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<p>[QUOTE="Cloudsweeper99, post: 638808, member: 3011"]In theory this can work. In practice a lot can go wrong. I might work as long as:</p><p><br /></p><p>1. The assets purchased with the borrowed money rise in value at a rate greater than the interest on the debt [a decrease in value is economic death].</p><p><br /></p><p>2. You have such a secure income stream that there is no possibility of losing your job or no possibility of business declining if you are a business owner.</p><p><br /></p><p>3. The bank, regulators or government don't change the rules to protect the lender at the expense of the debtor.</p><p><br /></p><p>4. The inflationary rise doesn't spin into a deflationary collapse.</p><p><br /></p><p>5. The bank which lent you the money isn't taken over. In the late 80s, distressed banks that were forced to merge were permitted to reset rates on loans and/or call them.</p><p><br /></p><p>6. The economy doesn't unexpectedly return to normal.</p><p><br /></p><p>This is only a sample. There is no easy way to beat inflation, even with gold.[/QUOTE]</p><p><br /></p>
[QUOTE="Cloudsweeper99, post: 638808, member: 3011"]In theory this can work. In practice a lot can go wrong. I might work as long as: 1. The assets purchased with the borrowed money rise in value at a rate greater than the interest on the debt [a decrease in value is economic death]. 2. You have such a secure income stream that there is no possibility of losing your job or no possibility of business declining if you are a business owner. 3. The bank, regulators or government don't change the rules to protect the lender at the expense of the debtor. 4. The inflationary rise doesn't spin into a deflationary collapse. 5. The bank which lent you the money isn't taken over. In the late 80s, distressed banks that were forced to merge were permitted to reset rates on loans and/or call them. 6. The economy doesn't unexpectedly return to normal. This is only a sample. There is no easy way to beat inflation, even with gold.[/QUOTE]
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