[Kylon]

If the dollar is about to collapse, wouldn't it be wise, to borrow a huge amount of money, then invest it in something like gold, or silver, or oil, then when the dollar collapses, sell some of the oil, and since the dollar collapses, and it's value goes to squat, then repay the debt?

I mean, if we knew when the dollar was going to collapse, it would be an easy fortune.

Some one borrows large amounts of money, then they invest in commodities that won't depreciate in value, then as the dollar depreciates horribly in value, so does their debt.

If the dollar collapses by 50%, or 70%, then so does the debt, then the debt can be paid back at lower rate than invested.

What does everyone think?

[Jack]

$this->bbcode_second_pass_quote('Kylon', '
')I mean, if we knew when the dollar was going to collapse, it would be an easy fortune.

[Kylon]

What will probably happen is whichever political party has all the power is going to do this, but tip off their friends/contibutors to the whole process, so their friends make a fortune, while the rest of us are messed over.

[pitzel]

The Canadian government gives its citizens a massive tax deduction for doing exactly this -- borrowing fiat currency, and investing into hard assets and businesses.

On an after-tax basis, once the tax credit has been incorporated into the calculation, it costs than the rate of inflation to borrow.

The key is, of course, to not go too crazy with such borrowing/investing. Because there will be fluctuations in the market, and an ill-timed margin call can destroy a lot of capital very quickly.

Of course, you need to already own some investments up-front to make it work, because no bank will give you a loan on favourable terms without placing at least some quality liquid collateral down.

[Anthrobus]

Kylon,

among investors a favourite quotation ist that "the market can stay irrational for a longer time than you can stay available with your money"

A slightly better investment would be to buy a million tons of oil and store it somewhere safe for several years. At least, if you believe in peak oil.