Runaway inflation eventually. If you are invested in commodities before that time the value of them will go up to meet the relative value of the dollar. The Mortgage however will remain at the dollar amount contracted. So you can sell the commodities at the inflated price and pay off the mortgage at the fixed(ish) amount that was originally negotiated.
Oh I see, so the commodity will be more stable than the currency during inflationary period. So the value of the dollar goes down, the value of the commodity stays the same but the dollar value of commodity will go up by approximately the same amount as the inflation.
Wouldn't real estate itself be a good place to put your money too, as defense against inflation?
Yes, to a degree, real estate is a better place to keep your money than the dollar. In my opinion the real estate market is already inflated however, if you buy on credit and the value of the dollar drops, you can basically steal the property using the inflated value of the commodity that you invested in prior to the drop in the dollar's value.
(post is archived)