Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
It can work as long as not all of the proceeds are reinvested. A consol paying 7 % can be perfectly sustainable. Expecting to be able to take the payout from the consol and use it to buy another 7 % consol, and so on most certainly is not.

Compounding interest is usually unsustainable, which is why a prudent lender should insist that interest be paid as it accrues.

This, incidentally, breaks money neutrality. Hard.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Mar 13th, 2012 at 10:24:53 AM EST
[ Parent ]

Others have rated this comment as follows:

Display:

Top Diaries

A Swedish government appears

by fjallstrom - Jan 16
4 comments

What happens now?

by IdiotSavant - Jan 15
60 comments

Too little, too late

by Frank Schnittger - Jan 12
83 comments

A TITANIC success

by Frank Schnittger - Jan 7
36 comments

Perils of a No Deal BrExit

by Oui - Jan 7
103 comments

Review of 2018

by Frank Schnittger - Dec 26
43 comments

Occasional Series