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Taking on personal debt?

  • Yes

    Votes: 11 9.5%
  • No

    Votes: 42 36.2%
  • Not Yet

    Votes: 4 3.4%
  • Too Risky

    Votes: 7 6.0%
  • Stupid Idea

    Votes: 52 44.8%

A fiat collapse and personal debt

7K views 43 replies 29 participants last post by  TexasTooner 
#1 ·
Out of curiosity, is anyone so confident of a coming fiat collapse/hyperinflation that they are taking out personal debt in hopes that that debt will be almost worthless or significantly easier to pay back?
 
#13 ·
Stupid post...



No. They may raise interest rates, but they cannot arbitrarily raise your debt amount.

Unless the laws change, they will have the same legal recourse. Send it to collections. If you're out of work and the phones are cut off. I guess they can mail you if you haven't been evicted. If your homeless, they can write off the debt as a loss.

I highly doubt they are going to repo food. If they can even find you.



Sierra Dave
 
#8 ·
So many people are going to be boned...

If hyperinflation hits. The vast majority who aren't in the prepping scene. They cannot throw everyone in jail. Methinks so many people defaulting will be the end of any financial creditor. The economy will be so shot, they won't be able to pay for debtor prisons.

My moderate approach is to get a years preps for maybe $1k and then make $50 monthly payments or whatever it is.

I would rather you have food to live than gnaw on your zero balance credit statements. With the current uncertainties of the global financial situation. I don't think it's prudent to wait and try and build up slowly. A little every months is going to be too late. IMHO.


Sierra Dave
 
#10 ·
Some people have no need to be in this forum.

1. taking out debt keep the system going(money creation)
2. paying off debt takes money out of the system(money destruction)


Thus if everyone lived debt free, there would be no money in the system and we would still owe.

Wish people would get a frickin clue.
 
#14 ·
***************************

Wish you would get a clue, too. LOL And, maybe, you might be the one who has no need to be on this forum.

Piling up a big mass of debt is a fairly recent idea. America did just fine, for a very long time, before the appearance of the credit card and (later) the idea that everyone "needed" a 4,000 sq ft McMansion, and a big honkin' SUV with lots of cup holders, etc. Coincidence???? Probably not.

People used to believe in living within their means and "saving up" to get the things they wanted. We also didn't have a national debt measured in trillions of dollars. And the system worked very well.

Now, with staggering amounts of individual credit card debt, the "system" has morphed into a monster with over 75% of the GDP dependent on consumer spending. Any way you want to look at it....that is crazy.
 
#15 ·
I don't like debt, but there is reasonableness. Seriously are you guys going off on how insane it would be to have $1k in debt that you have a plan to pay off. That seems like a silly thing to be upset about. This guy isn't talking about buying a hummer or a McMansion no money down. He is talking about borrowing about $1k for things he believes he will need in short order.
 
#18 ·
No debt for me. I like to prepare for all possibilities, including the real one that we WON't have hyperinflation.

I am amazed though at how people seem to be unaffected by their debt load, even continuing to spend like made even after bankruptcy. There seems to be no moral hazard to running it in the red. That goes for governments, companies and individuals.

Maybe I'm the fool for not spending other people's money :confused:
 
#20 ·
I voted "Stupid Idea" rather than "No," because I think you shouldn't need to take on personal debt if you manage your finances well. However, I can see some circumstances that may warrant such action.

As SD noted, the notion of taking on debt to prepare isn't black-and-white. People take on a lot of debt to invest in their future in other ways... say, dumping out-of-state tuition money and student loans into a Liberal Arts degree. So, why not do it for preparedness items?

Of course, if you can't manage your finances well, you should probably avoid running up a credit card to buy preps. You may also be better off taking out a small loan with a local bank, since credit cards operate month-to-month and their interest rates are atrocious.

I certainly would NOT get into more debt that I could manage though. I think a lot of people are balking at the OP because they are savers and ascribe to the "debt = slavery" school of thought.
 
#24 ·
I don't quite get the logic of your question. How would debt be significantly easier to pay back? Your debt wouldn't be worthless. You would still owe the bank, but your cash in hand would be worth less. The prime interest rate would be raised and then your debt interest would be higher. Plus everything else you purchase will cost more. This doesn't make much sense to me. Why even consider this approach?:confused:
 
#27 ·
If it all possible, save your credit card limit for emergencies. You'd be better off off buying essentials a little bit every week as they come on sale. If all you can afford is $50 a month then so be it, get $50's worth of preps, but save them, don't use them. Over a period of time your supply of stuff will add up. The big thing is to look for stuff on sale or that you can get with coupons or at thrift stores. Not everything is on sale at one time, so this is why it's wise to spread your shopping out over time. Start with a set of shelves and fill it up...then add shelving as needed. Don't forget water and tp. You can find portable water jugs at the thrift stores cheap.

Save your credit card for things like car repairs, medical emergencies, helping out desperate friends in their time of need.....
 
#29 ·
Anyone borrowing money to buy preps either knows something I don't about the future of the American economy, or they don't know squat about the past. Either way I choose not to borrow and I advise folks to avoid it if they can.

If I were just starting out and flat broke, I might borrow what could repay in six months, but I would sweat those months.
 
#35 ·
I would really like to see what you could buy and pay for in six months being flat broke (and I assume no job either if you are flat broke).

So you guy's are saying don't buy a home (who has the cash for those these day's) or a car if needed or anything else unless you can pay cash. It would be real easy to do that but what if the TEOTWAWKI doesn't come in our life time as it hasn't for many that have passed before us. SHTF can happen anytime. It is best to be prepared. If I have to carry some debt for my BOL or BOV then so be it.

There is a big difference between the SHTF and TEOTWAWKI. I have been through the SHTF several times due to natural disasters. IF TEOTWAWKI happens do you really think the banks are even going to exist after that. Who is going to know what you owe and to whom.
 
#33 ·
I think even assuming hyperinflation is too risky. Remember that the dollar has been one big, international social experiment to the people on top. You really don't know what kind of crap they'll pull next with us as the guinea pigs. Given that this is a prepper board, and one of the most important aspects of prepping is to prepare for as many eventualities as possible, I would say take no debt at all into whatever comes if at all possible.
 
#34 ·
i expect that if there was a date written in stone when a true and immediate collapse would take place some people would gamble on it and try that. On the other hand, i suspect that most people here are doing the opposite, and want to be beholden to as few as possible. interesting for speculation purposes and "what if's"
stupid idea in reality
 
#40 ·
IF we go into hyperinflation, any debts incurred NOW, will become insignificant and insanely easy to pay then, assuming your pay is adjusted to the new monetary value.


example: you pay $1000 a month for your mortgage now, in hyperinflation the bank cannot change the contract, $1000 could be like $100 assuming your job pays you ever increasing wages to equal your salary's worth. your mortgage is still $1000 a month, but now you are being payed $30k a month. of course it costs you $5000 to fill your gas tank and $500 for a loaf of bread.
 
#42 ·
Deflation is my economic fear.

Deflation is the FEDS greatest fear and what QE/QE2 was supposed to banish. Its in full blown force, look at house prices (down) for example, your(my) income (down), interest earned on savings (0% almost), new cars (down/rebates).

The ability to pay debt in a deflationary environment is going to be a problem/impossible for many/me.

Food commodities will also be beaten down (deflation) from now until the Nov 2012 elections for political reasons.

Expect renewed attacks on the minimum wage (deflation).

Limit debt until economic directions become clearer or we have real inflation in the things we own.

IMHO
 
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