Originally posted by ImaFungi
i know this is not the solid input you were looking for, but first thing i thought of........ you are suggesting people look past the repercussions of
debt from loans in the hope the world will be destroyed and the debt from loans will be void?
edit on 26-2-2012 by ImaFungi because: (no reason
caring nothing for the law,, as long as those numbers get bigger.....
edit on 26-2-2012 by ImaFungi because: (no reason given)
This is the type of comment I wanted.
We are not looking past the repercussions of debt. This is why I suggested taking out as much as deemed affordable, like an optimal capital
structure. For instance, many bankers will not lend to you unless its only about 30 % of your income. Chances are you cannot afford it over that
amount. Thats why I recommended that 30-35% range, so John could still cover his expenses should the stuff not hit the fan. Besides, I think gold
usually appreciates at a rate faster than 4 or so percent that home equities are at, so you would be making money, have a discount on your tax code
(through interest expense paid at your current tax rate, which makes the loan essentially cheaper to a rate of int%*(1-tax rate), and should it hit
the fan, your debt is worthless.
For the thread, lets define "stuff" as bug out material, and "extras" as things like I-pads, nintendo Wiis and Louis Vuitton purses.
Should it all NOT hit the fan, you have the stuff, the precious metal and oil investments, which can still appreciate at a rate faster than your 3-4%
interest loan, and can still afford your monthly mortgage payments with ease.
I think personally the fiat currency will hold for a bit, and the dollar and treasuries are actually extremely strong right now (although my
investments would be in commodities right now, they are scheduled to outperform this year as denoted by JP Morgan and a few other big players). But
these currencies are easily inherently manipulated and I believe people should not necessarily hold their investments in this. Investments in stocks,
energy, commercial real estate and commodities are more my style. Holding stacks of cash doesn't return you anything, but if SHTF, Johnson and
Johnson or agg products will be all the rage and they can sell it for a ton, which they might, and you get a chunk of it.
This also follows the law, you could pay back your debt. You are legally required when you sign up for the debt to pay it back in a certain currency.
They dont tell you to pay back 250k in dollars, or should that dollar depreciate, 250k would of present value dollars in gold, euros etc. your debt
is always denominated in $$, regardless of how worthless they become. It sticks it to the bank, lending presently valuable dollars and receiving
back worthless dollars. Its called currency risk, and banks get compensated for it and hedge it internally.
And not caring for the debt, well, not true, but the bank takes that risk on and thats called credit risk
. I personally do not have many loans
out and mommy cosigns on them so the rates are low