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/biz/ - Business & Finance

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27963292 No.27963292 [Reply] [Original]

>buy a house right now for 500k
>usd hyperinflates
>pay of mortgage in 1 week
>?????
>profit

If you are in debt, hyperinflation is about to save you.

>> No.27963349

Except the fed raises rates before that happens, causing deflation, retard

>> No.27963355

Keep your bags
Die in them

>> No.27963486
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27963486

>>27963349
wait what

>> No.27963676

When markets crash, deflation happens since credit dries up and bankruptcies cause writing off of debts. Higher interests might really screw you over.

>> No.27964354

>>27963486
Interest rates were 17% in the 70s, your parents probably remember it

>> No.27964660

>>27964354
But if your holdings are in assets are hedges against inflation, leaving you with enough capital to pay off your debts, then can't you effectively negate having to worry about interest rates?

>> No.27964711

>>27963292
Aisha was the OG hottie

>> No.27964981

>>27964660
If the interest rates are fixed and there's inflation it gets wiped out but if you are looking to profit off the appreciation of the house then you are mistaken, when interest rates increase like that home prices plummet because the credit required to buy one is essentially unobtainable. It's credit card interest rates. If you are hoping to do this with a variable rate mortgage you will get owned hardcore. The only case where it works is long-term fixed rate, low rate debt

>> No.27965223

>>27964981
So what's the play? I'm in Canada and honestly I've been wanting to take my earnings and help my parents pay off their home at some point, but I want to try to do it in the most savvy way I can manage.

As far as I've discerned they actually hold almost no equity % on their house, are they gonna be better off cutting their losses and finding something cheaper?

>> No.27965463
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27965463

do loans seriously not adjust for inflation? I have no idea how this works

>> No.27965521
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27965521

Why would you sign a variable rate anything?
>>27963292
Literally the plan. 5 years of pain, but two years in rent on my old apartment has already eclipsed my mortgage.

>> No.27965927

>>27965223
I'm not a mortgage expert, also from Canada but my understanding is that most people are on 5 year terms where the interest rates get renegotiated. Variable rate is cheaper but you can get bogged by interest rate hikes between the terms. Fixed rate is more expensive but you are bog-free for 5 years.

In the case where they don't have equity in their house if there's inflation it doesn't really matter what the central bank does because prime rates (rates charged by RBC/TD/etc.) will go up to cover the inflation. Because rates increase their ability to pay will be lower, making the risk higher from the bank's perspective, justifying high rates. In other words, they will get their pound of flesh. The way to play a leverage strategy is to get low interest long term fixed rate debt. I'm not sure that type of debt is available to individuals outside of mortgages in Canada.

>> No.27966118

>>27964711
Im a Ryoko man, myself.

>> No.27966410

>>27965223
interest rates in canada are 2-3% while houses are increasing an average of 7%. so theoretically you are better off putting your money in the stock market and getting returns on it unless interest rates go up

>> No.27966551

>>27966410
unless you're in the GTA where houses went up 30% +

>> No.27966728

>>27966551
>>27966410
They are going crazy in London now as well (according to my RE broker dad). People in Toronto are priced out so they are buying stuff in other housing markets. I was considering buying a rental in Nova Scotia actually.

>> No.27968189
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27968189

>>27963292
>willingly becoming a serf because the kike central bank incentivized it for you when under normal circumstances you would behave exactly the opposite
>surely more of the same that got us into this problem in the first place will now fix the problem
peasantry

>> No.27968263

>>27966410
>issue excessive debt because your politicians actually believe in socialism
>chinks buy up all your real assets
>dump the cash back on you
USA is next.