2. Existing loan? Let say RM500k, Islamic fixed rate. I manage to work as a cleaner in a restaurant during hyperinflation and they pay me RM1 trillion per hour. Can I pay my loan? If no, is there are specific bank's t&c that allow them to restrict us to pay?
Bro prophetjul, i thought you can spoon feed me. Instead have to goog and read.
Q 1, answered. Q2, I will read it first....
............................
Unbelievable.... I found it! After jumping from page to page, website to website and almost ask to be spoon feed, there it is.....
"Contractually there is often no bar to a debtor clearing his long term debt with "hyperinflated-cash" nor could a lender simply somehow suspend the loan. "Early redemption penalties" were (and still are) often based on a penalty of x months of interest/payment; again no real bar to paying off what had been a large loan. In interwar Germany, for example, much private and corporate debt was effectively wiped out; certainly for those holding fixed interest rate loans."
oh easy? So what happen to all the bank in Malaysia? Do you think people still want to own asset in Malaysia if that happen? all the basic necessity things will be the most valuable things if that happen( water,food etc...).
just my 2cents
I think you missing the point (or I wrote it wrongly )
Thing happen before, during and after is all a different world.
Extreme case. Today, for RM500k loan, I can buy a nice bungalow, at 5 acres land near water sources at Malacca and another RM500k personal loan I will buy Gold.
Tomorrow hyperinflation happen.
We are all will searching for shelter, water and food but I basically have nice bungalow and gold free from debt and another person worrying about country investment have....
Do you think you alone staying in nice bungalow and having 500k gold is safe when others or millions people are searching for shelter, no water, no food just outside of your bungalow?
Hyper-inflation often associating with social unrest and little people have faith in a hyperinflation countries economy nor want to own anything in the country, and doing business there, because the currency can be worthless.
Added on September 19, 2011, 5:37 pmFeel good about hyperinflation that can solve your debt problem? You lose even more.
Don’t get me wrong. The example is on the extreme side. It is not about hoping to settle debt during hyper. It is about taking advantage during extreme economic climax. If God will, like you, we also can survive without working in 2 years without touching our fixed assets and PM.
Nobody wants recession or hyper. But when it is happen, people who is ready, is benefit the most. Recession, people with full loaded cash can accumulate quality asset at a bargain.
And it just happen that, during hyper, people with debt, according to German history, they can settle it with inflated hyper cash. Bonus to people with good debt: properties, land, gold, they can use it during the time.
According to Mike (ya..ya.. I know he is quite bias), people have some misconception. “People get a picture in their head, during economic disaster, that is going to be a like a nuclear waste land afterward. It is not, all the building is still going to be there. It is just they are going to be in sale. The problem is, when investment is on sales, nobody is going to buy”
But let say, situation is worst, I will not put a billboard ala Last Vegas saying “There is no Gold inside my house”. I will be like all other people, searching for food, looking for water and joining them. That is survival. Like now, I have PM, but all they see in front of my house is one kapcai made in China.
And foofoosasa, according to this real video, during real recent hyperinflation, yes people still did not eat gold, but they can used it to get food. And again, I will not melt my gold and wearing it like Mr T, common sense.
Recession: Quality asset can turn into junk in recession, how one can assure it will be quality in the future? Nobody can ascertain of. Look at Japan, more than 2 decade already aftermath of RE bubbles, still not fully recover.
Hyper: You RM10 cash under the pillow still a Rm10, it won't grow due to hyperinflation. Only when you income grow exponantial in hyperinflation time.
Nobody want to lend you money in hyperinflation situation, who is the fool to lend you money in a hyperinflation situation? Banking system may not even exist or run properly. Loan? where to get?
You cannot take in what happened during stability time and put into those extra-ordinary time and expect it works the same (banking system). It doesn't work this way.
See how Lehman filing bankruptcy can cause the entire financial market into liquidity freeze, all stand still. All financial game change during that time. People fear about banks ability to return on money, instead return of money.
War, buy building? buy asset? buy stock? If really war, then it means we are talking of changing gov entirely. So the new gov will recognise this building is owned by you or not? They can just confiscated like that, why you can do? Nothing.
Stop believing nonsense, no offence, if bad situation happens, everyone is the loser. Nobody gain if war coming, nobody gain if economy run into crisis, chaotic situation.
It is aftermath, when thing settling down, aka the new era, you can take advantage of, because it start off clean or all over again. But again this may mean you lose everything previously.
I don’t know. I had tried to present based on history, what is real happening. Until tomorrow is coming, nobody can predict what is going to happen.
What I do today, is what I think the best for my family at least based on what people were actually doing in past.
Sep 19 2011, 09:12 AM
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no offence, if bad situation happens, everyone is the loser. 
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