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.