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Old Today, 11:53 AM
 
11,130 posts, read 4,145,677 times
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Quote:
Originally Posted by Rachel976 View Post
So why not just keep cash in your safe deposit box? You'll get back exactly what you put in.
I agree that I would rather have currency under my mattress than this. But the amounts discussed in the article in the OP are up to over $16 trillion of this negative interest rated debt in just the last nine months. There is not anywhere close to that much currency.

Personally, this does not look very attractive at all to me. I do not know who these people are or exactly what their thinking is. But I am definitely taking a pass on this.
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Old Today, 11:56 AM
 
1,645 posts, read 315,858 times
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It also serves as an incentive for banks to lend money out. It's a tool to fight deflation..stimulate borrowing and lending.
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Old Today, 12:08 PM
 
11,130 posts, read 4,145,677 times
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On a similar note, a bank in Denmark is now making mortgage loans with negative interest rates. The term is only ten years, but you get to pay back less than what you actually borrow.

Quote:
Bank will pay customers to take out mortgages by offering negative interest rates in Denmark

A bank in Denmark will effectively pay qualified home buyers who take out a 10-year fixed-rate mortgage.
Jyske Bank, the third-largest bank in Denmark, announced Monday that it would lend to prospective homebuyers at an interest rate of -0.5%.

Other banks in Denmark are offering notably low mortgage rates: Nordea Bank will provide no-interest 20-year fixed-rate loans, Bloomberg reported, while some lenders are offering 30-year loans at 0.5%.

“It’s never been cheaper to borrow,” said Lise Nytoft Bergmann, chief analyst at Nordea Bank’s home finance division in Denmark, to Bloomberg. “We expect this to contribute to driving home prices higher.”
This is nuts. So if you borrowed $500,000 for 10 years under this mortgage, your payments back would total $487,500.

Something is wrong here, people. Keep your eyes peeled.
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Old Today, 12:21 PM
 
13,265 posts, read 4,561,413 times
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Quote:
Originally Posted by Spartacus713 View Post
On a similar note, a bank in Denmark is now making mortgage loans with negative interest rates. The term is only ten years, but you get to pay back less than what you actually borrow.

This is nuts. So if you borrowed $500,000 for 10 years under this mortgage, your payments back would total $487,500.

Something is wrong here, people. Keep your eyes peeled.
Yes definitely something isn't right. There HAS to be a catch to it, some sort of scam that's going to hit these borrowers. Why wouldn't the banks just not lend and keep their money? I don't get these situations at all.
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Old Today, 12:24 PM
 
1,645 posts, read 315,858 times
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Quote:
Originally Posted by Spartacus713 View Post
On a similar note, a bank in Denmark is now making mortgage loans with negative interest rates. The term is only ten years, but you get to pay back less than what you actually borrow.

This is nuts. So if you borrowed $500,000 for 10 years under this mortgage, your payments back would total $487,500.

Something is wrong here, people. Keep your eyes peeled.
Cash back mortgage ? lol
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Old Today, 12:25 PM
 
Location: 15 months till retirement and I can leave the hell hole of New Yakistan
25,452 posts, read 14,180,396 times
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Quote:
Originally Posted by Dbones View Post
Why in the world would anyone want to buy them? That's some strong glue they are sniffing over there.
investors who are buying now with -rates...are betting rates will go up
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Old Today, 12:25 PM
 
1,645 posts, read 315,858 times
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Quote:
Originally Posted by Dbones View Post
Yes definitely something isn't right. There HAS to be a catch to it, some sort of scam that's going to hit these borrowers. Why wouldn't the banks just not lend and keep their money? I don't get these situations at all.
Happened during the great recession and the money flew over here to our banks and into our Treasury via huge bond purchases.

The US was safe haven.
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Old Today, 12:28 PM
 
10,204 posts, read 6,972,515 times
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Quote:
Originally Posted by Spartacus713 View Post
I agree that I would rather have currency under my mattress than this. But the amounts discussed in the article in the OP are up to over $16 trillion of this negative interest rated debt in just the last nine months. There is not anywhere close to that much currency.

Personally, this does not look very attractive at all to me. I do not know who these people are or exactly what their thinking is. But I am definitely taking a pass on this.

Maybe they are not "people"....but entities making purchases to keep the global economy afloat. I think the "fundamentals" of the global economy, and certainly our domestic economy, are weak. It's like a Ponzi scheme right now.


I think a big part of the problem "trying to push a string....if you will" comes from the fact that the increase in the money supply is mostly impacting the rich and wealthy who will then tend to invest more than spend. The economic impact of increasing the supply of money would be more economically stimulating if that money went into the hands of people who would spend most of it, as opposed to investing most of it. That would be the poor and middle class. We have to figure out a way to get more money to poor and middle class peoples.
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Old Today, 12:31 PM
 
13,265 posts, read 4,561,413 times
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Quote:
Originally Posted by workingclasshero View Post
investors who are buying now with -rates...are betting rates will go up
Yeah I don't know much about buying bonds. When you buy them the rates can change? I would have thought you were locked into the rate at time of purchase.
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Old Today, 12:34 PM
 
1,645 posts, read 315,858 times
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Quote:
Originally Posted by Dbones View Post
Yeah I don't know much about buying bonds. When you buy them the rates can change? I would have thought you were locked into the rate at time of purchase.
But you can sell them on the open market and the price depends on current rates.

It's only locked in if you hold it to maturity.
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