Do all those home owners who still want top dollar for their property (despite the Great Recession) then turn around and raise their home price from $985,000 to $4,385,000 because.....well - the dollar doesn't buy as much as it used to?
What happens with hyper inflation is daily, maybe even hourly, devaluation of the currency.
Germany, prior to WWII, experienced hyper inflation. Shop keeper would write on a blackboard outside the store the days multiplier. For instance, let’s say an item was marked 1 Reichsmark,. You would multiply that number by whatever was on the sign out front.
Ordinary people who save their money will have their savings wiped out, just trying to buy food.
Big business, on the other hand, likes hyper inflation. Why? Because they’re paying back very large loans with currency that has become worthless.
Our government wouldn’t mind hyper inflation, either, for the same reason.
If hyper inflation happens, and it well could, the value of a home is the least of anyone’s worries.
Look at California and you will say yes. Housing here skyrocketed and even though none are selling, prices have not dropped as severely as you would think. Most homes are over $100,000 even for run down fifty year old houses. I guess they have always thought there was gold in the ground under them.
Your mortgage amount stays the same, but you can pay off your home debt with inflated dollars. Sounds nice, but the rest of the story is not pretty.
Problem. We are headed for severe stagflation. The economy will be depressed and inflation will rage.
Sure - except the banks are smarter this time - they'll get Obama to raise your mortgage payments - high enough so we're all a nation of renters. Goldman Sachs will own it all... well, all that's not owned by the Chinese...