Hyperinflation

[Khun Jean]

Topic says it all.

[LaoPo]

...What do you mean Hyperinflation ? Where do you see hyperinflation ?

Inflation is going down; instead we're seeing deflation now.

Banks are forced (by their own governments) to hand the rate cuttings AND the money they received to their customers instead building their own balance sheets and that's a good thing because if they don't they bring their own clients in deep problems especially what the mortgages are concerned and the credit lines, needed by businesses to continue buying/producing/trading.

All kinds of merchandise, from cars to television sets, mobiles, furniture, textiles are going down in price. Factories are forced by buyers to bring the prices down whilst on the other hand factories are trying to raise their prices because orders are declining. Guess who's winning.

A business friend of mine, producing/buying large quantities of furniture for Hotels, restaurants, convention centers etc. will travel to Romania next year to see if he can do business there instead China, also because of the rising dollar versus other currencies.

Lots of things going on now but hyperinflation....? I don't think so.

Deflation is as dangerous if not more as inflation.

LaoPo

[Khun Jean]

I not mean that i see it, i am curious what will happen.

If i own a house currently worth 2 million baht with a mortgage for 1 million baht. What will happen when you get hyperinflation. Is the debt of 1 million baht still the same?

For example when a plate of pad that is 2000 baht will the debt to the bank will still be 1 million baht, or to say it differently is the debt going from 50.000 plates of pad thai at that moment 500 plates of pad thai.

[Mosha]

The debt is still for the original amount. What happened in the UK in the 80s was interest rates went through the roof and my workmates , who had borrowed money when interest rates were low. Suddenly found they were struggling to make repayments, and we were realatively well paid at the side of other workers in our area.

[flying]

I not mean that i see it, i am curious what will happen.

If i own a house currently worth 2 million baht with a mortgage for 1 million baht. What will happen when you get hyperinflation. Is the debt of 1 million baht still the same?

For example when a plate of pad that is 2000 baht will the debt to the bank will still be 1 million baht, or to say it differently is the debt going from 50.000 plates of pad thai at that moment 500 plates of pad thai.

Your contract remains the same.

You borrowed 1 million hopefully at a fixed rate & that is what you owe.

What the hyperinflation hopeful folks want is their pay to also hyperinflate which it should since as you say a plate of pad is 2000 baht

In which case who knows you could pay off your house in a week if your wages also hyperinflate

Then again I wonder who will have jobs at that point?

[QED]

Look at Zimbabwe if you want an example of hyperinflation. A few months ago they had to knock 5 0's off their currency as it was costing several million dollars for a loaf of bread.

When you get to that situation financial institutions have already gone to the wall years ago, along with any form of industry. Most of their trade is now done by barter, and the property prices have plummeted rather than keep up with the hyperinflation.