What happens to your debt if the dollar fails

Hello all,

First and foremost, I am not a financial advisor and this is not financial advice.

I've always wondered what would happen to your debts if the dollar hyper inflates, I've been wondering this for multiple years. If the dollar hyper inflates, I know how to make bread and if I can sell bread for $100 a loaf or I can sell a dozen eggs for $20, that $1500 house payment seems very acheivable. But is that how it's going to go down?

Today there have been several videos posted on this topic, I'm not sure why this is all of a sudden a talking point today but I'm glad people are talking about it. I'll leave some comments after the videos.

The first one is by a YouTuber named Joe Brown and the second is Glenn Beck with guest Carol Roth. Enjoy!





From Joe Browns video there are three categories of debt; credit card, auto and home. I personally carry zero credit card debt, I use them but sparingly and pay them off quickly. If you are carrying a lot of credit card debt, according to Joe Brown, you need to pay that off ASAP as the rates are not fixed and could go to 50, 70, 100%!

The interesting thing about both videos linked, both Joe and Carol Roth say in the event of hyper inflation, you're in a good spot owing money at a fixed interest rate. Your payments will stay the same while your income will probably hyper inflate with the economy. I consider myself a super saver and I've always made extra payments on my mortgage, I'm considering just making the minimum payment at this point. Number one, I can make more with a 5% money market account with the money right now and two if we do hyper inflate, my debt will be easier to pay off in the future.

Let me know what you folks think! Thanks in advance.

a reply to: litterbaux

I have thought about this one a few times.

I do not see what we would suspect or call "debt forgiveness" even in a hyper-inflation spiral. I would bet 10 to 1 that they will have a scheme to "restructure" debt into a new monetary system....

Say a "reset" of debt as they would the currency if it works for the bankers better. They will ratio it out.

a reply to: infolurker

Joe covers this aspect. My understanding of what he said, summed up is, your 250k mortgage is nothing compared to 31 trillion in debt. The biggest benefactor of a debt jubilee would be the federal government. I'm not saying your 250k mortgage would be totally forgiven but in real terms you might make 250k a year in a hyper inflation environment at your current 100k a year job.

Maybe I misunderstood what he said though.

a reply to: litterbaux


Joe Brown is great.
I wouldn't use him or other youboob channels to give me financial advice.

Well I am locked in at 1.9% on my mortgage for another 4 years so I should be good to go! No other debts. Odds are according to “the great reset” the crashing dollar and other currencies will be used as a scheme to usher in a new global digital currency. I assume that once the major currencies get into oblivion they will roll out the digital currency to play saviours. Any outstanding debt will be ratio’d/converted into the equivalent/acceptable value of the new system. You will go on paying with x instead of y. If you’re unable to pay or unwilling to pay with x you default.

a reply to: litterbaux

When this does happen all Property and possessions go bye bye. They own whoever "owes them." This will give them the right to come and "seize by force" and take families from their homes and "relocate" us. We all owe. One way or another.
Trapped.

All part of the plan.

In a hyperinflationary environment the beneficiaries would be those who have debt locked in long term at a fixed rate like a mortgage. Debt that is not fixed like a credit card would see rising payments.

Debt with fixed rates would be paid back with inflated dollars meaning you can payoff the debt quicker. It is like if you originally were making say $150k and have a mortgage payment of $3k/mo. Now you are making $250k but you are still paying back the $3k/mo. The money you earn increased but the cost of the debt did not....

This is why real estate debt is often used a hedge against inflation.

a reply to: Allaroundyou

You should always do your own research, Joe Brown is a great channel to start down the rabbit holes. I don't recall him ever giving financial advice, it's just information that you can use to further your understanding of economics.

a reply to: Athetos

That's fantastic! Good for you!

How did you get that good of a rate? Is it a balloon loan? I thought I had it good with 2.5%!

a reply to: AOx6179

If you are ill positioned when it happens, sure. Keep in mind, someone is on the receiving end of you losing your things. The banks don't want to repossess your car, camper or boat. They get pennies on the dollar at auction.

They do want your house though so make sure you keep making that payment even if you have to hang out behind Wendy's to make the payments.

a reply to: litterbaux


Maybe you should do some digging.
I'm not here to do your work for you.

a reply to: litterbaux

All we have to do is look back in history, the US and the world.

Debt doesn’t go away but debt is fantastic in a hyperinflation scenario.
The people that will hurt the most are the savers!

With hyperinflation debt will seem little because everything else in reference to it is so high.
What is 100K in debt if a dinner out is 5K etc…(just an example)

originally posted by: litterbaux
a reply to: AOx6179

If you are ill positioned when it happens, sure. Keep in mind, someone is on the receiving end of you losing your things. The banks don't want to repossess your car, camper or boat. They get pennies on the dollar at auction.

The do want your house though so make sure you keep making that payment even if you have to hang out behind Wendy's to make the payments.

That last line got a 😂 outta me.

I agree, and didn't mean to sound like I wanted to cause panic by coming in and hitting it with a scalpel and bailing.
I was thinking about the "end game." I'm not a money guy. I own my home. My only debt is medical. But I see that being used against us as well.


Just a strong hunch.

a reply to: Edumakated

This is what the two videos say too. It makes logical sense.

Just my crazy brain thoughts, I wonder if there is some loophole in the fixed rate mortgage contract that can somehow nullify the fixed rate in case of a bank failure. I know if your bank fails the loan will get sold to another bank and the fixed rate is supposed to be held fixed but does anyone read all of the fine print? It's probably air tight but I don't trust the banks, at all.

If they can somehow sell the loan and force you into a higher rate, a lot of people would be screwed.

originally posted by: litterbaux
a reply to: Edumakated

This is what the two videos say too. It makes logical sense.

Just my crazy brain thoughts, I wonder if there is some loophole in the fixed rate mortgage contract that can somehow nullify the fixed rate in case of a bank failure. I know if your bank fails the loan will get sold to another bank and the fixed rate is supposed to be held fixed but does anyone read all of the fine print? It's probably air tight but I don't trust the banks, at all.

If they can somehow sell the loan and force you into a higher rate, a lot of people would be screwed.

I've been a mortgage banker for 20 plus years. Im not aware of any way the terms of a mortgage can change. Mortgages can be modified with both bank and consumer consent. This most often happens in preforeclosure situations.

A loan being bought or sold doesnt nullfiy the original terms.

It will be replaced with some other type of digital currency or some kind of paper currency you're not going to be debt-free if it collapses.

I suppose (but I will risk it anyway) that to me it seems that people forget to shift their perspectives when thinking of this stuff. Everyone automatically assumes that debt is about the 'owing' part and disregard the 'lending' part.

Debt serves a purpose. The "money" isn't the purpose. It's the metric... the inch, or kilogram, or drams.

How we use the currency is only half of the issue.

Banks NEED us in debt. Debt is the entire paradigm of the 'game' of the banking monopoly.

They will never simply forgive debt. Unless they admit it's not "real."

originally posted by: Edumakated

originally posted by: litterbaux
a reply to: Edumakated

This is what the two videos say too. It makes logical sense.

Just my crazy brain thoughts, I wonder if there is some loophole in the fixed rate mortgage contract that can somehow nullify the fixed rate in case of a bank failure. I know if your bank fails the loan will get sold to another bank and the fixed rate is supposed to be held fixed but does anyone read all of the fine print? It's probably air tight but I don't trust the banks, at all.

If they can somehow sell the loan and force you into a higher rate, a lot of people would be screwed.

I've been a mortgage banker for 20 plus years. Im not aware of any way the terms of a mortgage can change. Mortgages can be modified with both bank and consumer consent. This most often happens in preforeclosure situations.

A loan being bought or sold doesnt nullfiy the original terms.

I wonder if a Biden EO would rewrite the rules? Or, maybe raise property/land taxes so high nobody can afford to own. Then our benevolent leaders could do a 'reverse mortgage' type thing to save people from loosing their homes and within a generation there would be no privately owned homes.

More and more private homes are now in the hands of corporations. I won't sell the gubment short; I'm sure they've got a plan to cover all the bases.

I locked in literally a month before the rate hike. The lowest mortgage interest rate my bank offers now is 6%

a reply to: litterbaux

a reply to: Maxmars

I think you are absolutely correct. The entire system is based on debt, everyone knows this.

Think about all of the banks in your area, what do they produce to have nice branches and office buildings? They don't produce food, they don't fix cars, they don't distribute products, ect ect. The two things they do is grant you debt with an interest payment and invest your money into the markets (bonds/treasuries) to collect interest.

The banks are a multi level marketing scheme with pyramid scheme peppered in. So how are they doing now? The bonds have lost a ton of value with rates going up while at the same time nobody is taking on new loans. Not only that but lending restrictions are starting to ramp up so even if you wanted a loan you can't get it.

They have painted themselves in a corner and I figure very soon they will start drinking the paint.