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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Skeeter Bug who wrote (108809)	6/26/2010 10:43:23 AM
From: the navigator	1 Recommendation Read Replies (3) of 110194

skeeter... i would be devastated if the criminals in power stole my wealth such that i could no longer pay off my house - and i'm 30 year fixed at 4.75% (perfectly positioned for 70s inflation - but i don't think it is likely we get it). we are similarly positioned (for 70's style inflation), having a 15-year fixed rate 4.875% with about 8 years left on the loan. my thinking was that if our money is devalued (say 10 to 1 - $100 become $10), that debt would be equally devalued. for example, if we have $100,000 in the bank...bank closes...bank re opens with "new" dollar and our balance is now $10,000. we owe $100,000 on our home in "old dollars." when the old dollars get thrown our and the new dollars become legal tender, what happens to the money owed on the loan? do we owe the old dollars, or the new ones? do you see a scenario where the money would be devalued, but the debt would not? just trying to think things through here...

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