economy crashes self sustainability and bartering necessities will be much more valuable than a metal. I can see the only reason for gold and silver is if the dollar crashes and we need to switch to a different currency. Then if whoever will accept the gold or silver and if there is a place in the US that would be willing to take the gold and silver for the new currency and if stores will then take the new currency. I guess I just never understood that part as putting a lot of weight in gold and silver. I guess I can see one scenario if everything falls a specific way it would be good to have. But I'd rather invest into stuff to keep me and my family alive by ourselves if everything crashes than investing in silver or gold. Maybe this is for a separate topic but silver and gold investing would be much lower on my priority list.


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## PaulS

The metals are for when the economy comes back. During the crisis it won't have as much value as the things that keep you alive and well. If you want to hang on to your property then you will need money when things start to return to normal. The gold and silver will retain their "universal" value after the crisis so you won't have lost anything to inflation or deflation. You need to think about it this way; the value of gold doesn't fluctuate - the price goes up and down because the value of money goes up and down.


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## TMCertified

Ok, that makes a lot more sense now. Thanks for explaining. Was having a hard time wrapping my head around it.


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## Inor

PaulS said:


> The metals are for when the economy comes back. During the crisis it won't have as much value as the things that keep you alive and well. If you want to hang on to your property then you will need money when things start to return to normal. The gold and silver will retain their "universal" value after the crisis so you won't have lost anything to inflation or deflation. You need to think about it this way; the value of gold doesn't fluctuate - the price goes up and down because the value of money goes up and down.


Just to expand on what Paul says...

Think of it this way, in ancient Rome, an ounce of gold bought a good quality toga, a belt and a pair of sandals. Today, an ounce of gold will buy a decent suit, a belt and a pair of dress shoes. The goods that gold or silver will buy really has not changed much in 2000 years, only the size of the dollar number on the price tag.


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## Denton

Ah, so now we have full disclosure, Ripon! :lol: Debt is not really debt if you have it more than covered with rich kinfolk and a stash of precious metals.

And, to expound upon the expounding with reference to silver/gold, they are money, and whatever folding bills that are in your wallet are what is called _currency_. Currency, as in what is currently used in lieu of real money. The dollar (or whatever fiat note you use) goes up in smoke, but you have precious metals. You're "golden" as you are going to be able to buy into whatever is the next currency, and at a better rate than the saps who are stuck with the notes of the failed ponzi scheme.

Oh, and if you need any of my stash, I will take items of yours that I could use, or I will cheerfully take silver. ::clapping::


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## Lucky Jim

It's worth remembering that in a really serious SHTF situation money/gold/silver will be worth zilch because you can't eat it as this dood found out in a Survivors episode and starved to death, he had a ruck full of money but nothing to eat-


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## pastornator

I see the old rules about metals going out the window in an age of spreadsheet fiat money. We exchange NUMBERS these days, not things of actual value; and precious metals only hold value because historically kings preferred them.


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## Ripon

Can you folks, convinced metals have no value, please point to a history in time when metals had no value? 

While the hoards of people starving may not want silver or gold over food there are plenty of wealthy people too,
and those wealthy people won't be starving. Many of them will be setting themselves up for the future. They
aren't going to be doing that with paper; they will do it with land, PM's, and those things which have stood the
test of time as mediums of trade.


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## PaulS

Ripon,
precious metals always have value to someone but, and this is the important part, only those who have everything else will be able to, or want to, trade for metals. Most of the people you will be bartering with will have no use for gold or silver. The 90 - 95% of the population that we will be dealing with will have specific needs and will trade their excess for what they need. Most people will not be thinking about "after it's over" they will be consumed with just surviving the day. Those with a lot of money will not be mixing with the folks who are starving or sick. They will be inside their compounds or trading with others like themselves. 
Where you can trade a few Bic lighters for a meal you would end up paying much more "value" in gold or silver for the same meal. During the three years of war in Kosovo gold was rarely traded and if it was used it had the same value as "trinkets" or costume jewelry. People needed water, food and medical supplies. They needed a way to make a fire, and something to make them feel "normal" or good again. Alcohol and soft drugs were of more value than gold because it was a means to put your brain on "vacation" from the stress of survival.
If you wanted to trade with me, 400 series stainless or tool steel would hold more value pound for pound than gold or silver. A couple of ounces of 440 stainless could make a few broadheads for arrows and the tool steel could be used to make knives or repair guns or equipment. I would have to hang on to the gold or silver until the establishment - what ever it becomes - came back and people were less worried about surviving and more about living.


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## PaulS

The ending od any SHTF is why I have prrecious metals stored. My point is that they are a poor barter tool while it is on-going.


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## Nathan Jefferson

Debt is bad. Bad. Bad! BAD! Get out of debt.

Since people started talking about metals, and this is a debt thread I'll paraphrase (butcher) a saying I read somewhere; "Gold is the money of kings, silver is the money of nobles, paper is the money of the commoner and debt is the money of slaves"


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## tango

PM's are not a poor barter item. Those who have not acquired any will trade for it in order to have some for later.


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## PaulS

Controlled debt is a good thing but uncontrolled debt is the way to financial ruin.
It doesn't matter whether it is family or national economics.


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## paraquack

If you're starving and have no food and no water, how much gold will you trade for a can of beans and a bottle of water. IMO gold is only good for someone who is prepared for what comes. If you got tons of gold, but don't want to pay my price, should I decide to sell to you, all I have to do is wait a day or so and I will have all your gold at no expense to me.


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## Nathan Jefferson

Montana Rancher said:


> I'm vexed by debt in a SHTF scenario
> 
> 1. If you owe people money and the system collapses, then who cares? Where will you send the payment to?, does money even exist?, even if you have the money will anyone be there to accept it?
> Mostly likely you will end up owing someone after the fans rotors stop spinning. In all the research I've done you will see that most debts were still owned and retained by someone, so eventually you will most likely end up with a bill of some sort.
> 
> 2. So I have made a commitment to pay my bills, if nobody is there to collect them am I off the hook?
> Again, if you owe someone something there will likely be a record to survive. Though a 5,000 credit card debt might go away a 200,000 mortgage probably wouldn't
> 3. The Federal Reserve system is a fiat money system created and gamed by a few elite families and if their currency fails what the heck do I care, you should lose your investment.
> You should care because it will be immensely painful for you and your family. That being said, yes, it SHOULD collapse to clean and purge the system, but you still should care. (think of cutting off a gangrene foot... you will care even if its for the greater good.)
> 4. If Hyperinflation hits almost anyone can pay off their mortgage with a weeks wages, that would be cool.
> Once again, if you look at historic hyperinflations people are too concerned with food and other necessities to be concerned with paying off a debt. Even if you do pay it off for 'peanuts' it will come at a very high price.
> 5. If I have a contract due to me, like selling a house for XX per month at XX percentage rate, how hard will it be for someone to pay off their $200,000 balance when bread is going for $125,000 a loaf? Is this fair?
> It will be very hard. If you need $125,000 for a loaf of bread you probably don't care about paying off your house, once again look at what happened in many other hyperinflation scenarios.
> 
> The historic fact is when the currency is defaced, people that have savings get screwed, people that owe money get rich.
> 
> Something to think about.


I never really saw any examples of people who were in debt during a hyperinflation getting rich, at best they would get out of debt. People with tangible and needed goods are the ones who would get rich...

Also, debt is VERY bad to be in when you have HIGH inflation and not necessarily hyperinflation. If you look at the HIGH inflations in Mexico and other latin/South American countries in the past few decades you will see a pattern of letting inflation rage, then revalue or repeg the currency. When they do this they seem to always get the ratio wrong when repegging debt; often leaving you move in debt value wise than you were before the crisis. (example; you owe 1000 old pesos which buys an apple. Inflation comes and they repeg the peso 100 old to 1 new. Your debt is now 10 'new pesos' but the cost of an apple is 5 'new pesos'. your debt value wise has just doubled.)


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## Nathan Jefferson

paraquack said:


> If you're starving and have no food and no water, how much gold will you trade for a can of beans and a bottle of water. IMO gold is only good for someone who is prepared for what comes. If you got tons of gold, but don't want to pay my price, should I decide to sell to you, all I have to do is wait a day or so and I will have all your gold at no expense to me.


As you can see from other responses, there are people who plan on trading for PM's to improve their status. There will be a lot of people in the same boat. Always have been always will be.

Now the exchange rate or value exchange might be crap, where you trade in today's value $1000 in gold for $50 in food, but there will be a market for it.

Stock silver to trade with, gold to have savings when we pull through.


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## Montana Rancher

Lucky Jim said:


> Jesus said _"The world wants you to dance to its tune" (Matt 11:16/17)_]


I hope I get this quote right, Lucky Jim, I would appreciate it if when you put QUOTES around a phrase it was actually a quote.

"the world wants you to dance to its tune" is NOT A QUOTE, it is a paraphrase and an interpretation of the words of Christ. I find it offensive that you act like GOD actually said it verbatim.

The full quote of the actual bible makes the point quite clear, I am not arguing your point.


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## Montana Rancher

TMCertified said:


> I don't want to derail this too much, but I never understood much for the silver and gold. If economy crashes self sustainability and bartering necessities will be much more valuable than a metal. I can see the only reason for gold and silver is if the dollar crashes and we need to switch to a different currency. Then if whoever will accept the gold or silver and if there is a place in the US that would be willing to take the gold and silver for the new currency and if stores will then take the new currency. I guess I just never understood that part as putting a lot of weight in gold and silver. I guess I can see one scenario if everything falls a specific way it would be good to have. But I'd rather invest into stuff to keep me and my family alive by ourselves if everything crashes than investing in silver or gold. Maybe this is for a separate topic but silver and gold investing would be much lower on my priority list.


I haven't read the whole thread, but it would be naïve to believe that the global bankers that created the existing system and are ruining it with inflation do not have a new plan. I believe that plan is to trash the current global independent currency systems and create a global system. In that case, gold and silver would have more value than any other "currency".

In the time it takes to get the new world order installed barter goods would be king, I am not sure just how long that would be.


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## Nathan Jefferson

I would also like to add this; on a level I completely disagree with people who say something like, "You took on a debt, it is your obligation to pay it back." 

If you are talking about a debt between friends/family, you are right on.
If you are talking about a debt between a person and a bank/credit card/etc, I disagree.

If you are taking on a debt with a business, it is a business transaction. If you go in to the transaction intending to default then yes, that is immoral and illegal. If you go into debt and end up not being able to cover the payments, or even if your purchases are severely underwater (such as what happened with the recent housing bust...) you should make the best business transaction for you. That is why you post collateral and sign all of those fine print contracts, it is a business transaction, with stipulations and penalties. But if you end up in a position where it makes financial sense for you accept those penalties as opposed to paying back a debt, do it. 

But again, don't commit fraud by taking out a loan you DON'T intend to pay back, that isn't good any way you slice it.

lastly the best way to handle the above situations is to just not get into debt, or if you do make sure you have ample funds to cover your payments for an extended period of time if something were to happen.


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## Ripon

Actually I think there are two plans. They may be competing, and once they merge I'd say look out.

Plan A is a united nations gimmick called the Greenback. They have the technology and it would be a digital only money that is based on world currencies. The dollar included. Their "plan" was to make it a means of transferring goods between countries without the varations of monetary values (like Japan devaluing their Yen right now).

Plan B is a Chinese replacement for the Yaun; I first heard about it last week and already don't recall the name, but the rumor mill was all in a dither about them dropping the Yaun (did I spell that right) and moving to this new currency that is gold backed. Now the rumor mill was they wanted to wait till they were #1 in the world economy boat - which is 2016 I believe unless they have a recession and we grow significantly. Then its probably 2017.



Montana Rancher said:


> I haven't read the whole thread, but it would be naïve to believe that the global bankers that created the existing system and are ruining it with inflation do not have a new plan. I believe that plan is to trash the current global independent currency systems and create a global system. In that case, gold and silver would have more value than any other "currency".
> 
> In the time it takes to get the new world order installed barter goods would be king, I am not sure just how long that would be.


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## Ripon

However you forget free markets and assume no one else is around to make a deal with those bearing gold and silver. I think this is the real issue for those who think PM's have such little value; they assume they are the only trading post. I think more people then you would be entertaining the capitalist market for those with something to sell - like silver - like Gold.



paraquack said:


> If you're starving and have no food and no water, how much gold will you trade for a can of beans and a bottle of water. IMO gold is only good for someone who is prepared for what comes. If you got tons of gold, but don't want to pay my price, should I decide to sell to you, all I have to do is wait a day or so and I will have all your gold at no expense to me.


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## PalmettoTree

Anyone that fails to pay his debt is a deadbeat regardless of who or what company the debt is owed.


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