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Why does he say to "clear your debts" in preparation for the collapse, I would think you should fire up more debt, its all going down anyway ... ?
by hans 17y ago
Why does he say to "clear your debts" in preparation for the collapse, I would think you should fire up more debt, its all going down anyway ... ?
- joe_the_user 17y agoIndeed, One factor that "keeps the ball in motion" is that no one knows whether the final end will break in favor of the debtors or in favor of the creditor. Hyper-inflation breaks in the favor of the debtors - Everyone without a variable rate loan can payoff their mortgage in no time. Deflation breaks for creditors, if incomes and wages go down, homes go away.
- steveklabnik 17y agoMaybe some sort of "It's a Wonderful Life" scenario where everyone tries to call in their debts at once, and then (instead of what happens in the classic) gets vicious about collecting.
- prewett 17y agoI think because he's predicting deflation. In deflation, the currency increases in value, so your debt effectively gets bigger. In a deflationary time, cash is king.