IF You Expect INFLATION To Heat Up You Should Be Borrowing All The $$$ You Can Today...

[Blackhatjack]

... and You Should Convert Today's Dollars immediately into necessities that will hold their relative value in the new economy.

Dollars will be worth less and less, and therefore paying off debts incurred today should be easier using the additional dollars you will collect in selling off those necessities in the future.

Am I Right?

[MidwestTransplant]

1. Not if those "necessities" you mention depreciate in value

[rockymountaindem]

2. Stockpiles of toilet paper will never depreciate

Perhaps the most conservative investment there is.

[Yupster]

12. You are right

Inflation is a nasty thing for a nation.

It has long-term effects because it teaches people all the wrong lessons.

Don't save any money - it will only fritter away its value.

Borrow as much as you can.

Spend each dollar as soon as you earn it.

[DJ13]

3. You would be right "IF"

If wages would reflect the increasing inflation.

But I dont think they will, its an employers market with 10% unemployment, so they will squeeze their employees and use the inflation to increase profit margins.

[Statistical]

4. In theory you are correct.

High inflation favors the debtor at the expense of the lender.
Low inflation favors the lender at the expense of the debtor.

Still I wouldn't start praying for hyper inflation the downside outweighs that silver lining.

[Wilms]

5. At what percentage?

Actually, this sounds vaguely like the way so many got in over their heads in mortgage.

Inflation was going to make these people rich.

[Art_from_Ark]

6. I wouldn't get into debt

You're assuming that wages will keep pace with or even exceed inflation. What happens if the interest rates go up due to inflation but you lose your job or have to take reduced hours/wages? You wind up with a bigger debt that maybe you can't pay.

[trackfan]

7. Yes.

But I doubt there is any inflation coming. Inflation would be a cure for a debt crisis because it would destroy debt. It would also destroy a lot of wealth, so the wealthy are doing everything they can to make sure inflation is the last thing that happens.

[Yupster]

13. I don't think we can have inflation now

with demand as low as it is.

I think it has to come in 2-3 years though as its the only way to handle the kind of debt the US is piling up each month.

[abelenkpe]

8. So what are you gonna

do if the next few years bring nothing but deflation?

[BzaDem]

9. That's like making a heavily leveraged bet.

If you want to make a bet on inflation, you should use the money you have now to do it. Borrowing money to make the bet is a very risky strategy -- if what you buy depreciates in value, you owe the difference back (whereas if you just used your own money, that would be the upper limit for what you could lose).

[sharesunited]

10. If you have income to service the debt in the near term, MAYBE.

Remember, though. The crash we had in 2008 also crashed oil and gold, so correlations can be very unpredictable.

[Blackhatjack]

11. The Big Fear I Hear From Repubs Is INFLATION Is Coming....

... but if they really believed that to be true we would be wise as a country to be doing the very same thing.

Shouldn't we as a country be borrowing as much $$ as we can obtain and investing it in energy, research, infrastructure, job creation, and education,etc.??? Each of these will cost more in the future inflated economy.

[Greyhound]

14. Which inflation, the real stuff or the numbers the government feeds us? n/t