hyper inflation question

S

Silver91

Member
hi guys,
i hope this is not too silly a question
but let's say eventually hyper inflation does happen with all this printing
and it costs $300 for bread
and subsequently when we charge for our services it will be significantly more

isn't the silver lining here is that the bank loans we have will then become insignificant that it would be the best time to pay them all off. therefore, putting yourself to get as many home loans as possible / leveraging yourselves would be a good thing. or am i missing something here?

thanks
 
I would imagine the banks would hyperinflate the loan interest rates so you end up owing even more.

Can't see them or their cronies in government letting anyone get away with anything like that.
 
I remember during the 80's when mortgage interest was high but inflation was high - it was hard to get started with a Mortgage. The payments in the first few years were a killer. But within ten years your mortgage was substantially reduced in value due to wage inflation. So inflation really helps with debt as it reduces in its overall value - assuming that wages are being inflated as well.

I cant see hyper inflation coming in the near future for Australia as yet. We just do not have the foreign debt levels to create that situation YET. We could have inflation but again with such low interest rates it seems that this will simply be asset value inflation.
 
Silver91 said:
isn't the silver lining here is that the bank loans we have will then become insignificant that it would be the best time to pay them all off. therefore, putting yourself to get as many home loans as possible / leveraging yourselves would be a good thing. or am i missing something here?

thanks
Click to expand...

If the price of borrowing money is cheaper than the rate of inflation then probably yes.
 
Yeah if you were lucky enough to know for sure you would have good cashflow in a hyperinflation then by all means go out and buy 10 houses on a fixed interest rate. Also be aware that those houses might remain empty as people move into shacks and reduced quality of living.
But yeah unless the rules change fixed interest loans get inflated away. The problem is the world is so crap by then nobody feels lucky
 
How exactly will you maintain so many houses presuming you have a job to service the loans when there are hungry and homeless people on the street? Unless you intend to turn them in hostels/refuges.
 
A Central Bank can create as much currency as it desires without any significant inflation PROVIDING that the currency doesn't make it into the REAL economy.

What we are seeing today is record levels of currency creation combined with extremely low levels of velocity.

Higher velocity = higher inflation.
 
STKR said:
A Central Bank can create as much currency as it desires without any significant inflation PROVIDING that the currency doesn't make it into the REAL economy.

What we are seeing today is record levels of currency creation combined with extremely low levels of velocity.

Higher velocity = higher inflation.
Click to expand...

yeah, the old ‘deflation before hyperinflation’ hypothesis. The more crying jobless that get handouts the more velocity we will get - more money chasing fewer goods and services
 
If the for sale section with premiums on silver being asked here on this page is anything togo by, hyperinflation has already started here lol
 
I think it's highly likely that we will enter a long drawn out deflationary period with a lot of civil unrest and many people caught between the cracks thrust into poverty. Many small businesses that have been struggling already will fail. There are over 2 million small businesses in Australia making up 97% of total businesses. Already we are seeing industry groups wanting concessions and bailouts. Some are justified. Why give RE Agents some form of reprieve. Let them fall like dominoes. Same goes for our property bubble. The biggest bubble in history with substandard buildings, so many councils, surveyors developers, bankers with their hand in each others pockets. Pass the brown paper bag mentality.

Oh yes! Then we have the higher education sector where universities have fed of the influx of international students. We have one of the highest rates of international students as a percentage in the world. It was an open cheque book for the education system. Well that has now suddenly come to a screaming halt. Apart from Tourism, that is a major part of our GDP.

Our Guvnuts have no idea what ordinary everyday citizens have to go through.

In years to come, we will hate them for what I believe is to come and it won't be pretty.
Our government has sold the farm and everything in it, including us, the plebs.

Anyone for a revolution?
 
That's the problem heartastack,

"Yet using taxpayer funding to help an industry that caters to the wealthy has also sparked criticism. Before the bill was announced, Dean Baker, senior economist at the liberal-leaning Center for Economic Policy, told CNBC: “It’s hard to imagine anything worse. Putting up public money to support an industry that serves the rich would be hard to justify. It’s absurd.”
 
Markco2 said:
That's the problem heartastack,

"Yet using taxpayer funding to help an industry that caters to the wealthy has also sparked criticism. Before the bill was announced, Dean Baker, senior economist at the liberal-leaning Center for Economic Policy, told CNBC: “It’s hard to imagine anything worse. Putting up public money to support an industry that serves the rich would be hard to justify. It’s absurd.”
Click to expand...


There are a lot of reasons to put rocks through windows on that.
But here's the thing, how many regular Joe's service rich people on those planes? Thousands? Tens/hundreds of thousands? In reality we are all serving rich people. This is a key failing of socialism.... yet the revolutionists will cry capitalism destroyed us.
 
Markco2 said:
That's the problem heartastack,

"Yet using taxpayer funding to help an industry that caters to the wealthy has also sparked criticism. Before the bill was announced, Dean Baker, senior economist at the liberal-leaning Center for Economic Policy, told CNBC: “It’s hard to imagine anything worse. Putting up public money to support an industry that serves the rich would be hard to justify. It’s absurd.”
Click to expand...

It’s disgusting!
 
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