# Hyper Inflation



## Ripon (Dec 22, 2012)

If you are convinced the nation will hyper inflate or at least "dramtically" in flate in the future then why wouldn't you
incur debt? If there is hyper inflation or serious inflation debt becomes much easier to pay. The dollar you borrowed
is worth far less then the inflated one but no loans have provisions for inflation. If you have a $100,000 mortgage and
after a year of 1000% inflation a sum of $10,000 would pay off your loan. 

I've always had the concern of deflation myself. In which case the dollar would not be available to pay on your debts
and being in debt would screw you over; but seeing as our government could not let that happen for their default I'd
say the odds on inflation/hyper inflation are far greater.

Metals are a good hedge on inflation no doubt.


----------



## AsteroidX (Dec 11, 2012)

Neither hyper or deflation is good. We need a good stable economy that has growth invested into it. Not withdrawn from it. We are far from the truth to the scope of how badly the average American is being ripped off yet. But many people are hard at work to expose the corruption and greed with limited resources.


----------



## alterego (Jan 27, 2013)

I have considered this in detail, and had believed that I would like to be in debt one million dollars on land, when the inflation/hyper inflation kicks in.

But lets use this as an example.

you make 80,000 a year and pay 30% in taxes so you take home 1000 per week, approximately, I know the math does not work out exactly stick with me please.

so of the 1000 you, pay for groceries cable TV cell phone gas insurance and home morgage etc. you have 100 to 150 left to take the old lady out to eat and put gas in your tenagers car.

high inflation sets in, and the government wants more revenue.

I will give specifics now thaqt have occured to me in the last few months. My health insurance went up 34 per week. My SS with holdings went up approx 33 per week, es the numbers are close. 67 dollars a week less. gas prices have just went up, I am spending another couple 20 dollar bills per week in gas.

What I am getting at here, from your original post, when hyper inflation sets in, you can not buy bread and milk to eat, there is no money to pay on the debt that you believe in your mind in minimal in comparison to the economic dollar value stand point.

Few are getting raises right now, most have had their pay cut in one fashion or another, so you have income going down, raw cost going up and the spread increases, it is not linear, if it were linear, then your theory would work. 

Only the governments income is based on a percent of the dollars exchanged your income is not.


----------



## Ripon (Dec 22, 2012)

Generally that is how regular inflation works. The costs go up but the income does not. 

However in a state of hyper inflation it is possible wages / earnings will be adjusted. If you recall the fiction of one of Rawles books he stated they were literally making price and wage adjustments 2x a day. I could see it happening monthly, then even weekly, but daily would probably mean the end is truly near. When you look at the St. Louis Fed Reserve notation on bank reserves (electronic cash held by institutions) it went from a 50-80 billion norm to $2 trillion plus a few years ago to prevent a run on the banks. 

And while I know wages, earnings, etc always lag the tangibles like gold normally lead. 

100% inflation means what was $4 (like gas) becomes $8. Gas is far more fluid (no pun) as war, refinery capacity, speculation, and governments can easily impact it so it's a poor reflection on inflation. Just saying overall inflation of 100% everything doubles, including assets, but NOT debts! Back when I lived in another world with $250k mortgage, business, credit cards I recall my attitude was have at least 2 ounces of silver for every $1000 in debt. I was usually able to do that except right after buying a home in '04. I never was a gold bug just due to limited resources and have only what my parents left me. 

I currently owe only about 7 months payments on a home in CA. After those payments I'm debt free, but a neighbor to our BOL wants to sell. My brother thinks we should leverage our property and the neighbors and buy it. This would put us $250k in debt. The neighbors land includes enough lease income to cover that but my wife and I are thinking 'no debt' and my brother is of the mind set debts will be easy to pay off in our messed up society. 

Just trying to think it thru. The neighbor isn't selling fast.


----------



## Ripon (Dec 22, 2012)

I'm already retired so no job to lose, I would not have earnings to pay on the debt but lease payments from our own property and the one purchased. The debt would run us about $1500 a month. Our present leases on some of the land run that much and we'd be acquiring 1.5x the land we have now and about 1.5x the lease income. That provides us a net increase in both land and income, but I've tried to tell my brother - you know we have enough! Its not like dad left us with a little land he left us with a LOT of land and if we lived there we can't manage it ourselves anyway - thats' why we lease it out. My brother is a fellow prepper but he'd financially better off. He lives near Chicago and keeps a plane ready to go for a bug out vehicle. He's of the firm belief holding debt is a great thing right now in this economy - under these kind of circumstances. My wife and I are just not sure; all we have to do is agree to pledge our interest in the property and its a done deal. Fortunately with our home about paid for we'd have enough equity in that to pay off our share of the debt too if something natural wiped out the farm land and we got no rent. Just ruminating - not sure which way to go. I still think we have enough land.



oswegoscott said:


> My biggest goal was to get OUT of debt! I finally am and love the feeling of being beholden' to nobody--especially big banks. Man,what if something major happened to your health
> or you lost your job? "They" then have a reason to take from you. If you feel inflation is an issue ( I do) then put your money in commodities---mainly gold and silver.
> The metals will at the very least keep up with inflation


----------



## StarPD45 (Nov 13, 2012)

If economic conditions prevent your tenants from making their lease payments, could you still make your payments if you buy the additional land? That's the big question.


----------



## Ripon (Dec 22, 2012)

That is the truly good question. The people that would pay the rent already pay us for property we have now. 
They would be expanding - I'm kind of surprised they don't buy it - they have to know its for sale. They have
leased from our family for a very long time - in fact this is the second generation of farmers leasing from us
on the same property. They do own other land in the area themselves. My brother maintains more gold then
I do and probably a little more silver too. I gave him the green light last night to mortgage our property and
buy the added land. He's happy. I think I will be too. I told him he has to double his silver holdings though.
If need be I could sell my home in CA and pay it off - and to be honest I'm still not sure having a mortgage 
isn't a bad thing if we inflate. After obummers demand for a hike in minimum wage (very inflationary) last 
night I can't help but think our dollar is headed down hill a little. - maybe like a snow ball on Mt. Everst 
little.


----------

