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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (108809)	6/26/2010 10:43:23 AM
From: the navigator	1 Recommendation Read Replies (3) \| Respond to 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...

To: Skeeter Bug who wrote (108809)	6/27/2010 10:27:36 AM
From: Hawkmoon	1 Recommendation Read Replies (1) \| Respond to of 110194

I think there is a good chance we see more of the same (economy deflates, government inflates essentially equaling out) until we get a rapid collapse* of the system.* If we REALLY BELIEVE that the global economy is utterly controlled by a cabal of bankers and financial illuminati, why would they want to further inflate a credit bubble that is reaching capacity (look at CDS rates on sovereign debt)?? It stands to reason that they would want to buy CDS (gradually) and DEFLATE assets from current levels, foreclose on those assets (since CDS holders have priority in Bankruptcy now), and THEN INFLATE the economy again and see those assets reap a windfall for them. That's how I would play the game, were I part of the illuminati.. ;0) But deflation takes time.. First you have to stifle demand by creating massive unemployment and economic uncertainty. Hawk