hyper inflation question

Discussion in 'Markets & Economies' started by Silver91, Apr 3, 2020.

  1. Silver91

    Silver91 Member

    Joined:
    Jun 27, 2013
    Messages:
    200
    Likes Received:
    0
    Trophy Points:
    16
    Location:
    Australia
    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
     
  2. Jislizard

    Jislizard Well-Known Member Silver Stacker

    Joined:
    Apr 7, 2011
    Messages:
    7,800
    Likes Received:
    562
    Trophy Points:
    113
    Location:
    Australia
    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.
     
    66rounds, oziwassabi and STKR like this.
  3. openeyes

    openeyes Well-Known Member Silver Stacker

    Joined:
    Aug 26, 2014
    Messages:
    1,184
    Likes Received:
    973
    Trophy Points:
    113
    Location:
    Canberra
    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.
     
  4. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

    Joined:
    Nov 15, 2010
    Messages:
    19,616
    Likes Received:
    2,802
    Trophy Points:
    113
    Location:
    昆士蘭
    If the price of borrowing money is cheaper than the rate of inflation then probably yes.
     
  5. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

    Joined:
    Mar 16, 2019
    Messages:
    1,352
    Likes Received:
    1,026
    Trophy Points:
    113
    Just get a fixed interest rate and you wont have to worry about that.
     
  6. SilverSurfer77

    SilverSurfer77 Well-Known Member Silver Stacker

    Joined:
    Nov 24, 2011
    Messages:
    2,692
    Likes Received:
    179
    Trophy Points:
    63
    Location:
    T-Bar
    You still need a job and have the ability to service the debt.
     
    GF and 66rounds like this.
  7. heartastack

    heartastack Well-Known Member Silver Stacker

    Joined:
    Sep 2, 2010
    Messages:
    984
    Likes Received:
    404
    Trophy Points:
    63
    Location:
    Idaho
    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
     
    66rounds likes this.
  8. 66rounds

    66rounds Well-Known Member Silver Stacker

    Joined:
    Jun 22, 2019
    Messages:
    1,730
    Likes Received:
    1,705
    Trophy Points:
    113
    Location:
    Melbourne
    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.
     
  9. STKR

    STKR Well-Known Member Silver Stacker

    Joined:
    Aug 19, 2019
    Messages:
    633
    Likes Received:
    984
    Trophy Points:
    93
    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.
     
  10. heartastack

    heartastack Well-Known Member Silver Stacker

    Joined:
    Sep 2, 2010
    Messages:
    984
    Likes Received:
    404
    Trophy Points:
    63
    Location:
    Idaho
    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
     
    STKR and 66rounds like this.
  11. Jason1

    Jason1 Well-Known Member

    Joined:
    Aug 9, 2019
    Messages:
    541
    Likes Received:
    550
    Trophy Points:
    93
    Location:
    Qld
    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
     
    STKR and 66rounds like this.
  12. Markco2

    Markco2 Member Silver Stacker

    Joined:
    Mar 30, 2020
    Messages:
    49
    Likes Received:
    56
    Trophy Points:
    18
    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?
     
  13. heartastack

    heartastack Well-Known Member Silver Stacker

    Joined:
    Sep 2, 2010
    Messages:
    984
    Likes Received:
    404
    Trophy Points:
    63
    Location:
    Idaho
  14. Markco2

    Markco2 Member Silver Stacker

    Joined:
    Mar 30, 2020
    Messages:
    49
    Likes Received:
    56
    Trophy Points:
    18
    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.”
     
  15. heartastack

    heartastack Well-Known Member Silver Stacker

    Joined:
    Sep 2, 2010
    Messages:
    984
    Likes Received:
    404
    Trophy Points:
    63
    Location:
    Idaho

    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.
     
  16. Laughing Kookaburra

    Laughing Kookaburra New Member Silver Stacker

    Joined:
    Apr 13, 2020
    Messages:
    8
    Likes Received:
    10
    Trophy Points:
    3
    Location:
    Brisbane
    It’s disgusting!
     

Share This Page