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by oceanofsolaris 1080 days ago
What do you hedge your 100 year financial vehicle with? AFAIK there just isn’t anything that allows you to hedge against interest rates 50 years in the future.

So while this probably works out (especially if there is high inflation or high interest rates for some of the 100 years), I think the upside as a borrower is very limited, especially if this ends up being popular (if interest rates fall to 1% next year and stay there for 100 years, you didn’t get a great deal…you most likely just have a CD in a bancrupt institution).
2 comments
kasey_junk 1080 days ago
The US has 50 year mortgages and 100 year lease terms on certain real estate holdings are not extraordinary. Japan even had 100 year mortgages in the past.

FDIC insurance would cover the case where the bank went bankrupt. This is a strange financial instrument and I’m skeptical of it, but it’s not outlandish compared to other long held instruments like annuities. There might be some place for it in certain peoples portfolio.

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lmm 1080 days ago
> What do you hedge your 100 year financial vehicle with? AFAIK there just isn’t anything that allows you to hedge against interest rates 50 years in the future.

I mean the simplest answer would be to buy 100-year government bonds, there are at least a few countries that do those.

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