Making a Lot of Money

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Lemonyellowschwin's picture
Status: Platinum Member (Offline)
Joined: Apr 22 2008
Posts: 561
Making a Lot of Money

For those who believe that there will be dollar devaluation and high levels of future inflation, precious metals and other hard assets seem a wise choice.

I am becoming convinced, however, that there is another side of the equation.  The biggest beneficiaries of dollar devaluation and high levels of future inflation (should that come to pass) will also have high levels of fixed low interest debt.  Theoretically, owning inflation hedges without fixed debt will only help one stay even with inflation.  A person with both inflation hedges and corresponding levels of fixed debt stands to gain the most from high inflation.

For this reason, I have no intention of paying off my 5.3% mortgage, and I am seriously considering refinancing my home to extract the maximum equity and take on as much low interest debt as I think I can manage.  The other benefit of this plan is the "walk away" factor in the event I need to abandon my home in the city and flee for the hills.


pleaseremoveme's picture
Status: Silver Member (Offline)
Joined: Jan 24 2009
Posts: 115
Re: Making a Lot of Money
Take a look at this thread: You'll find a lot of comments on exactly this idea. But I wouldn't bet everything on inflation.

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