I would like to add that during the Mexican Peso Crisis, the Mexican banks revalued the mortgages to the "new" value of the Peso and people were wiped out. That included many American retirees who bought property there during that time. Of course who owned those despicable Mexican Banks? Why Bank of America of course! Just to name one of them. Pay your mortgage off if you can!
whatever balance you owed, your loan was "recalculated" based on the "new" Peso which was 10-20x higher or MORE.
No, look at weimar germany, the mortgages there were revalued in gold, if you didn't have the gold you were fucked.
countries that have experienced hyper inflation have not returned to gold or silver coinage or a gold backed currency . Germany replaced the R-Mark with the D-Mark , Brazil and Argentina introduced new paper currencies , Zimbabwe with domestic gold production has reintroduced a new paper currency . Only Countries with sound paper money have returned to a gold standard .
I have a question about paying off debt such as mortgages or loans. If cash is being devalued in a direction like Venezuela/Zimbabae/Germany... then wouldn't it make sense to have as much debt at low interest rates as possible. If you bought a home for $500,000 twenty years ago and paid $1000 (or whatever) per month. How much would that $1000 payment be be worth after years of inflation/devaluation. The home would probably have doubled/ tripled or more but the monthly payment of $1000 would be a bargain at today's rental prices. Same as if you took out a loan today to buy silver/gold... your loan payment becomes devalued while your gold/silver investment goes up?
Govts always reset mortgages to the current level of currency valuations. They can never ever allow freedom from debt slavery then we would not need politicians nor big govt. Venezuela reset mortgages. Some people owed $5,000 mortgage now they owe $50,000,000 after the govt reset them. There was a 7 month window during chaos you could have paid off the mortgage using somewhat inflated dollars. Maybe would have saved you 20%-30% is all. Then they repriced mortgages. They are bastards. Bankers are crooks that own politicians. The avg wage there is $40,000 per month but s hot dog on the street cost $9,000.
exacty John! The only way Sandy could win is if he could afford to pay off the loan in full at any time and hence didn't need the loan. then you win.-But then why deal with the bastard bankers at all- While this is an unusual situation where banks are guarenteed to lose, they know it and as before are not making new loans for any situation they will not recoup their money or house in a default, currency reset, hyper inflation .... Imagine if your $1000 dollar payment on loan could buy you a loaf of bread or pay the mortgage and your wages haven't gone up.? Now if as a corp you could get cheap interest loans and buy back a bunch of your stock , inflating the value with government handouts while nothing more in the company has increased production or added value. Sound familiar, Zombie companies used to fail now just the middle class fails.
Don't go crazy and derail any trains though.
John Law and the creation of the Mississippi company along with the introduction of massive sums of unbacked paper currencies is a prime example of how expanding money supply leads to massive price increases and eventually total economic disaster. Great example of financial history that we are doomed to repeat.
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