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Old 04-03-2013, 01:06 PM   #1
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Stack Phyz or Pay Back Loans??

As a former student I got a few student loans totalling around £10,000. They are linked to the RPI (Retail Price Index) so are fairly low interest.

My question is should I sell some metal to pay them off now, or should I just defer repayment for another year?

Would higher interest rates be negative, or not necessarily as long as PMs keep pace with rates....?

Of course, there's always the hope that I'll never have to pay them back and will get to keep all the metal instead! But that would probably require a pretty serious collapse...

Thanks for all your thoughts...

A
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Old 04-03-2013, 01:32 PM   #2
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I am a firm believer of having zero debt. However, if your loans are very low interest simply waiting a while will cost you very little to see if metals will go up.

My

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Old 04-03-2013, 02:12 PM   #3
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Debt is the money of slaves.

Just my (Adjusted for inflation)


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Old 04-03-2013, 03:54 PM   #4
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I don't like debt. However, I think not having phyz is even worse.
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Old 04-03-2013, 03:58 PM   #5
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With these regular smash-downs, perhaps a little arbitrage is in your favor. With some luck, patience and perseverance, the 'arb' could cover both the interest and a lot of the principle on that loan. Ten large isn't that much money, so the payments, if stretched across a number of years are potentially manageable.
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Old 04-03-2013, 04:56 PM   #6
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I think higher interest rates are negative for PM's but as I understand it, our debts are so large now that we can't afford to pay higher interest rates. So they will keep interest rates low till our currencies are inflated away and have to be replaced by something backed with confiscated gold.
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Old 04-03-2013, 09:09 PM   #7
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This goes againt everything I've ever thought, but it makes more sense now to not pay them off. And I really, really hate the feeling of being in debt, whether it is for money for a traditional loan or just owing somebody a favor. I don't want to feel obligated to anyone for anything.

With inflation you are paying them back with less valuable money the longer you string out the payments, essentially defaulting on them to an extent. With our negative real interest rates, you come out financially ahead by paying the minimum It seems dirty, and it is, but the whole system is a dirty, unavoidable mess anyways.

One important consideration is the stability of your fiat income stream. How likely are you to lose your ability to make money (and therefore pay the loans) while there is still someone to collect on you? It may make sense to pay things off while the income is available since the job market is unpredictable (except that we can predict that it will continue to suck).

If you do decide to pay your loans faster than minimum requirements I still would not sell metal to do it. I won't sell metal unless it comes down to metal or food (etc.). Of course, that means you can't put everything you have into metals either, some fiat cushion is required.

As much as we like to think about how this will play out, and as much as we may be right, it is really impossible to predict how and when things will happen. Because of this, stay flexible, give yourself options, don't put your eggs all in the same basket, etc.

Approach this as a Swiss[austrian] Army Knife rather than an ICBM.
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Old 04-04-2013, 05:42 AM   #8
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loads of good advice here. If I can add something - if going into debt, try to get FIXED interest rates. While I have hard time imagining, how the Fed could even hint at increasing rates (much less doing so), without bankrupting the whole system entirely - and the governments in the first place - but there is still a VERY REAL possibility (certainty I'd say), that when the time comes to put the stop to the falling currencies - the governments and all their cronies will get a special treatment (including debt servicing/restructurising/bail outs etc) - while the rest of little men will get butchered from yet another angle - with very high interest rates on their debts (after they take on a lot of it - yet again...)
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