Mortgage rates in Italy are back below 2% for a 20y fixed. 🤯
Think about that for a second. I don't know what the real inflation rate is but it's certain that the banks are losing at least 5-7% now, and swallowing the uncertainty of the next 20 years.
Makes you wonder what their real incentives are...
That is an unreal fiat short opportunity
Right… one thing is for sure… the fiat system has never played by defined and clear rules… and this is another example considering that banks do not like losing money…
They are not losing anything as they don't really need to borrow this money, they just print it, cost zero, get your monthly money in. They win, everybody else loose.
This. Just less profits, no losses.
What if they are just nice?
Wow. I guess the incentives are getting young people to consume and build houses. What else?
This article explains the banks' incentives.
https://open.substack.com/pub/f0xr/p/the-big-bank-lie?r=3i492j&utm_campaign=post&utm_medium=web
They aren't losing anything. Once you understand how banks actually work, a lot of other things will make more sense to you.
If you're able to buy a house at those rates, the banks are giving you an amazing opportunity to short fiat against a hard(ish) asset for 20 years.
Good link, thanks.
The banks are going to make a profit off of those mortgages because we're re-entering a deflationary era. The long-term Italian debt curve is heading back down.
Is anyone buying those with real money?
Slower inflation is not the same as deflation.
It basically is because they can never keep it stable, for long. It's always trending up or down.
Here's the euro area yield curve. Some of the countries already issue longer-term paper under this curve.
