Personal Finance and Investing
In reply to the discussion: I'm wondering...would it be better paying off my mortgage (80K) or keep the money in market investments? [View all]HariSeldon
(517 posts)If inflation spikes, holding a fixed-interest loan is like watching water evaporate in the desert: the loan still pays off according to it's predetermined schedule using nominal dollars, but each of those dollars gets easier and easier to earn via inflated prices (if you're still working).
High inflation usually causes the Fed to jack up interest rates, which makes business reluctant to invest in additional productive capacity. In short, most businesses will tank to some extent if Trump follows through on the plans he expressed in his campaign.
Commodities are a large part of how inflation is determined. I therefore expect commodities to roughly track inflation.
The fact that any of Trump's loans (I mean, he's called himself "The King of Debt" that are fixed-interest will effectively melt away if he drives up inflation pretty much tells me how he'd like inflation to behave.
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