Beware: Dystopian Bankers have arrived

As a collection agency with offices in Edmonton, Calgary and the GTA we are constantly watching with keen interest, the unfolding of global financial events while nervously fretting over their potential impact on Canadian credit markets.

With over $15 trillion in negative-yielding debt around the world Jyske Bank, Denmark’s third largest bank is now offering borrowers mortgages at a negative interest rate, effectively paying its customers to borrow money for a house purchase.

Customers can now take out a 10-year fixed-rate mortgage with an interest rate of -0.5%, meaning customers will pay back less than the amount they borrowed! So theoretically if you buy a house for $1 million and pay off your mortgage in full in 10 years, you would pay the bank back only $995,000.00. So effectively a borrower has to only repay principal, with a small discount, guaranteeing the bank loses money on the loan.

This is the place we now find ourselves. Paying debtors to take on debt while crushing savers who have to suffer negative real interest rates (interest earned less inflation) on their savings deposits.


Sounds not only perfectly logical but long term sustainable doesn’t it?