Page 8 of 102 FirstFirst ... 2345678910111213141858 ... LastLast
Results 71 to 80 of 1017

Thread: Stacking physical cash

  1. #71

    Default

    Quote Originally Posted by Atlas Shrugged View Post
    So, I am now down to 47K in mortgage debt. We are living extremely sparsely (although I would like to get rid of the cell phone and cable, my sweety will not go that far). As a reminder, in July 2011, I had $286,000 in debt.

    It can be done.

    Right now stacking cash and paying down debt. I have saved almost 50K in interest (if I paid minimum payments).

    Plan is to be debt free within 12 months. There is a storm coming. I think PMs will continue to get hit hard the next 6-9 months. I continue to buy a little here and there, but for the most part this is the plan.

    I want to be debt free prior to the storm hitting. I am convinced that deflation will override all of the debt, it is just a matter of time.

    Hi Atlas! Congratulations on your debt reduction! Nice job.

    Could you explain a little bit more about what you mean when you say deflation will override all of the debt?

    Thanks very much, always enjoy reading your comments.
    Argentine

  2. #72

    Default

    Even since before cyprus i had been starting a little cash stack. I still mostly use cash for purchases so whenever i withdraw some from the bank i tend to take out a little extra and add it to my money box.

    Long term im looking to have enough to by 3 months of essentials, which really doesn't add up to that much in the grand scheme of things.

  3. #73

    Default

    Quote Originally Posted by argentine View Post
    Hi Atlas! Congratulations on your debt reduction! Nice job.

    Could you explain a little bit more about what you mean when you say deflation will override all of the debt?

    Thanks very much, always enjoy reading your comments.
    Argentine
    Sure. All money is debt. Money supply must grow because almost all debt has interest. Therefore to keep the monetary system from collapsing, debt must grow each year (public and private debt). Right now, the monetary base is growing in an exponential manner. Eventually the debt load will become too much and it will crash, much like it did in 2008. When that happens, houses, cars, other "stuff", will all drop in value because fewer dollars will be chasing the goods and services. Some FRNs will be destroyed via default. This makes the FRN more valuable because it is needed to pay off debt and is used as a means of currency. It is mathematically impossible to pay off all debt, since you have to pay interest.

    That is why I think deflation will, at some point in time, override the system. I just don't know when.

    Does that make sense?

  4. #74

    Default

    Quote Originally Posted by Atlas Shrugged View Post
    Sure. All money is debt. Money supply must grow because almost all debt has interest. Therefore to keep the monetary system from collapsing, debt must grow each year (public and private debt). Right now, the monetary base is growing in an exponential manner. Eventually the debt load will become too much and it will crash, much like it did in 2008. When that happens, houses, cars, other "stuff", will all drop in value because fewer dollars will be chasing the goods and services. Some FRNs will be destroyed via default. This makes the FRN more valuable because it is needed to pay off debt and is used as a means of currency. It is mathematically impossible to pay off all debt, since you have to pay interest.

    That is why I think deflation will, at some point in time, override the system. I just don't know when.

    Does that make sense?
    Not to me. Inflation to me is the watering down, and decrease in value of the currency. So why isn't the inverse true? Or maybe deflation isn't the inverse of deflation?

    .

  5. #75

    Default

    Quote Originally Posted by AnotherDave View Post
    Not to me. Inflation to me is the watering down, and decrease in value of the currency. So why isn't the inverse true? Or maybe deflation isn't the inverse of deflation?

    .
    I think you mean inflation. It is. I am projecting that deflation will override the ability of CBs to create more debt. Therefore, currency will be more valuable as people default on their credit and other get rid of their stuff. Basically a 2008-09 scenario, only a 100 times more powerful.

  6. #76

    Default

    I wish I understood it better, but look at housing prices. The credit bubble popped and the prices deflated severely. The easy money spigot turned off a while and there were fewer people flush with bad loan dollars chasing the asset. Bad news for the asset holders (homeowners) on the opposing side of the deal from the loan makers.

    Easy money = high prices (inflation)
    But when money/credit/finance systems break = prices plummet (deflation)

    These forces have been battling for awhile, the naturally occurring force for past five years is deflation, which is being fought ferociously by the Fed with massively inflationary policies.

    Celebratory type chatter in stock markets is based on people thinking that balance will remain in system long term, neither giant pressure will win over the other. This _IS_ a possible outcome. But balance is not a mathematical matter as much as emotion. And now there is more combustible material in play, so effect of change in sentiment could be amplified.

    Governments are fighting fire with gasoline because liquid gasoline does not burn.

  7. #77

    Default

    Quote Originally Posted by ILTim View Post
    I wish I understood it better, but look at housing prices. The credit bubble popped and the prices deflated severely. The easy money spigot turned off a while and there were fewer people flush with bad loan dollars chasing the asset. Bad news for the asset holders (homeowners) on the opposing side of the deal from the loan makers.

    Easy money = high prices (inflation)
    But when money/credit/finance systems break = prices plummet (deflation)

    These forces have been battling for awhile, the naturally occurring force for past five years is deflation, which is being fought ferociously by the Fed with massively inflationary policies.

    Celebratory type chatter in stock markets is based on people thinking that balance will remain in system long term, neither giant pressure will win over the other. This _IS_ a possible outcome. But balance is not a mathematical matter as much as emotion. And now there is more combustible material in play, so effect of change in sentiment could be amplified.

    Governments are fighting fire with gasoline because liquid gasoline does not burn.
    Until it vaporizes. Nice analogy. Wait until the vaporization of assets, then you will have a real conflagration of deflation.

  8. #78

    Default

    Quote Originally Posted by Atlas Shrugged View Post
    The USD dies last...because it is the reserve currency.
    And this is why more wars will be fought, to keep that true. If not, lights out.

  9. #79

    Default

    Quote Originally Posted by SunTzu View Post
    And this is why more wars will be fought, to keep that true. If not, lights out.
    Hmm, Iran or North Korea....

  10. #80

    Default

    Yes, I mistyped deflation/inflation above. Glad you caught it, Atlas.

    I'm still trying to to wrap my mind around the fear of deflation, i.e. the currency becoming more valuable. ILTim's explanation helps, but I wonder if deflation is the correct concept to use in the instance of housing. Certainly the FRN/house ratio has changed, but FRNs were not affected over the rest of the economy, and not in the same way; a can of soup just keeps going up in price!

    I do see that the stock market compensates automatically on the relative strength of the FRN; every time the FRN takes a hit, Wall Street has a party -- they're immune to inflation!

    But, they have a little problem in quickly converting their account balances to paper cash, our topic, and we'll have to see how that plays out.

    .

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •