Donations accepted; we offer GOLD ACCESS for enhanced privileges. T-Shirts, caps, coffee mugs? Click here.
BlogTalkRadio - Mondays at 3:30 Central - Yes, TickerGuy has a radio show (kinda)
RSS available
|
|
|
|
|
Detailed market commentary at The Market Ticker and Ticker Classics
(The Year 2011 In Review) Donations accepted; we offer GOLD ACCESS for enhanced privileges. T-Shirts, caps, coffee mugs? Click here. BlogTalkRadio - Mondays at 3:30 Central - Yes, TickerGuy has a radio show (kinda) RSS available
|
||
| MarketTicker Forums Single Post Display (Show in context) |
User: Not logged on
|
| Top | Login | Control Panel | FAQ | Register | Logout |
| User Info | Why we will experience deflation; entered at 2007-12-02 08:36:37 | |||
|
Swingtrader Posts: 8034 Registered: 2007-08-12 United Oligarchic Goldman Sachs States of America 
|
Ae wrote..I have quite a bit of credit card debt right now, but it is all financed at 0% via balance transfers. I can pay this off, but the cash comes in handy for my biz and I am not paying any interest on it, so is this a good or bad thing in a deflationary environment Man, that's a tough call. I think you're gonna have to answer that from your own analysis of how this relates to your business. Clearly - Debt may be a killer in the future - but this must be balanced with your expectations of how your business will likely perform in the coming scenario. Also, how truly beneficial the cash is to your business. Ae wrote..it is all financed at 0% via balance transfers And if all of a sudden you lose the ability to roll it at preferential rates? Let's say your business starts going down, depletes your cash - then you lose the option of rolling at 0% - and get converted to say 18% or 28%? You are looking at the theoretical considerations - I suggest you look at the practical considerations - part of which relates to your mindset and tolerance for risk. I have worked for myself for roughly 40 years. I have rolled the dice more than once or twice, have made more money than I ever thought I would, and gone to being insolvent for more than I ever imagined. I never filed and made it thru. However, a major reason I made it thru was I began the negative scenario with little debt. If I have no debt, or manageable debt - instead of "quite a bit", I make better business decisions because I know I'm on the line and I cut more ruthlessly, and make more realistic decisions. In my case, a cushion of debt - tends to alter the decision making process in a manner that is not beneficial. That's just me, you may well perform differently, have a different mindset (likely you will be different) and may have different priorities and concerns. Just wanted to give you some thoughts to help you think it through to the best decision. I know that for me, the best decision would be to immediately reduce the debt to a level that is not "quite a bit" and would be manageable under most foreseeable scenarios. However, that may not be the best decision for you - so I suggest just think it through in terms of how it relates to operation of your business and your own manner of functioning. I do realize that I am not answering the specific question that you asked - just trying to help you think it through HTH Last modified: 2007-12-02 08:49:42 by ciga
| |||