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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: the navigator who wrote (108863)6/26/2010 11:18:25 AM
From: RetiredNow1 Recommendation  Read Replies (3) of 110194
 
It doesn't happen like that. The dollars are just devalued and your debt is devalued along with it, because it is owed in those dollars. Keep this in mind too. If you have a loan for 4.8% and you have the money to pay off the house and choose to keep that in the bank, then if we have inflation in a few years, you'll find CDs that will pay you far more than 4.8%. In Carter's day, you could get 1 year CDs for 12%. So which do you think is smarter, paying off a loan where you pay 4.8% and get a tax deduction or putting that money in a 12% CD in an inflationary period?

So the common wisdom would be to hold on to your cash and wait for inflation. Keep your cheap loans and keep taking the tax deduction on it.
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