[ExI] Banking, corporations, and rights (Re: Serfdom and libertarian critiques)
eugen at leitl.org
Wed Mar 2 13:22:58 UTC 2011
On Wed, Mar 02, 2011 at 12:56:07PM +0000, BillK wrote:
> Hey, don't diss compound interest! It's the best thing since sliced bread.
It would have been indeed, if it was true. Reality and linear
semilog plots rarely happen, and even then, not for long.
> Once you've made your first million, it will double in 14 years @5%
If, for most people. And of course a million of what, exactly.
Don't take no wooden nickels.
> (24 years @3%).
3% might appear conservative. Might appear. If it wouldn't
exactly match historic inflation, at least according to
The computation is funnier, if you do it for other currencies,
many of which no longer exist.
And even if you get lucky, you've just been a conduit for
trickle up liquidity.
> For many years I have vainly tried to explain the compound interest
> exponential to mere mortals, with little success.
> Unfortunately this lack of understanding that the same exponential
> applies when they borrow large sums of money means that they find
> their debts increasing rather faster than they expected.
That part of the hoover device works without a hitch.
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