Signs of a truly global economy

June huh?

So, I was reading in the Wall Street Journal the other day, and I came across a fastinating article. It was about how some people are taking out mortgages from foreign banks. Why would you do this, you ask? Well, your mortgage rate is based on a currencies fed rate, and in general this drives mortgage costs up or down. In the US the average mortage is about 6.3%. But, in Switzerland, for example, the average mortage rate is 4.7%. This is a drastic difference. It could mean hundreds of dollars different per month for the same mortage amount. A fascinating idea, indeed.

Oh, there is one other thing however. Your mortage would necessarily have to be in Swiss frances. Which are not tied to US dollars. Which means, that essentially this is a play in currencies, where the mortgage is a highly leveraged bet that the US dollar will stay steady or increase in relationship to the foreign currency. Judging from the recent lows that the dollar has achieved, this might not be the best time to venture out into those dangerous waters. But if the dollar has bottomed out... That could make for a very profitable loan indeed...Anyway, another product brought to you by your local global economy. It will be on my list of options when we start looking for a house...Whenever that might be...