Hey,
If, as some are suggesting…. when the current situation of lower interest rates and reduced spending ceases and interest rates start to increase again, the economy will be led into a state of 'hyperinflation'.
What affect will this have on property? I understand that inflation is a measure used to define the growth and strength of an economy and based on the natural cycle of positive inflation property values and other costs increase over time(not accounting for other factors).
So hyperinflation means that its a period of high inflation? does that mean that property values will increase at a quicker rate than usual? or will this be offset by reduced affordability?
If I used a strategy off locking in my mortgages on investment properties at a fixed rate in say 6-12 months for a 5 year period or so, that would insulate me against higher interest rates and I could reap the benefits(capital growth and higher rent) that would come from hyperinflation?
If you could share any thoughts or guidance, its appreciated in advance. Im just trying to see if im on track.
Cheers,
Mick
Hyperinflation is literally printing money out of existence until its value is literally nothing and people start using it for things like wallpaper and firewood, lol
There are dozens of examples of this here…
http://en.wikipedia.org/wiki/Hyperinflation
Though nothing is sure yet if we will see Hyperinflation, Its all up to the government and what they do, But looking at there policy of throwing 52 billion dollars of more paper into the economy every 5 minutes does not make things look good…
What is more probable at this moment is Stagflation, Which is increasing living costs (food ect) and decreasing values of Assets (houses, stocks)
Then there is Deflation which is what we experienced through the Great Depression where the money supply was reduced by 30%+ Prices of everything crashed (This is why the people who DID have the cash bought everything up and made such a killing)
Though we will see very high inflation in the coming years no matter what, Even since the 1990's we have had around 10% inflation per year, The government has been lying though and saying 3%, They get this number from there special formula for calculating it incorrectly using: substitution, weighting and hedonics.
Look at my last post about Silver Investment…
Goodluck
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