Use One Ounce of GOLD to pay off the HOUSE
My existing home mortgage loan is denominated in US Dollars, maybe I can pay it off with an ounce of gold ($140K/oz).
Use 10 Ounce Bar of SILVER to pay off my car.
My existing car loan is denominated in US Dollars, maybe I can pay it off with a ten ounce bar of silver ($1800/oz).
(This is just a theory. Don't beat me up too bad.)
PRICES DOUBLE
Consider, if one ounce of Silver ($18-$20) can buy a bag of groceries ($18-$20) today, what would it buy if hyperinflation kicks in, prices double, and also the price of silver doubles.
I can still get a bag of groceries($40) for one ounce of Silver($40).
Let's just speculate that hyperinflation kicks in and over the course of a few years everything costs double as it does today.
So, for example prices double . . .
House: $140K goes to $280K - same house, same market, no other factors
Vehicle: $50K goes to $100K - brand new domestic model sports car
Amusement Park Ticket: $100 goes to $200 - same park, etc.
Movie Ticket: $10 goes to $20 - same theatre, etc.
Milk: $2.50 goes to $5.00 - same store, etc.
Eggs: $2.00 goes to $4.00 - same store, etc.
Bag of groceries: $20 goes to $40 - general base items, bread, milk, butter, etc.
PRICES INCREASE 100-FOLD
Let's head toward a 'potential Mad Max' SHTF scenario where the US Dollar drops along with other currencies, worldwide, fiat and cryptos. Prices increase 100-fold. Precious metals increase 100-fold.
A new car may cost $5,000,000.
A house may cost $14,000,000
A mansion may cost $100 Billion
A bag of groceries may cost $1800.
My existing car loan is denominated in US Dollars, maybe I can pay it off with a ten ounce bar of silver ($1800/oz).
My existing home mortgage loan is denominated in US Dollars, maybe I can pay it off with an ounce of gold ($140K/oz).
CRAZY - - NO
Why is this theory reasonable? Because in 1913, the US Dollar was worth a Dollar.
Compare the purchasing power of the Dollar today versus 1913.
It's not 100-fold increase in price over the past 100 years, but it is not that far off.
In Mad Max - SHTF scenario, dollar plunges hyperinflation - what is the stable form of money?
Gold and Silver are money.
- by @goldkey
"maybe I can pay it off (mortgage) with an ounce of gold" I worked hard, for a year, to buy, a one oz. American gold Buffalo, in case this ever happens. In the meantime, I like looking at this beautiful coin. Going to miss it when, SHTF. Won't miss the mortgage, thought.
Yup! I'm glad I'm not alone here on this.
I have fractional ounces to make up that one ounce. These days, I'm saving now for that Full One Ounce - It may be the Gold Buffalo, which is a beautiful coin. I also like the latest American Liberty Gold Coin.
Thanks for the comment and Keep Stackin' Em High ! ! !
Great advice @goldkey, the whole world is going Zimbabwe.
Thanks. Zimbabwe inflation rate was astronomical, the highest record shows month-to-month inflation rate of 79,600,000,000%. (https://www.cato.org/zimbabwe) Hopefully, the USDollar won't go that fast.
On the other hand,we see Venezuela has had 800% inflation rate (year-over-year) in February 2017. The IMF previously predicted it to be 1600% inflation rate.
Thanks again for commenting.
Yes I know about the disaster in Zimbabwe, what a human tragedy my friend.
I have a collection of their notes, here is the link if you want to have a look, cheers.
https://steemit.com/silver/@silverbug/want-to-see-what-hyperinflation-looks-like
Thanks,that post is very helpful and informative. I didn't know that much about Zimbabwe, definitely not the root cause of their troubles. It was a tragedy!
Those prices are possible, but there will be a point in time where silver and gold will be over values, which will be time to purchase other hard assets which people will trade for your existing stack
Right On! @rollingthunder! That's absolutely right! We are so far under valued today, that most aren't thinking about increasing to the point of being over-valued. When we hit the high, I'll be happy to acquire hard assets.
Thanks for the comment!
Preferable, existing farmland/timberland, housing, businesses, and maybe a desperate seller in need to part with their bright red Ferrari, LOL
I can't wait
Yes, I can't wait either - but I've been waiting a loooong time :)
agreed ... upvoted
Thanks for the comment and upvote. I'm glad there's some agreement :)
Moral of this story is hold anything but fiat toilet paper, because its going down the pan with the rest of this debt based system. Great thoughts there goldkey
Thanks for the comments and the summation of the moral of the story.
Nice post 👍🏼
Thanks @kp138 :)
Thanks :)
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Your's is an interesting Theory, but it's one of the older ways of thinking... Sure, it would be nice if you can start earning many times extra at work while your home mortgage remains the same... The same thoughts crossed my mind too... But realistically, it's only wishful thinking for those who own Gold and Silver... I don't want to live under the Terms of the Central Banks, and I don't want to experience Hyper-Inflation... Very few people own Gold and Silver, so few would benefit in the Case you're stating above... Plus, the National Debt won't go away with Hyper-Inflation Printing... The Federal Reserve (Debt) Notes will not only have little Value, but you'll jump to a Tax Bracket that eats away at your Spending Power... My Theory, removes the Federal Reserve Notes, puts you in a lower Income Tax Bracket with increased Purchasing Power, and if you happen to be holding U.S. Coinage, you can still pay off your Mortgage and Car... I feel that most people have some Pocket Change laying around their Homes and Cars... How many of those People own, even a tiny amount of Gold or Silver...??? As I said earlier, your Theory has crossed my mind a time or two... If you could make a Chart, showing the benefits of "both" of our Theories, I think you'll end up favoring mine...