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If hyperinflation ensues...
Started by strongboy2005
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hyperinflation is not likely if the fed maintains low rates. It is still a possibility, just not in the short term.
Latest report said inflation is moderating.
Latest report said inflation is moderating.
Awesome question OP, very interesting topic. First off, yes our student loans would be wiped out if we had hyperinflation as long as the interest rates on them are locked in, which I think they are. Whats really interesting is to read old threads on SDN about med students comparing banks and their student loan programs. The government has taken over the student loan industry so private banks are staying out of it. This just leads to higher tuition but thats another story.
As for low interest rates, that will help bring on hyperinflation. With rates at zero, the fed can print at borrow at no cost. However, all that money has to be liquidated in the market at some point. It's just a case of kicking the can down the road. The fed is more concerned with deflation right now bc a lot of pensions are tied into the stock market its crazy. My prediction, although really belonging to free market economists I follow, is that after the fed does QE 8, the money supply will have increased substantially that private industry will react and the market will drive interest rates up. How bad will it be? I don't know. Will the dollar survive? Will we refuse to pay off our creditors? Will there be trade wars? Ya know we had bad inflation in the late 70s. Interest rates hit over 20% in the early 80's I believe. We survived, but the difference was our debt and foreign obligations were a drop in the bucket compared to today. Crazy times. Okay thanks for reading, I find econ fascinating.
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deleted126335
Debtors, particularly those who borrow to buy things like land and businesses stand to do well in hyperinflation. (assuming fixed interest rate debt) They get killed in deflation.
Roll the dice move your mice.
I like it, QE8 for the win!
Despite all the crazy debt that the country has now, I think the fed will manage it well enough that the US will still be an economic powerhouse for many decades to come.
Our Debt/GDP was even higher right after WWII. The stock market was stagnant back then, but we still grew out of that too.
http://www.usgovernmentspending.com/federal_debt_chart.html
http://www.analyzeindices.com/dow-jones-history.shtml
The assumption here, however, is that physician compensation and taxation keeps pace with inflation and an aging population. That is far from determined. And given an aging population and an already unsustainable social security system... Inflation would no doubt cause far more harm than could to your student loan position is my guess.
Hyperinflation would leave an aged population with essentially no income and growing medical needs. My guess is at that point the federal government would extend its tentacles around the US medical establishment and demand service with minimal compensation.
Given the limp-wristed advocacy and leaderships of groups like the AMA, I'd guess they'd get away with it, too.
Hyperinflation would leave an aged population with essentially no income and growing medical needs. My guess is at that point the federal government would extend its tentacles around the US medical establishment and demand service with minimal compensation.
Given the limp-wristed advocacy and leaderships of groups like the AMA, I'd guess they'd get away with it, too.
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