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If inflation goes out of control - what happens to our personal debts?

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posted on Sep, 21 2008 @ 05:41 PM
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So first off - I just wanna say I don't know squat about economic mumbo jumbo, so don't roast me if this is a stupid question but...
Let's say next week hyperinflation spirals out of control. This is ofcourse terrible news and all that but it got me thinking: I'm still $25,000 in debt in student loan payments.

Will I be able to take some sort of equity - say my paid-for crappy old car - sell it on e-bay for $50,000 and walk back to the loan office and go "here ya go! ...suckers!!" and then buy myself a six pack and a lollipop with the change to celebrate?

Are they allowed to adjust loans based on inflation rates? I mean I guess they can change interest rates but even if that went up to 100% - I'd just skip the six pack and the lollipop.

I'm assuming my logic here is flawed but man it's nice to imagine this is one way us poor bastards could get back at the big mean banks.

[edit on 21-9-2008 by mc_squared]




posted on Sep, 21 2008 @ 06:31 PM
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Unfortunately it doesn't work that way.

The only impact on your loans will be that your ability to pay it off will get tougher because you have less to spend on things you must buy (food, gas,etc.). Okay, I see where you are thinking that your garbage car would be worth more (only meaning it would take more dollars to buy it), but in all honesty no one will have that kind of money to spend on a car (not enough to cover your student loans) so it's pretty much moot.



posted on Sep, 21 2008 @ 07:33 PM
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Hi Relentless, thanks for the response



Originally posted by Relentless
Okay, I see where you are thinking that your garbage car would be worth more (only meaning it would take more dollars to buy it)


This is what I'm talking about though - money is nothing unless it's attached to something with some sort of tangible value. But a loaf of bread is worth a loaf of bread whether it costs 50 cents or $100,000.

A college education or a house is worth much more than a loaf of bread, but if your student loan or your mortgage was negotiated at a certain amount of dollars then that's that - you owe that amount of dollars, it doesn't matter what those dollars are worth now.

The car thing was just an example for the sake of having an anecdote but I think you see what I mean right?

If suddenly the rest of my mortgage payments are equal to 2 loaves of bread - I'm skipping lunch for a week.



posted on Sep, 21 2008 @ 07:41 PM
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Originally posted by mc_squared
I'm still $25,000 in debt in student loan payments.


You'll probably qualify for debt forgiveness once the war with mainland China and the middle-east starts and you are drafted.



posted on Sep, 21 2008 @ 07:45 PM
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reply to post by In nothing we trust
 


And what are they gonna do when EVERYONE refuses? Throw us all in jail?

I call top bunk!



posted on Sep, 21 2008 @ 07:48 PM
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Originally posted by mc_squared
And what are they gonna do when EVERYONE refuses? Throw us all in jail?


Execute you of course.




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