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Question about '08 economic collapse

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posted on Dec, 2 2007 @ 09:01 PM
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Hi,

I am a long time reader but this is my first post. I usually just enjoy ufoloy topics but have recently been reading about the U.S. economy.

I read a very well-respected economist predicts that CY 2008 will be worse than the Great Depression. His name is Gerald Celente. Again, very well known and respected.

My question is simply: if the dollar's value "collapses" (whatever that means) or even plummets 90% as predicted, what happens to all of our consumer debt.
In other words, is my student loan debt now "worthless?"




posted on Dec, 2 2007 @ 09:09 PM
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...you wish. First-world debt is not going to be forgiven, there's no one out there who wants it anymore. What are you rates? Check the 'debt rates' or CC interest rates -- they can go up to 35%+, there's no regulation and the debt of middle America will go off sooner then, like your OP headline... be careful w/ any debt, the illegal fed reserve can adjust their 'target' rate every month, banks adjust -- but, like you mentioned the price of the dollar and dropping of U.S. holdings overseas will make that inconsequential when the proverbial you-know-what hits the fan.



posted on Dec, 2 2007 @ 10:32 PM
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reply to post by worried08
 


You are absoulutely correct. You will pay off your student loan for what will amount to pennies on the dollar. That is the silver lining of a complete dollar collapse. The debtor nation will love hyperinflation as long as it is fast and furious. Sell a car and pay off your house.



posted on Dec, 3 2007 @ 01:00 AM
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reply to post by disgustedbyhumanity
 


Thanks for the reply.

However, I still don't understand how this exactly works. I have just paid off my fairly new car and all credit card debt. I now just have $60k left of my mortgage but I have an EVIL amount of student loan debt that was a worthless education anyway.

If collapse happens in 08, and I believe so, how does 100k in student loans become pennies on the dollar?
Should I have kept all of that credit card debt also and run up a bunch of more debt if I absolutely know it will happen?

I know nothing of economics.



posted on Dec, 3 2007 @ 02:25 AM
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i think what they are saying is, if hyperinflation kicks in, the amount of dollars you earn at your job will increase. lets say for example you used to make $15 per hour but now make $200 per hour because of hyperinflation. in this scenario you would earn 416,000 per year with a 40 hour workweek.
you could now pay off the loans that are at a locked amount of dollars per month alot faster. you could pay off your house in a few months rather than 30 years.
of course the flip side to this is everthing else will be drastically more expensive so you probably wouldnt be able to apply tons of cash to your loans because you would be paying $1000 bucks to fill up your car... alot more for food etc. everything will stay relative in terms of value.



posted on Jan, 1 2008 @ 08:26 PM
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Gerald Celente will be on C2C tonight with his dire economic prediction if anyone cares to listen. Maybe he has changed his mind?



posted on Jan, 1 2008 @ 10:19 PM
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Lets make this easy.

Say you make 15 dollars an hour. The value of the dollar drops. The interest you will pay on what you owe will sky rocket. Your wages won't be raised though. In fact, you will probably lose your job.

If the dollars value drops and then $1=$5 now, your rates would also increase. Futhermore, your pay would either drop dramatically or you would be let go. The companies only have X amount of dollars. If the price of production just increased five fold, you can expect ALOT of people being let go. The companies simply won't be able to afford that. They may even go bankrupt.

If you have 20,000 dollars in the bank, you will still have 20,000 dollars in the bank, but what you can buy NOW will only be 1/5th of what you bought then. So now your college education would cost you 5 times as much. Everything would increase around 5 times in cost because the cost to produce it will cost 5 times as much.

Yes you will still owe the same amount of debt, but unless you pay it off quick with money you already have, you are going to face a bad situation fast.

Wages decrease or loss of job, increase it cost of goods and services, huge increase in interest on your debt all combine together to what we call bankruptcy and eventually homelessness. Depressions are bad on every front.



posted on Jan, 1 2008 @ 10:33 PM
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Try Stagflation, which is slowing economic growth (a recession), with increased price levels (inflation). This is essentially the worst of both worlds. The decline of the housing market is lowering economic growth all over America, and as sub-prime crumbles to the ground lowering the value of homes and non-money assets, the value of your money dwindles down as well as the fed feels obligated to cut rates.



posted on Jan, 2 2008 @ 12:03 PM
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I think I'm not to bad off right now...I have no credit card debt,student loans are paid off, we own 1 car out right but i'm getting ready to buy a second with 10,000 as down payment and I still owe 140,000 with a 6% fixed rate on my mortgage. Do you economic guy's think I will be in trouble? I hope not.



posted on Feb, 8 2008 @ 01:34 AM
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I just listened to the "psychic twins" on C2C.
They say the housing market will be bad for a couple of years but overall, they are optimistic.
No doom and gloom with the economy. (no crash or dollar collapse)



posted on Feb, 9 2008 @ 03:30 PM
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reply to post by CaptGizmo
 


I'm no economist, but my advise to you would be to pay the 10,000 for a good used car if you really need a second one, and pay down your mortgage as much as possible, lowering your standard of living temporarily if necessary. If the economy tanks, you'll be in much better shape, if it doesn't, then you'll be ahead on your house and be able to apply that extra money to long term investments.



posted on Mar, 3 2008 @ 12:06 AM
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reply to post by resistor
 


I'm no economist either but I wouldn't give that advice. From what I gather, hoard all the cash you can.
Oddly, I just "completed" the advice you gave to the above poster and wish I hadn't.

I wasn't behind on any bills but decided to pay off my new car and other loan types with my savings.
Now my thinking is that if there is, as Gerald Celente believes, an economic collapse (worse than the Great Depression), who cares about credit card bills, etc.
Why? ...because everyone else will be in that boat also. What are the banks going to do, come after everyone?
Cash will be necessary to buy necessities -- food!
I certainly agree, though, that we shouldn't buy anything right now that we don't truly truly need.

Please tell me if I'm wrong.

[edit on 3-3-2008 by worried08]



posted on Mar, 5 2008 @ 05:19 AM
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Are you familiar with the new credit laws that went into effect last year? I wouldn't be surprised to see 'work camps' for debtors after tshtf. Now that you've got some income freed up you can put it towards long term storage food and some real money, gold and silver. That's what I've done, and I'm also growing potatoes and beans this year to get used to being more self sufficient.



posted on Mar, 5 2008 @ 05:56 AM
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I think Gerald Celente is developing an end-times thread in his futurism.

Packaged for his mainly corporate audience, he comes off as something of a go-to guy for the (exciting idea to some of his audience) that war is endless, but somehow in this incredibly expensive chaos (both financially and environmentally) we will (or they will) all still be living spiritual lives in high-tech environments.

Kool Aid.





[edit on 5-3-2008 by undermind]



posted on Jul, 19 2008 @ 11:53 PM
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Originally posted by resistor
Are you familiar with the new credit laws that went into effect last year? I wouldn't be surprised to see 'work camps' for debtors after tshtf. Now that you've got some income freed up you can put it towards long term storage food and some real money, gold and silver. That's what I've done, and I'm also growing potatoes and beans this year to get used to being more self sufficient.


I wish I listened to you. Now I think it is too late for me. This economy seems doomed in a couple of months. (or sooner)



posted on Jul, 21 2008 @ 12:09 AM
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It's never too late to do what you can. The problem with paper 'cash' is that it's subject to devaluation (inflation) as we're seeing with the dollar now. It's not nearly as bad as it might get, so there's still time to improve your situation. Just do what you can now to provide for your immediate future. I wouldn't be worried about debt at this point, there'll be plenty of time for that if the worst doesn't happen. Plan for the worst, hope for the best.



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