Sunday, July 22, 2012

Debt Ceiling

My folks always warned me that I should never lend money unless I was ready for it not to be paid back -- which might have been some good advice for the folks of Mittenwalde, in Germany. The town of 8,800 lent the city of Berlin some guilders back in 1562, and they'd sort of like their money back. The loan was at a 6% annual rate, and has been figured with compound interest and such to be an amount somewhere in the trillions of euros.

The town fathers of Mittenwalde apparently request repayment every 50 years or so, and have to date been rebuffed. I suspect the real reason is that the European Union is actually asking Berlin not to pay, since trillions of euros these days is about equal to whatever change the mayor of Berlin has in his pocket.

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