How will a global hyperinflationary depression affect us?

Ausprop said:
is there any safe harbour from this other than accumulate gold and fix loans if you can? if the US for example goes into hyperinflation, what will the monetary impact for oz be?

the essence of my question is, if the rest of the world goes so pear shaped is there any repsite for us, or should we all be bunkering down?
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All you need to do is look after your own little piece of the backyard.

a) Keep your cashflows solid, the LVR's low and be ready to take advantage of the "shizen de fan".

b) If you are worried by any external factors, then fix your loans, and/or sell off to reduce debt and increase LVR.

c) combine a) and b)
 
Wouldn't rents go thru the roof too...?


Hey TC....need any landscaping done...?
I might run outta food one day.....I could swap you some landscaping services for sorghum or wheat....although hang on..?..what can I do with those apart from making bread...?...hmmmm

I know....trade it for some real tucker...!

You do need some paving done don't ya...?:D

Prolly not....but....

I'll stay rural for sure...:cool:
 
Thorpey said:
Wouldn't rents go thru the roof too...?


Hey TC....need any landscaping done...?
I might run outta food one day.....I could swap you some landscaping services for sorghum or wheat....although hang on..?..what can I do with those apart from making bread...?...hmmmm

I know....trade it for some real tucker...!

You do need some paving done don't ya...?:D

Prolly not....but....

I'll stay rural for sure...:cool:
Click to expand...

Real Estate: Farmers and holders of urban property seemed to benefit if their property was mortgaged; the inflation soon wiped out the mortgage debt. However, they received no income, as noted above, since rents were frozen. After the stabilization, heavy new taxes and the urgent need for cash forced most holders to remortgage their property, often more heavily than originally, so that their gains were illusory. Still, those who held real estate throughout managed to save the capital thus invested. However, those who sold during the inflation (often through desperate need for cash) fared poorly. Because it brought no income, real estate sold at extremely low real price levels during inflation.

this is from the article i posted
 
urbanprospector said:
i suggest people take the time to read this . it's about germany and hyperinflation . i will answer many peoples questions

http://www.usagold.com/germannightmare.html
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Very interesting. Thanks for that.

Hard to see how highly geared resi property investors would fair badly though, or at least worse than anyone else. It looks like those who had all their assets as cash lost everything. Those who had high debts had the debts eliminated by inflation. People were getting paid 3 times a day at the height of the madness, and the wives would rush out to spend it on something, anything.

Farmers, land owners, property owners, especially those with debt did OK. Even owners of shares of companies that didn't go bust did OK as long as they didn't sell but held on. People who sold property for a pitance were losers, those who held did well. Some people who won big time were those who bought at the lows.


See ya's.
 
topcropper said:
Very interesting. Thanks for that.

Hard to see how highly geared resi property investors would fair badly though, or at least worse than anyone else. It looks like those who had all their assets as cash lost everything. Those who had high debts had the debts eliminated by inflation. People were getting paid 3 times a day at the height of the madness, and the wives would rush out to spend it on something, anything.

Farmers, land owners, property owners, especially those with debt did OK. Even owners of shares of companies that didn't go bust did OK as long as they didn't sell but held on. People who sold property for a pitance were losers, those who held did well. Some people who won big time were those who bought at the lows.


See ya's.
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what will happen to banks in modern era is qute tricky, they'll have no deposit (or very little), no overseas money or funding. we would need a criminal government or central banks that will continue to put money in banks to lend out (at least in earlier stage).
but it is possible to have iperinfaltion from too high foreign debt and a no ending currency fall, a bit like what happened to Iceland (but they had IMF stepping in and exchange control. Australia but much more NZ have somewhat a risk of Hyperinflation
 
Yes Boz.

Hard to see how in an economic crisis caused by excessive private and government debt, that you win by holding a lot of debt and those holding cash lose. Gotta be more to it than that?


See ya's.
 
the aussie dollar down 4.5% overnight .. import prices will rise adding to cost of things. dow was off 3.6% so expect big falls today in asx .

everyone getting poorer via super atm also
 
If I can do arithmetic, the Chinese Renminbi has gained 12.2% against the Aussie dollar in a month, so one of the much vaunted Chinese buyers who bought a $500K house a month ago = CNY3.16m would now get CNY2.77m if he sold for the same price (ignoring transaction costs). Of course the counter argument is that with a 12% drop in prices, Aussie property is an even more attractive buy for Chinese buyers.
 
urbanprospector said:
the aussie dollar down 4.5% overnight .. import prices will rise adding to cost of things. dow was off 3.6% so expect big falls today in asx .

everyone getting poorer via super atm also
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A couple of months ago I told one of my mates to get his super into cash. He didn't, until a professional said the same. I still claim to have made the better call because the pro only suggested it as a precaution being so close to retirement. I made the call because what is happening now has been threatening for some time.

A number of people have seen it coming and have gone to cash in their investments.

This is a "hyperinflation" thread and I just don't see that for Oz. This week has an awful "deflationary" feel to it. All asset classes are losing value. The problem with property: I decided to sell a few months ago and have only now got vacant possession and the auction is in another month. That may be too late. :(
 
Like bad tempered drunks kicking their dog, the US hedgies are kicking everything Aussie. They are a school of sharks picking on anything that looks a bit weak. If it wasn't that bad when they started it will be a bloody mess by the time they finish.
 
Ausprop said:
this is scary.... i have never experienced asset deflation and i am just not set up for it.
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Let's hope I'm over-reacting and the powers that be can patch it up like Humpty.

It's not easy to get "set up for". I was expecting trouble when both the GFC and this hit but each time I get whacked anyway. Maybe blissful ignorance is the answer? :D
 
Sunfish said:
The problem with property: I decided to sell a few months ago and have only now got vacant possession and the auction is in another month. That may be too late. :(
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That's why the overwhelming majority don't buy IP's and buy shares instead; easier to get in and out.
 
Sunfish said:
A couple of months ago I told one of my mates to get his super into cash. He didn't, until a professional said the same. I still claim to have made the better call because the pro only suggested it as a precaution being so close to retirement. I made the call because what is happening now has been threatening for some time.

A number of people have seen it coming and have gone to cash in their investments.

This is a "hyperinflation" thread and I just don't see that for Oz. This week has an awful "deflationary" feel to it. All asset classes are losing value. The problem with property: I decided to sell a few months ago and have only now got vacant possession and the auction is in another month. That may be too late. :(
Click to expand...

no i see stagflation coming here asset deflation but price inflation in everyday living .. rates ,utilities ,food, fuel etc, wages wont rise
 
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