Notes, Inflation and Devaluing of Money

[Joshua Andrews]

I have an interesting question I hope a few folks can give me some feedback regarding. I acknowledge up front some of you may not agree with this line of thinking, or even admit it "could" happen in the future, but here goes anyway.

Historically there have been multiple devaluations of paper currency to the point of collapse. It is usually a slow road to these conclusions, and oftentimes we think we as the United States are impervious to a catastrophe like this. However as I see things unfold over time I become more and more concerned for our long-term future.

My question for you is how do you suppose a note, mortgage 1st deed of trust or whatever, would still be enforceable if the dollar reaches zero or was ultimately replaced with another currency? In fact this would apply to almost any contractual agreement, car note, your cellphone bill, mortgage, etc. If the agreement is stated in $XX dollars, what would happen if the "dollar" becomes worthless at a future date?

I realize this may seem like worrying or far fetched to some, but I'd like to hear constructive feedback, specifically any historical instances where this has taken place in other countries. To date I have not been able to find information on what actually happens to contractual obligations (such as a mortgage) when the currency is devalued to zero or replaced.

Thoughts or feedback appreciated!

Josh