Any Positive Aspects of Inflation?

Discussion in 'Financial Cents' started by 3M-TA3, Mar 6, 2021.


  1. 3M-TA3

    3M-TA3 Cold Wet Monkey

    No doubt we are at the cusp of major inflation to rival and likely surpass the Nixon Carter admins. Is there any silver lining to this?

    Seems that if you have a fixed rate mortgage that your home would get not only an equity windfall, but also the amount you owe becomes relatively less in terms of buying power.

    Any thoughts on this and other aspects of inflation that could be leverfaged to advantage by us bottom feeders?
     
    Seepalaces and Gator 45/70 like this.
  2. UncleMorgan

    UncleMorgan I like peeling bananas and (occasionally) people.

    One of the best situations to be in during a massive hyperinflation is eyeballs deep in debt.
    You get to pay your creditors off in Monopoly money, for all practical purposes.
    If you think the balloon is going up, take out loans to option farmland--or fishing boats.
    Make the payments as they steadily become easier to pay off.
    When $100,00 worth of mackerel (or potatoes) sells for $10,000.00, pay your debts.
    With regular inflation, you can do that over 40 years. With hyper-inflation, you can do it over three weeks.
     
  3. 3M-TA3

    3M-TA3 Cold Wet Monkey

    Two things I see as issues, especially with hyper inflation are mushrooming property taxes based on mushrooming property values and the ever present threat of having you paid off property for “the god of the people”.

    property taxes in my liberal paradise are now 6k per year. If my wages don’t keep up with inflation $60k would be a killer.

    likewise, you can always expect politicians to do whatever they can to take advantage
     
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  4. Seepalaces

    Seepalaces Monkey+++

    I've been tossing this around in my head. Is there an international policy issue to worry about as a consequence of this? If I live in Asia, I might be pretty unhappy with the obvious intent of the US to inflate their way out of some serious debt. I understand that China treated Biden's outreach with some serious cold shoulder. That wasn't my expectation. Either they're angling for aid dollars or this is a bigger deal to them than we think it is.
     
  5. Cruisin Sloth

    Cruisin Sloth Special & Slow

    They need to learn to listen and / or catch lead
     
  6. oil pan 4

    oil pan 4 Monkey+++

    Think you nailed it. If you have a really big loan, at a really low interest rate over a really long time.
     
  7. DKR

    DKR Raconteur of the first stripe

    If my wages don’t keep up with inflation or lose my job - a real possibility, all inflation does is act as a hidden tax to steal your wealth.

    I lived thru the hot mess of Jimmy Carter, not interested in going through that again. However, it appears that nobody in DC is asking my opinion....and there are votes to buy and cronies to pay off.
     
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  8. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    With hyper inflation, if your wages stay stationary, you are dead. Can't afford new prices to eat, that house and car note aren't going to get paid off.
    Unless you have an asset that inflates right along with it, you are going to go backwards fast.
    Got Gold or Silver?
     
    Altoidfishfins likes this.
  9. johnbb

    johnbb Monkey+++

    Yep, jimmy Carter years interest rates sky rocketed and had a ripple effect through the economy. I remember looking at a new car then-- rates were 14%. Car manufactures will take a hit low demand as well as the boating industry. I can see it now Bidumb will have economic relief checks --just print more money
     
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  10. UncleMorgan

    UncleMorgan I like peeling bananas and (occasionally) people.

    During the Weimar hyperinflation, people would rush out as soon as they got their paycheck to buy anything that might be traded for food later.

    At the end of WW!, the US dollar was worth 4.2 German marks.

    In November oif 1923, the US dollar was worth 4,210,500,000,000 German marks.

    I have a much more recent 500 billion dollar bill from Zimbabwe, nicely framed and hanging on my wall.

    At the time of issue, it was worth $0.03 US.

    Those who have not kept up with the happenings in Zimbabwe during the last few years are VERY STRONGLY advised to do some serious net searching.

    Immediately.

    A good place to start is "Kathy Buckle." She posted many articles on Rense.com.

    Do not think for one second that what happened in Germany and Zimbabwe cannot happen here.

    It IS happening here.

    This is just the phase where inflation creeps up, the gradual rise before it goes exponential.
     
    Last edited: Mar 8, 2021
    mysterymet, johnbb and 3M-TA3 like this.
  11. enloopious

    enloopious Rocket Surgeon

    History does not repeat itself but it does rhyme. During the Carter era we, as a country, were in a much different position. We still had a lot of value in the country, the dollar, and our trust as a nation. We have just started the hyper-inflation but also the housing market is more inflated than it has ever been. This is a unique situation. Normally you could rely on the housing market to keep going up and up and up but with the "everything bubble" we are now looking at, it seems that we are in new territory with idea what to expect.

    Max Keiser is much more savvy with this stuff than I am. Check his data.


    I guess there's also the comedic version...
     
  12. Cruisin Sloth

    Cruisin Sloth Special & Slow

  13. johnbb

    johnbb Monkey+++

    When countries who are holding our devaluing dollar have had enough and start dumping dollars that's is when the SHTF. Our criminal politicians are printing money like there is no tomorrow just to placate the unwashed masses and keep themselves in power. Outsourcing our jobs, return to energy dependence, over valued stock market, flooding our job market with illegals, depending on food imports, spending on military misadventures. Zimbabwe here we come.
     
    Last edited: Mar 8, 2021
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  14. Cruisin Sloth

    Cruisin Sloth Special & Slow

     
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  15. johnbb

    johnbb Monkey+++

    This illegal government is about to pass a trillion dollar + covid relief bill of which only 20% is actually going to covid relief-- the rest is going to left wing pay offs. As Mr Rogers would say---- can you say hyperinflation
     
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  16. JrOrtiz

    JrOrtiz Monkey

    With the looming threat of inflation and I needed to borrow I would try to back it with some physical silver. My thinking is that silver should be about $100. So if I am going to borrow $50,000 I would stash 500 oz's as a hedge
     
  17. Cruisin Sloth

    Cruisin Sloth Special & Slow

    your math is way off !! WAY
    Monster box of AG Canadian Maples are 16500. last i bought 3 in Canadian Fiat
    2 months ago
    SO learn my #'s and adjust
    Sloth
     
  18. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    One of the aspects of this inflation is ... they put really expensive money directly into your checking account when they want to 'stimulate' you.
    basically they are helicoptering 5.5Kg of silver or 3oz gold or a SVT40 and 10 spam cans of ammo or a 2004 Toyota 4Runner.
     
  19. mysterymet

    mysterymet Monkey+++

    As before, I’m not getting crap from Uncle Sugar this time around either. No free money for me.
     
  20. JrOrtiz

    JrOrtiz Monkey

    Yes it was. Sorry. Blame it on the beer.
     
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