High Inflation will Erase Debt
Рет қаралды 46,154
2 жыл бұрынWe've seen moderate inflation over the last few decades in the United States, but the debt load has grown exponentially. However, in periods of high inflation, the inflation actually wipes out the debt. So how does this happen?
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#debt #inflation #economics
@jamesmaduabuchi6100 2 жыл бұрын
There might be an economical turmoil but there is no doubt that this is still the best time to invest.
@wilsonjudson1650 2 жыл бұрын
Best time to invest? thats funny though because in the last four months I have lost more than $47,900 in stock market which is the biggest I have loss since I ventured into stock investment.
@jamesmaduabuchi6100 2 жыл бұрын
you could be right or wrong depends on your expertise, I once made such loss when i invested thinking i have gathered enough trading skills from youtube videos
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@henryclinton9317 2 жыл бұрын
Really? people are cashing in from the stock market and frankly speaking its comforting seeing someone admit to the fact that they actually seek help from professionals. please how can i reach TERESA ?
@jamesmaduabuchi6100 2 жыл бұрын
search her name on the internet to reach her
@rangerdoc1029 2 жыл бұрын
It reduces debt IF your income adjusts upwards and you can avoid taking on new debt or expenses.
@gilbertoguadiana9099 Ай бұрын
Or if your assets inflate past the inflation rate
@nintendad1166 2 жыл бұрын
Interest rates. Property taxes. No one's getting away from the banks/government that easy.
@1Skeptik1 2 жыл бұрын
Inflation wipes out savings! Good job FED our bureaucrats still love you.
@natel9019 2 жыл бұрын
The price of a given good does not go up, the value of the currency just went down.
@BMac7773 2 жыл бұрын
Good explanation. Highly recommend anyone who can buy a place to live on a fixed loan, so as inflation picks up over the next few years you won't have to pay rising rent costs.
@nancydunn4657 2 жыл бұрын
I love how you make it simple to understand for people like me🥰👏🏻
@JJOHNSON-gb7qb 2 жыл бұрын
Really informative contented, appreciate you friend.
@dennisburdick682 Жыл бұрын
Great video. Thanks.
@henrygutetama3173 2 жыл бұрын
a good point may be also added that, from a corporate standpoint, employee salary can be seen as some kind of debt and these are "erased" too to some extent.
@richardrodriguez1742 2 жыл бұрын
I had a 9.25% adjustable in 1985, paid that sucker off fast.
@forzabro5026 2 жыл бұрын
It doesnt erase debts. When you sign your mortgage theres fine print clauses that protect the banks from losing there money in the case of a financial emergency, like hyperinflation. Check other countries and markets that experienced the same, the debt follows you
@graham9334 Жыл бұрын
Really? So say you got a 30 yr fixed at 3 % inflation goes bananas to 30 percent. Banks will just increase the rate regardless?
@r.o.b.480 2 жыл бұрын
It's all fun and games until you have to make the choice between paying the mortgage, or eating next month.
@3VJohnny 2 жыл бұрын
Agreed - or lose your job
@nickmalone3143 2 жыл бұрын
Or buying a tank of gas to get to work which the govt will tax your wages and kill your family
@johnhasse3995 2 жыл бұрын
No, it just moves it around. In the end, it leads to ruin, not prosperity. How does it matter if your 'debt' is worthless? if everything is worthless?
@r3steve1 2 жыл бұрын
Dave Rubin needs to interview you.
@HeresyFinancial 2 жыл бұрын
Thank you
@950rpm 2 жыл бұрын
I mentioned this jokingly to my wife a few months ago. Locked interest rate. “I kinda hope hyper inflation comes, our mortgage could be less than a ham sandwich”
@scarletcobine3968 2 жыл бұрын
NOBODY BECOMES MILLIONAIRE OR A BILLIONAIRE'S BY WORKING FOR OTHERS AND DEPENDING ON THEM, GOOD INVESTMENT BRING MILLIONS OF DOLLARS, AND CONSISTENCY BRING BILLIONS, THE MARKET IS ALL ABOUT CRYPTOCURRENCY AT THE MOMENT NOW.,
@sedatmehmet6691 2 жыл бұрын
Most time having knowledge or insight about a particular activity can as well be a pleasing exercise. I can boldly say that forex and crypto trading is one of the profitable money exchange services that elevates investors and their financial status.
@clairemcdonaldjr1335 2 жыл бұрын
@Yuri Khan I did invest with her and I made huge profits
@isahabdulmalik460 2 жыл бұрын
@Yuri Khan I saw the recommendation but I didn't bother chatting her up I keep loosing teally i still don't understand how the forex market works tho
@adrienneszczeblewski673 2 жыл бұрын
@Jame Woods consistency is key, I've been investing with her for months now and I've made alot of profit from her. Most of those traders who offer to give you 300% of whatever you invest might scam you of your hard earned money. Forex ain't that easy you know
@alejandrodelatorre3860 2 жыл бұрын
@Yuri Khan I just withdrew my profit two days before now. Am glad i did invest with them, still reinvested and the trade is ongoing
@jamiekawabata7101 2 жыл бұрын
Happy green shirt day, Joe.
@fusrojosh6870 2 жыл бұрын
wouldn't the lenders / banking cartels force the government(s) to act in their favor, because no one would stop them
@michaelthayer5351 Ай бұрын
Inflation also wipes out wealth, that's why it's bad. That's why people in Weimar Germany bought furniture and other physical assets to preserve their wealth when the currency became worthless. And even if we never get to that level of inflation it still makes saving harder as prices rise faster than wages and squeeze purchasing power and not everyone can just go and borrow money to invest in rising asset prices.
@rhwinner 2 жыл бұрын
Happy St Paddy's Day!
@jeffcauhape6880 2 жыл бұрын
Wow ... clear but not intuitively obvious... food for thought...
@Sassycowgirl17 2 жыл бұрын
Happy st Patrick’s day ! Green shirt!
@NeonVisual 2 жыл бұрын
DO NOT PASS GO. DO NOT COLLECT $100 - The Monopoly guy.
@brochrock007 2 жыл бұрын
Monopoly! Where ONE person wins & everybody else loses!
@chance9512 2 жыл бұрын
Big joe taking on the SPICIEST financial topics. Respect, my dude.
@williammanford3985 2 жыл бұрын
Hey Joe, great analysis, keep it coming.
@lotsofthisandthat9791 2 жыл бұрын
Take every CC offer, max them out,Malay minimum and then pay off with worthless paper!
@billytheweasel 2 жыл бұрын
I hope your buddy is okay Joe.
@margra99 2 жыл бұрын
in periods of high inflation, the inflation actually wipes out the debt because the cost of borrowing rises and nobody can afford to borrow anymore. Fixed-Rate Loans vs. Variable-Rate Loans is a gamble you take when taking a loan.
@simonsmith3563 2 жыл бұрын
Most people on 30 year mortgages are on 2-5 year fixed rates. When they’re renew they will get monkey hammered. A 30 year mortgage is rarely if ever one mortgage. People move on average 5 times in that period.
@alexeygrom1834 2 жыл бұрын
thanx a lot for all your lessons !
@mattshank3399 2 жыл бұрын
Hey Joe, do you know anything about nova tech and if it's worth investing in?
@1962recon 2 жыл бұрын
Only if you get enough raises to keep up with inflation!
@andreas956 2 жыл бұрын
If you are to buy a house, is it wise to buy it now as soon as possible? Since it seems that will soon enter a phase with high inflation, wiping out debt. It sounds like a self playing piano to me.
@vanallen1673 2 ай бұрын
High inflation does NOT wipe away debt in a positive manner. What it does is to discourage future debts, investments and societal growth potentials. It is BAD not good.
@Firecoach4414 2 жыл бұрын
What about indexing? Will lenders be allowed to rejigger fixed rate loans by indexing them to inflation if things get really really out of control ?
@MattPSU02 2 жыл бұрын
You'd think that the state pension funds would *love* some inflation. They promised pensioners a fixed pension payment for life, and they're currently short by a mile. Inflation should make investments go up faster than the salaries, and hopefully reduce the pension deficit. The only problem is if salaries go up too quickly.
@timcongleton3201 2 жыл бұрын
best finance channel on youtube.
@jeremydean9213 2 жыл бұрын
George Gammon is pretty good also 👌
@doctoruttley 2 жыл бұрын
Agree 💯
@edoson01 2 жыл бұрын
No, not even close
@PatrickN. 2 жыл бұрын
@@jeremydean9213 thank you do much Jeremy! I'm constantly trying to find great economic teachers on the internet. I didnt have George yet on my favorites. I just looked him up after your advice and clicked on one of his latest videos. Man, is he excellent!!! Thank you, thank you! Keep recommending. I definitely will. We need to keep educating ourselves and the rest of the world about money and how it works in our world. It's in my opinion, the only way that the little guy will stop being manipulated by the big guys and the people in power. Yea, and I'm a huge believer in bitcoin! Thanks again. And please if you haven't already check out bitcoin and keep spreading the word.
@PatrickN. 2 жыл бұрын
@@GardenerEarthGuy Thank you for the tip! I checked out his channel and love it. Subscribed. Read my reply to Jeremy above. All the same to you. With all this good youtube content, I wonder why do I have and maintain a subscription to traditional TV that is nothing more than sound bites and advertisements? Traditional TV is definitely dying. Thanks again!!
@jaimeortegajr7791 2 жыл бұрын
I had a question. If you had a property and had an opportunity to refinance given everything you explained right now, would it be in your best interest to refinance now or wait until the money becomes less valuable to pay off the old debt?
@Michaelherrick0 2 жыл бұрын
Going through this right now. Refi this week. Now rather than later.
@JD12395 2 жыл бұрын
So I have a hypothetical situation and want to as for an opinion. Not advise, just an opinion. Suppose I had the opportunity to borrow $100,000 at 3% interest rate today, a time of clearly double digit inflation. I could invest that money in today’s stock market. Or I could buy gold bullion as a hedge against a dollar collapse or whatever other nonsense might be coming. Also, assume I have other assets in play that any other normal person age 55 might have after a lifetime of working in an upper middle class environment. Feels like a bullion bet might not be a bad idea. Not necessarily going all in at 1950 but layering in over a year. Thoughts?
@nuki3234 2 жыл бұрын
Also wipes out dinner for the poor.
@joseftalaoui5052 2 жыл бұрын
Give it 9 months for the food and energy riots to start around the world
@Lexicommonzero 2 жыл бұрын
This is the reason why I updated both my cars in the last 6 months, interest rates are below the reported inflation rates
@supersize75k5 2 жыл бұрын
If you over paid and financed fir your new car at current values how does this benefit you ?
@Lexicommonzero 2 жыл бұрын
@@supersize75k5 I did not overpay and I financed with very low interest rates, inflation has and will continue to outpace the absolute value of what I paid for the vehicles, ie 90k of 2021/22 money in terms of relative value is much higher than the relative value of the 2024,25,and,26 money than I have to pay it back with
@doctoruttley 2 жыл бұрын
Smart. I bought 2 in 2020. Got a really good deal and financed them for 6 years at 0%. An offer I couldn’t refuse. 🤷🏻♂️
@gwills9337 2 жыл бұрын
@@Lexicommonzero you're also assume the car won't depreciate faster than inflation. I think you're correct - but your calcs assume this so be honest.
@Lexicommonzero 2 жыл бұрын
@@gwills9337 they're used cars so they've gotten the largest part of their depreciation out of the way, but i nor do I believe anyone should view a car in terms of investment, they are 100% a consumable good, I ran the calculus many times over, better to take advantage of the lower interest rate before inflation took hold to minimize the expense in relative terms
@lora97006 2 жыл бұрын
So all the double/triple dipping they do plus the bailouts, they still can't get it together? And if Putin demands Gold for payment instead of dollars? What happens next, for real?
@Not_So_Weird_in_Austin 2 жыл бұрын
when younger my cousin and I played monopoly and ran out of money due to changing rules if you have to pay the bank would give you some more money to continue playing. We cut up paper to make more money and the game ended up with huge valuations and arguments like you cant bankrupt me I am the government who prints the money for the banks and I wont pay even though I landed on an inflated 40 jillion dollar hotel...We walked away from the game mad at each other for a few hours...
@debbiehanisch2099 2 жыл бұрын
Was it the Rothschild version?
@hiddenhand6973 7 ай бұрын
😂@@debbiehanisch2099
@CalderaFinance 2 жыл бұрын
2022 me talking to 2008 me. Or 2008 me talking to 2001 me
@MrJordanT 2 жыл бұрын
So it sounds like obtaining assets at fixed rates (like a house) will prove beneficial in the long run because inflation will go up and make new debt harder to obtain. but that will prompt businesses to start to deleverage old debt since there will be less new debt taken on in order to truly afford the new debt?
@tobybrown1179 2 жыл бұрын
That explains why interest rates skyrocket, thank you
@JinKee 2 жыл бұрын
all the mortgages in Australia is only fixed for a maximum of three years, and is variable rate after that
@generalinbox3740 2 жыл бұрын
Max out our credit 💳💳
@gregorysagegreene 2 жыл бұрын
What you're saying is what I've come to understand ... I should have been my grandfather, otherwise I'm screwed.
@benji1868 2 жыл бұрын
So the Debt punishes the savers.
@DeadbeatGamer 2 жыл бұрын
It only erases the past debt of previous generations.
@SurfKider 2 жыл бұрын
World war 2 debt is so small nowadays. It s just about $241 billions.
@DeadbeatGamer 2 жыл бұрын
@@SurfKider Its been one long war effort.
@utubedude2842 2 жыл бұрын
Commodity inflation cycles are a farmers best friend. Farmers, you have 3 more years, be smart.
@Spikefade 2 жыл бұрын
So if interest rates rise to 10% , 3 trillion in interest payments , how does US debt go down ?
@keltingr2612 2 жыл бұрын
lol
@TimothyWNugent 2 жыл бұрын
it doesn't go down, $10 becomes worth the same amount as $5. Because you now have twice the amount of money coming in from taxes (even though the purchasing power is half) the $30 trillion in debt is twice as easy to pay off. If you have a constant 14.4% inflation rate, every 5 years your purchasing power is exactly half of what it was 5 years before. Gas goes from $4 a gallon to $8 a gallon, you don't make $100k a year, you make $200k a year. You make twice as much, but can only purchase the exact same amount of goods. However, your debt becomes easier and easier to manage as time goes on. Right now, the government makes $5 trillion in taxes each year. In 5 years, with 14.4% inflation it would make around $10 trillion. Another 5 years, $20 trillion, another 5 years after that and it would make $40 trillion. After 20 years, it would be making $80 trillion in taxes. Now, the federal government can't afford to pay a 14.4% interest payment on its debt. However, it would only pay that interest rate on new debt as the old debt has the super crazy low 1.5% interest rate. Also, the fed can keep buying up more and more government debt and the US government gets refunded all interest payments on it. That is how you inflate your way out of debt.
@justindressler5992 2 жыл бұрын
This all sounds good but if wages don't follow inflation, you won't have more money to spend and when your fixed mortgage comes for renewal you will be paying higher interest rates. I can't speak for everyone here but I would assume most people's wages have stayed the same or only adjusted for a couple percent.
@jeffumbach 2 жыл бұрын
What do you mean "renewal"? A fixed-rate is fixed for the duration of the mortgage, it doesn't change every few years.
@justindressler5992 2 жыл бұрын
@@jeffumbach Maybe in the US, in Australia it reverts to variable after 2-5years. At this point you have a choose to choose the new rate and fix again.
@frankyhonnolus5528 2 жыл бұрын
So the recommendation is to buy home now?
@rasmuslauridsen1390 2 жыл бұрын
At around 7:50. How can the money supply increase if new debt is flat-lining? Where does the new money come from?
@rasmuslauridsen1390 2 жыл бұрын
I don't understand the logic here. I tought that as the debt is paid off the money supply decreases, but you are saying that debt can decrease while the total money supply increases. I thought money was created by introducing more debt into the system. I hope someone might take a little time to explain why I am wrong.
@idahopotato5837 2 жыл бұрын
So why have mortgages been at 3-4% for the past year. Do companies really expect that's a good return for the next 30 years?
@cdb8987 2 жыл бұрын
It doesn't have to be a good return if you know the fed buys mortgage backed securities whether they are good or not
@gwills9337 2 жыл бұрын
because the entire market is a scam backed by EZ FED cash
@ufester27 2 жыл бұрын
I knew that the mortgage rates were too good to be representative of reality when my lender, who used to pride themselves as both the loan servicer and loan owner, sold the loan to Freddie Mac. They still service the loan, but the government effectively earns that sweet sweet 2.5% interest rate. Part of me wanted to refinance and take the max cash out. But the part that won said 'just take a great rate on a 15 year note and pay it off!'
@jeffumbach 2 жыл бұрын
@badinstinctsKZfaq which is why you have to do all the closing costs again if you refinance a mortgage. They were trying to get me to refinance and bawked when I pointed out that the fees wiped out any savings from the new rate and tried to gaslight me as if I can't do math.
@amiller2121 2 жыл бұрын
Good video Joe but there is something I'm confused about. A lot of people attribute this recent spike in inflation to the "money printing" - but what about the supply chain issues that we're seeing? I don't think that type of inflation is going to help with debt and it's 'real' value. For example - take a look at shipping containers. Some goods have recently gone up in price because shipping containers went from $5000 to $20000 bucks in the last year or so. These type of increases are being counted in the CPI numbers and obviously contribute to the overall inflation number. I don't have the same knowledge about macro economics that you do but I just don't see how you can make a general statement that high inflation will erase debt. The concept makes sense if everything we're seeing was from the Fed printing money but personally, I think a good chunk of high inflation we're seeing now is a distortion introduced by our now broken "just in time" supply chain.
@chrismcaulay7805 2 жыл бұрын
That is the portion of the inflation that IS transitory (containers, and supply chain issues). The portion that is not is the money supply (unless of course the Fed manages the black magic of a soft landing for the first time in human history). As it is now, Joe is correct we will be getting high inflation for awhile. But in this video Joe is talking about 10-20% per month, not 10% per year (what we have now-ish). We should not see those hyper inflation numbers with the current scenario, but we will see higher than average inflation...
@amiller2121 2 жыл бұрын
@@chrismcaulay7805 Thanks. What percentage of the high inflation numbers do you estimate is from the money printing? That's the part I'm trying to figure out.
@SgtBiz7 2 жыл бұрын
So all in all... now may be a good time to pick up a home loan?
@hondafanboy1856 2 жыл бұрын
Its called monetizing the debt
@danielgagne485 2 жыл бұрын
So what happens when US cannot aquire more debt to pay off old debt?
@stevehasenfus576 2 жыл бұрын
Lesson for today boys & girls : Get the largest loan you can get your hands on NOW.....buy hard assets (Gold / Property / Machines that make things) and wait....sell 1/2 of the assets and payoff the loans......
@jimjohngirard 2 жыл бұрын
So, in a nutshell savers, and those people who are prudent and careful with their money are screwed over. Those who squander their money and go deeply into debt are rewarded? Sounds like America to me. It would be interesting for you to delve into what gold & silver will do in a prolonged inflationary period like the 10 years you were talking about. Basically all this crap sucks!
@Foslopac 2 жыл бұрын
Correct. Savers will be wiped out, and debtors will have their loans cleared off easily. This is how the monetary system works, and people should educate themselves to prepare for the future.
@rickmudslopp5484 2 жыл бұрын
It'll be bad for those who save in only a tanking currency will be screwed, yep. Not difficult for them to switch savings though if they learn
@michaelearlgrey 2 жыл бұрын
Look up Gold oz VS Turkish Lira.
@jeffumbach 2 жыл бұрын
Which is why the prudent are converting their savings out of fiat currency.
@moneymaker2024 2 жыл бұрын
For public,inflation will only wipe out debt if your income grows with inflation otherwise not
@anonymousnearseattle2788 2 жыл бұрын
If money is becoming so abundant, then who is getting it. It's not me.
@dudlydoright7562 2 жыл бұрын
Debt is decreasing on one side of the equation,and going exponential on the other side,so on average no!
@marksgoogle4360 2 жыл бұрын
People spend less so not sure how taxes will be engaged
@Dreidcs2 2 жыл бұрын
I seen that happen before, most people paid the mortgages off as money list so much value but debt will stay the same.
@nickmalone3143 2 жыл бұрын
Yes but variable nterest rates will be adjusted wiping out any inflation gains to pay off debt ...no ?
@869475397 2 жыл бұрын
So the banks do not have to drop their variable rate just because the central banks do?
@VanjaTesin 2 жыл бұрын
In hyper-inflation this is even more excabarated. I remember when we had hyper-inflation in Serbia, during 90s, people were able to pay off their houses for an equivalent of pack of cigarettes. Crazy..
@jake68vesta 2 жыл бұрын
Why pay off that old debt if its easy to make the payment? Thats cheap money!
@rdee6577 2 жыл бұрын
Inflation doesn’t make any more dollars, diluted or not, available to me to pay my debts.
@gwills9337 2 жыл бұрын
At 9:30 you give the example of your folks paying off a mortage with "cheaper" and "newer" dollars. But they are ASSET HOLDERS. Most people are NOT. If you're a wagie your wages are flat or negative. Your debt may be "cheaper" but so is your labor, in real terms. A house may have 10x in asset price to keep up with inflation but if you make less than $25/hr *today* you earn less than a janitor did when your parents bought that house. Now remember your debts are compounding at like 8%+ (student loans, credit cards, etc) this EATS 100% of any real wage gains you may have made. NO DEBT Jubilee for the plebs - only the RICH
@gwills9337 2 жыл бұрын
Cantillion effects DESTROY any marginal gains made by labor. by the time you get an extra $0.25/hour, prices have moved 3-5x as much. If your debts carry interest rate higher than your wagie pay raises (hint, they absolutely do) - you being robbed and losing.
@KennyG233 2 жыл бұрын
hyperinflation is soon ...maybe one last Rescission then its over
@Seegreen8777 2 жыл бұрын
So what you are saying is modern monetary theory works?
@divvyinabivvy 2 жыл бұрын
I got no debt.....I will survive
@steveande6560 2 жыл бұрын
Good because I got a lot of it lol
@zomgoose 2 жыл бұрын
Stagflation will wipe out the over-leveraged.
@charlesjenkins5092 2 жыл бұрын
I don't know what you are talking about. When this country prints money like monopoly money there is no way to keep up. I have saved all my life and now it is worth half of what it was.
@hm-ys4ym 2 жыл бұрын
Duh.., Great lesson..,the next time Joseph Brown loans you some of his hard earned money, pay him back with useless paper...,
@jansasha2628 2 жыл бұрын
Still not make sense to me.
@understanding.everything 2 жыл бұрын
It's not going to work this time for the usa
@sexysilversurfer 2 жыл бұрын
But doesn’t the rise of interest to combat inflation also increase the cost of existing debt?
@appakinggg 2 жыл бұрын
It could, but when u raze only 25 points on interest compaired to almost 10% inflation.its neglible
@POLARISFPV 2 жыл бұрын
If you have a fixed rate debt, like a 30 year fixed rate mortgage your debt is paying you (like in Soviet Russia 😂). you are essentially stealing the wealth from your debtor.
@savvageorge Жыл бұрын
@@POLARISFPV And the debtor is stealing wealth from the general population by using fractional reserve banking. It's a theft chain reaction which takes wealth away from productive savers.
@rodneydowd4739 2 жыл бұрын
I found this very confusing
@GeneralUseStuff 2 жыл бұрын
From your lips to gods ears!
@JinKee 2 жыл бұрын
they want for government debt this jubilee, / but not for the debt held by you and me
@understanding.everything 2 жыл бұрын
But it's impossible if the government is spending more and more
@ruvimyefimchuk1166 2 жыл бұрын
So then do I buy real estate and get in debt?
@keltingr2612 2 жыл бұрын
at a fixed rate, yes. Smart move
@DuderScooter 2 жыл бұрын
Shit, anybody that has a friend that don’t understand inflation, just share this video.
@dderuy 2 жыл бұрын
Wouldn't reduction of debt also reduce money supply?
@HeresyFinancial 2 жыл бұрын
Not if the central bank is expanding the money supply faster
@bonsaitreehouse5534 2 жыл бұрын
Joe, you also need to keep in mind that debt is used asa tool. So they don't want the debt to go away right away.. That is why certain debts must be paid in US dollars or can't be discharged normally., Debt is structured specifically - key
@tra_vis9626 2 жыл бұрын
Been waiting for this one I’ve been telling people there’s two ways out of this, completely default and tell the central bank to F off or hyperinflate the money pay everything off and then rebaseline fresh.
@obcane3072 2 жыл бұрын
Will the Fed be able to continue to raise the rate considering the debt load of the govt? Or can they pull a Volker to 15%?
@davidraimundo7554 2 жыл бұрын
So, is this the silver lining in an inflationary period in holding fixed rate debt?
@bluefrog12345 2 жыл бұрын
Inflation I'm general rewards debtors while deflation typically rewards savers. The federal reserve printed 16x more dollars than gold in the first 10 years they were chartered. The roaring 20's were partially a result of the large increase of currency artificially created by the fed. Once things didn't go smooth and people tried to pull their cash from the banks a run on the banks occured and the federal reserve destroyed currency in circulation and made the great depression even worse. Ever since that time the biggest fear the federal reserve has voiced to the public was deflation. Since the federal reserve is a private bank and gives 6% to their share holders (it's all on the their website, just search it) they want the U.S. to keep paying lots of interest so they will always push for inflation to the point that the average person will "tolerate" inflation and not try to abolish our current central bank. Yet another reason why finances or financial history isn't taught in school.
@TheGadgetwiz 2 жыл бұрын
I bought a new F-250 and a new Mustang GT last year for this exact reason. The interest rates were extremely low (1.7 and 3.6). I figured it was a good way to short the dollar.
@kasokachibanga8837 Жыл бұрын
Does your banker agree that inflation reduces the debt on your mortgage??? Eg 9% inflation reduces the debt by 9% per year.
@NoteConference 2 жыл бұрын
Available credit has always driven real estate markets. When credit gets scared look out below!
@stachowi 2 жыл бұрын
That’s their entire plan…
@reubendc7561 2 жыл бұрын
✛Ⓘ④②③②⑤④⓪⑧②⑧ ᎢᎬXᎢ ᎷᎬ ✔️✔️💬…
@ilyasbendjeffal9758 2 жыл бұрын
I wish man if you look up a bit to the situation in my county Algeria The situation is never the same yes because my country know this game so the minimize the purchasing power And it's complicated to modulate the situation in my country the law of economics don't work to explain what is happening in and we have a parallel power not officially its like black market it make the country in bad situation and no one dare to make change because big whales control it
@greyballer1671 2 жыл бұрын
Happened to my mom in the 70s. She bought a house for 18k in 1970. I think her payment was 280$. She could barely make it and had to get my uncle to cosign. By 1980 she had no problems paying. By 1990 she just paid if off 10 years early. On a nurses salary with 4 kids. Sold it in 2010 for 400k...
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