Massive Withering Inflation: Is this the only way out of the sundry national crises?
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This is the second time we have agreed on something so purgatory already has frozen over
The escalation clauses are a really big deal.
It's shocking to me, that people would buy a home, but then totally refuse to spend $75 to $200 to have a real estate attorney review and explain all of the loan documents.
Some of these escalation clauses, when they kick in, start pegging to the prime rate. For those who don't know, Monetary Inflation in the 1970s resulted in a 13+% Prime Rate in an attempt (which failed) to decrease the money supply.
The circumstances today are very different. If the Prime Rate was set at 13+%, I'm certain it would have more of impact now, than it did in the 1970s.
It's shocking to me, that people would buy a home, but then totally refuse to spend $75 to $200 to have a real estate attorney review and explain all of the loan documents.
Some of these escalation clauses, when they kick in, start pegging to the prime rate. For those who don't know, Monetary Inflation in the 1970s resulted in a 13+% Prime Rate in an attempt (which failed) to decrease the money supply.
The circumstances today are very different. If the Prime Rate was set at 13+%, I'm certain it would have more of impact now, than it did in the 1970s.
Agreeing...
Mircea
Now a tax on the balance owing on debt should side step that escalation clause...
Another reason why we can't raise the prime.
13% prime now with the debt load we are carrying would cause an implosion. Economically speaking. Tax the balance owing on debt. rain in inflation without tripping those clauses. But they would cry foul. nothing quite like changing the rules in the middle to make people cry.
on a side note. Greenland's ice sheet is on an exponential growth curve in ice flow. Short estimate is 20 years to 23 foot rise in ocean level. (My guise is about 25% chance of that happening.) More like 50 to 100 years. That would put a lot of banks collateral underwater. so the loans would be too. Time to sell sea level property. And cut your exposure to harm from a 23 foot sea level rise. As when it comes to bank runs he who panics first panics best.
It's shocking to me, that people would buy a home, but then totally refuse to spend $75 to $200 to have a real estate attorney review and explain all of the loan documents.
Some of these escalation clauses, when they kick in, start pegging to the prime rate. For those who don't know, Monetary Inflation in the 1970s resulted in a 13+% Prime Rate in an attempt (which failed) to decrease the money supply.
The circumstances today are very different. If the Prime Rate was set at 13+%, I'm certain it would have more of impact now, than it did in the 1970s.
Agreeing...
Mircea
I know for a fact, 100% percent that my mortgage payment will NEVER increase - even if inflation reaches 10,000%.
If we do have a bout of hyperinflation, you can beat I'll pay it down as fast as I can with devalued dollars as quickly as they can - if they try to pull some crap that I need to pay more than was was specified in the contract then they've got another thing coming...lol.
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