I have heard that the best advice would be to borrow as much as possible before tshtf and use it to prepare. After tshtf, repayment of credit cards will not be a priority, and if you borrow it at a fixed interest rate, then the hyperinflation means that you are paying it back with seriously inflated dollars, so who cares... I do have an ethical issue with running up debt knowing that I may well just default on it.... That being said, current laws in the US do not allow creditors (other than the bank who holds your mortgage) to throw you out on the street and seize your house. The most they can do is put a lien against your house so that if/when you do sell it, they will get some of the money..... So Fernando, what happened in Argentina to credit card defaulters?
Hi Mike, I feel I should ask, where did you get that piece of advice?
I'm no survivalist guru, but my humble experience is that you sure as hell shouldn't get into debt to prepare.
It is true that if, for example, in 2001 you had a loan in dollars and afterwards you only had to pay in a 1 to 1.4 ratio when it really was 1 to 3.5, sure that was pretty good, but playing that game is VERY risky. You're practically betting on an economic collapse, and doing so with some accurate date estimations. You might as well go to the casino and play reds. At least that's 50/50 chance.
Now, going into debt on your credit card and planning to not pay back. That may work for a total bum, but not for a serious person.
First, its not just interest, its also the extra charges and expenses that quickly add up.
Here in Argentina, a debt can quickly double in a matter of months, just on lawyer expenses or whomever "bought" your debt.
Still planning on not paying? As you wait it only gets worse, the debts turns into a snowball that keeps growing.
Then one day you need a loan for your business or get married and want to buy a house, sell the one you have for whatever reason, moving to something smaller or bigger, then the problems start for real. You can't sell your house without losing a ton of money ( the debt+interest+expenses)Your financial history is a nightmare that no one will get close to.
Eventually, you'll have to pay or live like Tom Hanks in "Stranded", at least in financial terms.
Still sure about going into debt counting on an economic collapse?