11–20 of 57 posts
Why would people not buy extra properties with these mortgages “just in case”? Especially the 10 year one seems low risk and worst case you have a property after 10 years?
Earlier quoted context omitted.
Because the central bank has negative interest? It's the reason commercial banks will refuse to store sufficiently large amounts of cash in a 0.00% checking account (even though they offer it for smaller amounts).
Hmm FED rate is NOT negative?
Why would people not buy extra properties with these mortgages “just in case”? Especially the 10 year one seems low risk and worst case you have a property after 10 years?
Earlier quoted context omitted.
There is no risk free and cost free way to hold large amounts of cash. You can deposit it at a bank, but the bank could go under. You could keep paper cash in a vault but you’d have to pay to guard and maintain the vault. There’s no actual way to just “hold cash”.
Why couldn't you just deposit it with the state's central bank, which is what commercial banks do? Their cash balances are just numbers in an electronic ledger. There isn't some vault with physical cash inside and armed guards on the outside.
In the US, the answer is that the Fed says you can't. There's some good discussion on a recent attempt/request to change this at [0] (Scott Sumner), [1] (John Cochrane), and [2] (Matt Levine).
[0] https://www.econlib.org/why-does-the-fed-oppose-narrow-banki...
[1] https://johnhcochrane.blogspot.com/2019/03/fed-vs-narrow-ban...
[2] https://www.bloomberg.com/opinion/articles/2019-03-08/the-fe...
Can you get a Danish loan to fund the purchase of a foreign (ehem U.S.) residence?
This seems like a good place to ask the question: how is it that we're seeing $15T of bonds worldwide trading with negative yields? [1] TFA suggests this is due to structural factors--institutions that are required by law to own AA/AAA bonds. Is this some deficiency in the law or corporate governance, that cash in this circumstance isn't considered a substitute for a negative-yield bond? Its net present value would b…
Great question. Not sure I have an 'answer' but think it has something to do with the demand for money today vs the demand for money tomorrow. Lots of the world's money is being held in the hands of those with...a lot of money. Those people tend not to need money to spend it, and are looking for places to park it. Meaning there is a large supply of money today. Meanwhile, lots of people need money, but there are fewe…
In an ideal world, the government would borrow money and spend it in infrastructure and social projects; this would keep people employed, and employed people would be saving less for rainy days but spending a bit more, keeping the economy spinning and demand up.
So nowadays people with money don't know where to put it to make it grow, incredibly this has also lead to Bubble 2.0, investors being attracted to startups like Uber or food delivery crap where they use investor money to build tech to exploit the under-employed (see above), because, well, these "unicorns" promise good ROI!
Earlier quoted context omitted.
There is no risk free and cost free way to hold large amounts of cash. You can deposit it at a bank, but the bank could go under. You could keep paper cash in a vault but you’d have to pay to guard and maintain the vault. There’s no actual way to just “hold cash”.
Why couldn't you just deposit it with the state's central bank, which is what commercial banks do? Their cash balances are just numbers in an electronic ledger. There isn't some vault with physical cash inside and armed guards on the outside.
Can you get a Danish loan to fund the purchase of a foreign (ehem U.S.) residence?
This was my reaction too. If any Danish banks are reading this and want to make a juicy half percent, hit me up.