Originally posted by Paddy
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The debt the bank accumulates in unpaid mortgages becomes an increasingly onerous expense. As deflation hits the loans become larger than the value of the house. Now since we're not in a capitalistic system anymore the government will organise an event to prevent home owners defaulting. Likely we'll see a bail in, i.e. a haircut from savings of anything over £50k say to pay down the debts on those loans. This is already happening through QE for some years now, it is the number one reason why house prices are increasing. Without capitalism, we'll see QE in reverse, which is a bail in.
Exciting stuff.
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