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Wed Aug 14, 2019, 09:01 AM

Banks are paying people to borrow money. That's alarming news for the global economy.

For Americans accustomed to paying 4 or 5 percent mortgage rates, let alone the double-digit figures consumers endured in the early 1980s, the new loan from Denmark’s Jyske Bank might seem inconceivable.

The Danish lender last week started offering home buyers 10-year mortgages at an interest rate of -0.5 percent. That means borrowers over a decade will pay back a little less than the amount borrowed, not including one-time fees.

This highly unusual condition may be good for Danish home buyers, but economists say it’s an alarming sign for the global economy. Several major governments and more than 1,000 big companies in Europe are now able to effectively borrow from global financial markets at a negative interest rate. For Jyske Bank, that means it can then turn around and lend money at a subzero interest rate, too.

The amount of this type of debt, issued as government or corporate bonds, has doubled since December and now totals $15 trillion.

https://www.washingtonpost.com/business/economy/banks-are-paying-people-to-borrow-money-thats-alarming-news-for-the-global-economy/2019/08/13/8eb7b9ca-bada-11e9-a091-6a96e67d9cce_story.html

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Reply Banks are paying people to borrow money. That's alarming news for the global economy. (Original post)
Zorro Wednesday OP
at140 Wednesday #1
qazplm135 Wednesday #2
malthaussen Wednesday #3

Response to Zorro (Original post)

Wed Aug 14, 2019, 09:09 AM

1. Denmark thinks interest rates is the only factor to stimulate economy?

Interest rates is just one factor. Others are transaction taxes, regulations, VAT, etc.

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Response to Zorro (Original post)

Wed Aug 14, 2019, 10:13 AM

2. So curious

Could an American get such a loan from that bank?

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Response to Zorro (Original post)

Wed Aug 14, 2019, 12:11 PM

3. I've always wanted to live in Denmark...

... I just can't get into the whole beer-and-cream-cakes habit.

-- Mal

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