Grant asks,
How would hyperinflation impact the note business?
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Recently in THE PAPER SOURCE JOURNAL I have been writing about your timely question. Hyperinflation would of course reduce the value of notes. If you create notes you should absolutely have inflation adjustment in the payment terms, that being a gold clause; I’m not a fan of indexing to paper-denominated rates (and certainly not the CPI, which is a transparent attempt by the civil government to make people believe that the inflation they see in front of their eyes doesn’t really exist). If you hold notes, give the payors some incentive to convert them with gold clauses. Sell the notes you cannot convert.
If we have hyperinflation banks will be less willing to lend, so sellers will have to hold paper. The wild card is how much inflation and how long it lasts. If we see Weimar inflation(http://www.usagold.com/germannightmare.html), all bets are off. Notes that aren’t worthless today will be worthless next month.
For several years I’ve also been telling my subscribers, urging, arm twisting, threatening and any other way I can, to buy gold and silver. I still believe “you ain’t seen nothin’ yet.” I’ve often recommended buying from Franklin Sanders at The Moneychanger. He has a very informative website: www.the-moneychanger.com
If hyperinflation is looming on the horizon, should homeowners forget about trying to carry a note? What does this mean for current/future notebrokers?
There are plenty of ways to get ahead. The first is so basic I’m almost embarrassed to say it: spend less than you earn. ~Paul Clitheroe