muses of the moment

July 27, 2012

groovygirl’s current feeling about the markets…..

Filed under: Odds 'n ends — totallygroovygirlfriday @ 1:46 pm

“Strange game. The only winning move is not to play.”

What happens to mortgage debt in a hyperinflation?

Filed under: Hyperinflation — totallygroovygirlfriday @ 8:20 am

This is a trick question.

In theory, you are paying your mortgage debt with less valuable “dollars”. However, this theory makes a lot of assumptions to turn out in your favor.

In a real hyperinflation, or even a severe inflation, you will be spending so much of your income on food, energy, and auto gas that you will not be able to afford to pay whatever small monthly amount your mortgage (or any other debt) has become.

This theory also assumes that you 1) have a job and 2) the company you work for is solvent enough to increase your wages at the same rate and timeline as the hyperinflation/inflation. The last decade proved that even if your employer increased your wages with the official rate of inflation, you fell behind the real inflation rate around 5% per year.

The best thing to hope for is the government puts a hold on all debt until the currency is “revalued”. Then you have to figure out if your debt just got larger in real value during the “revaluation” process and you are actual saddled with more debt than you had before in real terms.

Pay down debt. It will make your life easier in a hyperinflation, cost-push currency inflation, currency collapse/revaluation, or extended loss of employment. One or more of these events will happen in the next 10 years.

Goodbye America

Filed under: Odds 'n ends — totallygroovygirlfriday @ 3:57 am

Burning Platform posted this letter from a friend on his website. Click here.

One note: groovygirl read (somewhere, sorry, it was a while ago) that China’s upper middle and wealthy classes were considering leaving China, believing that their wealth could be taken away by the government. They want to come to America, believing their wealth will be better protected here.

Groovygirl is not sure if every country is not caught in the oligarchy trap. The next question is: is a foreigner and his/her wealth and rights treated better in another country?

So, where is the safe haven country?

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