Will They Index Debts?

By: Tom Chatham

For those keeping up with the economic game of bumper cars we are playing, it seems likely that money printing will continue to the point of possible hyperinflation at some point. It is not a foregone conclusion but it seems likely. In that event what is the individual to do?

Some that have seen this possibility have come to realize that holding large amounts of debt before hyperinflation hits would allow them to pay off this debt with basically worthless currency and come out way ahead in the wealth game. That works in theory but how about in reality?

The bankers and politicians control the money supply and are even now cashing in their paper wealth for tangibles that are actually worth something. These people want it all and you can be assured of one thing. They will take the people to the cleaners before they are done with their redistribution of wealth.

Some may find themselves in a position to come ahead during any hyperinflation but they will be few and far between. The majority will not be allowed to come ahead at the bankers expense. The bankers after all created all of this easy credit that everyone uses and the sole purpose is to use it to separate the population from the hard assets that exist.

For those with substantial wealth accumulated, the first priority is to steal that paper wealth from the people. With that wealth gone they will not be able to preserve the hard assets they have that are not fully owned yet. Once that paper wealth is gone the bankers will need to inflate the money supply and force the majority into default on their assets. In a hyperinflation paychecks will not be able to keep up with rising prices and people will slowly fall behind until they lose it all.

For those that continue getting paid every week, the inflating pay will eat away at the debts faster and faster. To avoid losing real money, the bankers may index debts in order to prevent losing the leverage they created from nothing. When you index you basically increase the value of the debt at the same rate as inflation.

For those that say this will not work because they have a contract with the bank fixing the payment I can only say, do you really think these people will let you get over on them. These are the people that own the government and change the rules on a daily basis when it suits their needs. All that needs to happen is the government pass a law allowing the banks to index all debts and it will be a done deal.

I am not saying this will happen, but it could happen so you need to think about that and incorporate it into any plans you make to get through a currency collapse. If your plan is simply to pay off debt with devaluing currency and they index, you will not be in any better position than everyone else.

One way some will come out ahead is by having their excess wealth in precious metals. These assets will increase at or above the rate of inflation and allow the holders to maintain their buying power. The U.S. called in the gold in 1933 and could do it again but it is not likely. The main reason is that in 1933 gold was still part of the money supply and was held by the general population in large amounts. Very few people hold gold today and most of the ones that do are the very people that make the laws and they will not shoot themselves in the foot.

They may place a tax on any precious metals that are sold and use that as a way to control the smaller holders of metals but a house to house confiscation is not likely unless they just happen to target you for some other reason and find some in your possession and decide to take it. Ultimately, any paper currency only has the value that those printing it will give you. Metals can be used worldwide and have universal value. That is what makes metals more appealing than paper.

If currencies are destroyed in the future you can be assured that the perpetrators have a plan in place to prevent the majority from profiting from it on any large scale. Those that create the credit only care about owning everything they can get their hands on. Their greed knows no limits. With ownership of all assets comes complete control of the population. That is the end game for many. For those that see danger on the horizon it only makes sense to look ahead and plan for any contingency that may cost you everything you have.

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Posted on January 21, 2015, in Commentary, Economics and tagged , , . Bookmark the permalink. 3 Comments.

  1. “Some that have seen this possibility have come to realize that holding large amounts of debt before hyperinflation hits would allow them to pay off this debt with basically worthless currency and come out way ahead in the wealth game.”

    That assumes that either they will continue to make an income, and that the income will keep up with inflation (the last 20-30 years say different) allowing them to do this. Personally, I wouldn’t pin my hopes on it working out that way.

    I don’t know if the bankers will index debt or not. I wouldn’t be surprised if they did….in the interest of “fairness”….cause the inflation in the first place, then don’t let the holders of debt do exactly what the Federal govt has done for 100 years….pay it back down the road with more worthless ‘dollars’.

    The key is avoiding debt in the first place. Don’t buy stuff you can’t pay for, or in the case of a big ticket item like a house or car, pay it down as fast as possible. It’s much harder for some third party to take your assets if there isn’t a lien on them.

    AND if you get to the point of owning your home debt free, definitely consider putting some precious metals aside that can cover your property taxes. Lot of folks in the last Great Depression lost the farm due to a fairly small property tax, and they simply couldn’t come up with hard cash to pay it.

    • I think property taxes will be one way they try to get the fully owned properties away from people. Those that own real estate but don’t preserve some of their wealth from currency destruction will have nowhere to turn but the gun cabinet when the government comes for their annual tribute and I expect to see some of that when the time comes.

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