I'm presuming you are referring to personal debt. Twenty years ago I got sideways with some CCs while studying the nature of banking, debt, etc. I got mad as hell took everything not nailed down and cash out. Paid all the debts off. This because all debt is bogus fat cats making me into their biatch slave while they sat around their pools and babes. Another reason to get and stay out of debt is you can live a LOT cheaper not having to carry water for the fat cat bankers. Third reason is I no longer give them funds to continue their plundering of myself and my neighbors. Fourthly I can stand tall and know I'm not part of the problem but part of the solution.
It is "their" debt that they are inflating away, not "ours." They lend money to banks at 0% interest, but that money is not lent to us at that rate. Look at credit card and mortgage rates, which are both still very high in a depression economy like this one.
The main reason to pay off all of your debt is to GET OUT OF THIS SYSTEM! Then you will be out of this tyranny as well.
Are you talking about personal debt or the national debt? I took your post to be about personal debt which I have long had the exact same question. It seems that on our current course of rapid inflation that paying off your mortgage could be easier in the future provided one has some type of income. In a crisis wouldn't it be better to buy staples that one could survive on than to pay off debt?
Most responses here however view the question as to national debt.
Yeah I was talking about personal debt...like student loans, car payments, etc.
already know that those debts CANNOT and WILL NOT be paid off, because numerically, they cannot be.
not to mention the fact that it's NOT 'our' debt.
the banksters and their dutiful CONgressional lackeys who have hijacked 'our' govt are the ones who've racked up this debt and overleveraged us to the insane tune of over 1.5 QUADRILLION Dollars in derivatives exposure (BIS' own rough estimate circa 2010).
it simply needs to be wiped off the books or liquidated. even Dr. Paul has stated that.
frankly, shy of direct personal, private one on one contracts and consumer credit card uses for buying frivolous BS, anything that involves the FED and banking which is practically everything, should be wiped off the books. period.
otherwise, if we were to truly assume that our creditors were to truly call in their loans, we're talking armed Chinese landing on our shores demanding their money be paid back, and since we can't they'll be taking our land and properties as collateral. actually they don't have to since they've become better capitalists than we are now, and have economically begun to buy up our properties here, out of statist subsidies or legit one-on-one consensual commercial deals.
so who knows what they'll exactly do, once the EU currency collapse dominoes start, how long before they hit our shores, and what the Chinese, Japanese, S. Korean and Saudis would do in response, by then.
Predictions in due Time...
"Let it not be said that no one cared, that no one objected once it's realized that our liberties and wealth are in jeopardy." - Dr. Ronald Ernest Paul
1. Most arguments revolve around not getting into debt in the first place. Handling debt after it has been accumulated is a different animal.
2. You assume that the average person's real wage or real wealth is going to roughly mirror the inflation curve, which it won't. The top 10% will mirror that curve and actually diverge beyond. The bottom 90% will widen lower on that curve.
3. You are assuming all debt is at a fixed rate, when in reality, most debt is revolving (unsecured credit card debt) which means the rate will fluctuate.
Let's assume that you are talking about a home loan with a fixed rate. Let's further assume that your wealth or spending power will inflate roughly along the inflation curve. There is a complicated cost benefit analysis that has to be done to figure out if paying that off early makes any sense. If you paid cash for the house, it never makes sense to take out a loan on the house and invest the proceeds. Unless of course you are single, no kids, not married to your job, and you love, love, love risk.
You mean when the dollar INflates? When you pay back the debt with a cheaper dollar, you're doing yourself well and the lender dirty. When the dollar cheapens, that is called INflation. One problem is it is very difficult to change the debt trajectory on a dime. If you rely on borrowing now while rates are cheap and deficits are high, you might run the risk of overshooting and continuing borrowing through a sharp rise in rates. If you then decide to cut the deficit to balance or surplus, the dollar will likely DE flate, and I doubt the rates would be great at that point, though not horrible. So you're paying with more expensive dollars on the recent high interest debt, but yes also the cheap debt.
If you balance or surplus the budget now and keep manipulating the rates to zero, you can only have so much inflation i think. Because there's only so many government bonds out there for the fed to buy.
Students were asking the same questions back in 2008. Why not take every loan you can find and pay them in inflated dollars later?
Problem is and will remain when will this occur and what new rules will be put into place to protect the lenders?
Time has answered this question: it hasn't come soon enough for those borrowing in 08 and the path of default has become a horrible option as well. Student debt forgiven is now counted as income and ALL of it posts at the same time. So those freeing themselves of lenders are now slave to something even more corrupt: the IRS.
Be brave, be brave, the Myan pilot needs no aeroplane.
If you can get a low rate fixed rate, it can be wise to borrow as much as you can for as long as you can. The dollars are paid back with cheaper dollars over time. Works well in realestate, get a 30 year loan at a low fixed rate. Leverage can be a two edged sword, so you need the ability to cash flow what you borrowed on to make the payments and expenses. If the asset you borrowed on, either a business or realestate goes down, you can get caught short and that can hurt. As in everything, moderation is the key.
Except people with savings, the real lifeblood of an economy, will pay the bill.
The people with taxable earnings are only paying the interest on the debt.
And Congress keeps putting us into deeper debt.
Inflation is a tax.
People with real assets may be safer, until condition drive them into tax foreclosures.
Either way Congress is coming to gather our wealth to hand it over to our debtors.
Free includes debt-free!
... that interest rate hikes (and cost-of-living increases) will outpace wage and salary increases. So, if you have variable-rate debts and rely on labor income, you will be in a very vulnerable financial position in a hyperinflationary environment. (In addition, banks and other lenders may have enough political influence to force interest rate increases even on fixed-rate loans.) Rather than take the chance, pay off your debts now if you can.
A Constitutional, Christian conservative who voted for Ron and stands with Rand
then yes. If not, pay off your debts.
If it's at a FIXED Rate, paying it back in $100,000,000 bills that have a purchasing power to buy a loaf of bread would pay off debt a lot quicker.
slave to the lender.
If you play with fire you will get burned.
These are two old sayings that apply here.
When you are paying interest, that money is going down the drain instead of working for you. It's a bad idea to stay in debt when you don't really know what the future holds, which you don't.
In times of hyper inflation there is also high unemployment. In times of hyper or even just high inflation wages don't keep up with inflation's loss of purchasing power. How do you know if you will have a job when it comes time to pay off your debt? Will the rate of inflation be high enough for your plan to work as well as you expect? What if you are bogged down paying for food and utilities when your wages don't keep up with inflation, and you don't have enough money to pay off your debt? So many things could happen that you haven't planed on.
The wise course of action is to not play with fire.
I think you missed the point on my question, and besides if the debt becomes that unbearable anyway, people should be rising up and overthrowing the banks and oligarchs.
Pay it off as quickly as possible.
What I do is pay the minimum right now, and also at the same time buying silver. You would be able to pay the rest off very quickly with $100,000,000 Federal Reserve Note bills.
that they will take all your property, first by inflation (and with inflation remember intrest rate may even go up,) which may be what you want. Then comes deflation. So when they inflate the money supply, then contract it, you will end up living on the street (all the while those who decide monetary policy accomplish what ever they set out to accomplish.) After all, they get first dibs on the money.
“When a well-packaged web of lies has been sold gradually to the masses over generations, the truth will seem utterly preposterous and its speaker a raving lunatic.” – Dresden James
system is designed this way. Want to make 40% on your money? Learn the US tax code:
Pay the interest. Wait for devaluation. Even if there is a deflationairy depression, almost everybody will be defaulting on their loans and creditors will be unable to collect from everybody.
"A living Constitution is a dead one" -Ron Paul
if you didn't care about the middle class who would be wiped out and stolen from, but all it is really accomplishing is theft. I rather default on our payments, arrest those responsible, try them for treason and tell the FRB to take a hike (we owe most of the national debt to ourselves via the frb any how.)
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