What it really means is that with free money, Danish real estate (whose value is leveraged on credit money, ie promises) has only one way to go, and it’s up. The problem then is that once free money is there, it will take some time to get out of it. Savers will have more difficult time, whereas good quality borrowers are getting paid to borrow money. A world upside down.

In Europe, Euribor 12 months, the benchmark rate on which banks lend money, is getting even further into negative territory. It was at around -0.1% for the last two or three years. I was thinking it was too good to be true, and would not last, but no: it will last. A few months ago, my Spanish bank (I have a kind of jumbo mortgage on variable rate Euribor 12 months + 0.9%) called me several time to offer me to fix my rate for 5 years at 2.5%, to mitigate against the risk of European interest rates going above and beyond reason… I politely declined and said that on the contrary, if they could lend me more at this current same rate I was paying, I would be delighted… they did not find it useful to them to reply… Well, a few months later and I have the reason why they called in panic… Euribor 12 months is now at -0.33%. And considering the latest views of the ECB, it’s not going to reverse any time soon. We are headed towards a Danish scenario in mainland Europe… Maybe they will not go too negative, maybe they will stop at 0.5% interest for 20 years... I would take one mortgage like this every day if I could! Free money.

It's slways useful to play with a mortgage simulator...

What it really really means is that the monetary system is somehow broken… Something is gonna give sooner or later… Maybe another depression / crash is not too far away… I am starting to take some insurance on my pension fund…

To your journey!