Skip to comments.Cash-strapped Berlin stalked by 450-year-old trillion-Euro debt
Posted on 07/19/2012 8:41:06 PM PDT by JerseyanExile
The sleepy hamlet of Mittenwalde in eastern Germany could become one of the richest towns in the world if Berlin were to repay it an outstanding debt that dates back to 1562.
A certificate of debt, found in a regional archive, attests that Mittenwalde lent Berlin 400 guilders on May 28 1562, to be repaid with six percent interest per year.
According to Radio Berlin Brandenburg RBB.L, the debt would amount to 11,200 guilders today, which is roughly equivalent to 112 million euros.
Adjusting for compound interest and inflation, the total debt now lies in the trillions, by RBB's estimates.
Town historian Vera Schmidt found the centuries-old debt slip in the archive, where it had been filed in 1963. Though the seal is missing from the document, Schmidt told Reuters that she was certain the slip was still valid.
(Excerpt) Read more at in.reuters.com ...
Yes, I remember my great, great, and a few greats grandfather signing this loan document.
I’m here to collect what is owed to me now.
No small bills or loose change. I am willing to negotiate a couple of zeroes off, out of good will.
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Thanks JerseyanExile.Mittenwalde lent Berlin 400 guilders on May 28 1562, to be repaid with six percent interest per year.It would be cheaper for Berlin to just annex Mittenwalde. ;')
It looks like Greece and the rest of them are going to have to to the end of the line.
Maybe they could pay it in Weimar-era money. I think I have some 200 billion Deutschmark stamps (uncancelled) downstairs, which an older neighbor who collected stamps gave to me when I was a kid. I remember thinking that with that kind of money, I could buy a sizable German city with it!
“Adjusting for compound interest and inflation, the total debt now lies in the trillions, by RBB’s estimates”
I know it makes for a more interesting story but, debt service isnt adjusted for inflation after the loan is made. you make a loan, set the interest rate and the payment terms and off you go.
I don’t know why you would adjust for inflation. A debt is a debt, it had an interest rate associated with it, and the total owed now would be the original principle plus all the accumulated interest.
It does look like the interest rate was high enough to cover inflation though.