RE: Inflation or deflation, what will hit us first?
Dear @achim03
Interesting choice of topic. I often wonder, how will world economy look like once this storm will hit the fan.
We might face a hyperinflation but I'm not so sure about it.
Hyperinflation usually only occures within smaller economies, and also mostly when they accompany currency crash. So I would also expect inflation (in a long term), but not hyperinflation.
For every dollar in circulation, there is somewhere a dept of one dollar. Let's say a bank loans you 100'000 USD to buy a house. They will create an account and they will deduct 100'000 USD from this account. They will transfer this money to your savings account.
I've been always wondering - what does happen if person who borrowed money, or company which took a loan - stopped to exist.
Let's say that I got a morgage, 100k euro. So 100k new euro will be created (based on my new debt). And let's say I die after paying only 10k. What then?
The bank is scared that you can't pay back your dept and they will foreclose your house.
In theory. I believe, that in reality - banks would be to scared to do that. It's like asking to have riots on your hands. In times of C19 crisis it could be very unwanted.
Yours, Piotr
I think this depends on the country. Normally it goes into the whole package of inheritance. Before any inheritance is distributed, the loans are deducted and paid back. The Kids can then decide to accept or not their inheritance. Normally the bank will have the paper of the house and it can sell the house to cover the loan.
Thanks a lot for your comment my friend,
Achim
Dear @achim03
Thanks for being always so reponsive. Have a great sunday ahead,
Yours, Piotr