FARK.com: (7229824) As if Berlin does not have enough problems already, they are still on the hook for a 450 year old debt to a sleepy hamlet

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		As if Berlin does not have enough problems already, they are still on the hook for a 450 year old debt to a sleepy hamlet (news.yahoo.com)		42
		More: Asinine, Berlin, euro crisis, money back guarantee, German capital, Berliner Zeitung, Dan Pfeiffer, debts, town centre

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10084 clicks; posted to Main » on 24 Jul 2012 at 11:19 AM | Favorite | share:

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ZAZ		2012-07-24 09:06:17 AM

Adjusting for compound interest and inflation, the total debt now lies in the trillions, by RBB's estimates.

Under 16th century proto-German law, do loan contracts charge simple or compound interest by default?

BunkoSquad		2012-07-24 09:09:20 AM

The bill took their breath away.

JerseyTim		2012-07-24 09:11:13 AM

This story really takes m...

BunkoSquad: The bill took their breath away.

AWW DAMMIT!

MisterLoki		2012-07-24 11:22:18 AM

This text is now purple		2012-07-24 11:27:48 AM

ZAZ: Adjusting for compound interest and inflation, the total debt now lies in the trillions, by RBB's estimates.

Under 16th century proto-German law, do loan contracts charge simple or compound interest by default?

I suspect the separation of Berlin and Mittenwalde into separate warring nations at various times in the interim has dissolved that legal obligation.

EngineerAU		2012-07-24 11:29:18 AM

Adjusting for compound interest and inflation, the total debt now lies in the trillions, by RBB's estimates.

Why would they adjust for both interest and inflation? One is to deal with the other.

Also hasn't the German currency gone bust a couple of times since the loan was made? Sounds like trying to collect on a debt made in Confederate currency.

wambu		2012-07-24 11:29:31 AM

"This case shows that debts always catch up with you, no matter how old they are," Nussbaum told the Berliner Zeitung paper.

i.imgur.com

Agrees.

Solid Muldoon		2012-07-24 11:30:56 AM

LordOfThePings		2012-07-24 11:32:18 AM

Adjusting for compound interest and inflation, the total debt now lies in the trillions, by RBB's estimates.

Interest and inflation? Did the contract stipulate the debt is indexed to inflation? Because part of what interest is for is to compensate for currency fluctuation.

LordOfThePings		2012-07-24 11:33:40 AM

EngineerAU: Why would they adjust for both interest and inflation? One is to deal with the other.

Ah, I see you have this covered. Carry on.

ronaprhys		2012-07-24 11:41:28 AM

BunkoSquad: The bill took their breath away.

I wonder if they found out when they were riding the metro?

AbbeySomeone		2012-07-24 11:43:23 AM

ronaprhys: BunkoSquad: The bill took their breath away.

I wonder if they found out when they were riding the metro?

damn you both! Late to the party, again.

enik		2012-07-24 11:47:53 AM

It came off their credit report in 1569 so they're probably not too worried about it.

Uchiha_Cycliste		2012-07-24 11:53:01 AM

And nothing bad has ever happened because Germany was in debt to others.

Nofun		2012-07-24 12:05:36 PM

LordOfThePings: Adjusting for compound interest and inflation, the total debt now lies in the trillions, by RBB's estimates.

Interest and inflation? Did the contract stipulate the debt is indexed to inflation? Because part of what interest is for is to compensate for currency fluctuation.

Who the fark did this math? Let's assume that the contract does NOT stipulate that the debt is indexed to inflation, which would make sense, and that Berlin has not made any payments yet. Let's assume that the starting debt is about 4 million euros (from the article).

If it's 6% compound interest, and it sounds like it is, Berlin owes this much as of 2012:
976,560,964,452,165,000 euros
That's 976 quadrillion euros. That's a lot more than "trillions."

It's 6% simple interest, then Berlin owes 112,000,000 (112 billion) euros (a lot less than "trillions").

DerAppie		2012-07-24 12:06:33 PM

400×1.06^(450)
=97,656,096,445,216.40

Which is a pretty substantial sum. As people have already pointed out, correcting for inflation is stupid.

BitwiseShift		2012-07-24 12:12:50 PM

Kinda adds one more thing to list of Things to fix in Germany when I get that Time Machine working.

demonbug		2012-07-24 12:13:25 PM

At first I was like, why would a small Bavarian town at the base of the Alps have loaned Berlin money 450 years ago? Then I realized I was off by an e and it made more sense.

Exciting, I know.

kvinesknows		2012-07-24 12:19:39 PM

Seems cheaper to just invade and conquer them and wipe the debt out.

Mock26		2012-07-24 12:21:07 PM

No seal. No debt.

rbt		2012-07-24 12:26:17 PM

It sounds like Berlin defaulted on the debt (didn't make expected payments) and it has a value of $0.

LordOfThePings		2012-07-24 12:30:32 PM

Nofun: It's 6% simple interest, then Berlin owes 112,000,000 (112 billion) euros (a lot less than "trillions").

112 million is even less. They get trillions by doing simple interest, but then adjusting for inflation on top of it.

The Voice of Doom		2012-07-24 12:41:03 PM

EngineerAU
Also hasn't the German currency gone bust a couple of times since the loan was made? Sounds like trying to collect on a debt made in Confederate currency.

Being a jelly donut, I read about this a couple of moths ago and from what I remember, they aren't trying to collect and both sides treat it with humor and as a historical curiosity.

The article I read also mentioned that it's likely that the cities never actually went through with thed deal because the document was only partially translated, missing a signature, had no seal attached and the seal found with it wasn't used before the 17th century.

LordOfThePings		2012-07-24 12:48:05 PM

Smoky Dragon Dish		2012-07-24 12:48:10 PM

Though the seal is missing from the document, Schmidt told Reuters that she was certain the slip was still valid.

Ich rufe Shenanigans

Pathman		2012-07-24 01:02:55 PM

it's prince valium, not sleepy hamlet you dolt

lifetimewow.files.wordpress.com

othmar		2012-07-24 01:07:22 PM

das ist gut

MythDragon		2012-07-24 01:17:30 PM

"I'm sorry, Herr Town Miester. Der zeems to be a problem with ze contract. I zuspect dis vill be da last ve hear of zis, ja? It would be....unfourtunate if a cargo plane carrying zyklon gas vere to...zay....crash here?"

RedVentrue		2012-07-24 01:18:03 PM

They should be payed 11,200 guilders and be done with it.

MythDragon		2012-07-24 01:19:59 PM

FTA:

Berlin Commissioner Vader seen meeting with town historian Vera Schmidt to discuss the terms of the contract

Kirzania		2012-07-24 02:12:33 PM

Once Guilder is blamed, the nation will be truly outraged.

JeffreyScott		2012-07-24 02:41:47 PM

I suspect that Germany's legal system has some-type of statute of limitations, making the debt legally uncollectable.

Handsome B. Wonderful		2012-07-24 02:43:09 PM

Berlin is 63 billion euros in debt? Holy crap.

stonicus		2012-07-24 02:45:02 PM

This reminds me of an episode of Andy Griffith...

Klopfer		2012-07-24 03:09:56 PM

JeffreyScott: I suspect that Germany's legal system has some-type of statute of limitations, making the debt legally uncollectable.

Yes, three years. So they are a bit late to collect.

Harry_Seldon		2012-07-24 03:57:47 PM

BitwiseShift: Kinda adds one more thing to list of Things to fix in Germany when I get that Time Machine working.

Wouldn't you rather go back fifty years and play with Annette Funacello's boobs?

Skyfrog		2012-07-24 04:33:40 PM

Maybe Berlin can just go paint their houses and call it even.

jayphat		2012-07-24 04:36:20 PM

MythDragon: "I'm sorry, Herr Town Miester. Der zeems to be a problem with ze contract. I zuspect dis vill be da last ve hear of zis, ja? It would be....unfourtunate if a cargo plane carrying zyklon gas vere to...zay....crash here?"

THIS. That would be my sole response.

jayphat		2012-07-24 04:38:08 PM

Dude. We reincorporated Berlin in the 1600's, closed off the old one, and liquidated all the assets. We published it in the paper for like 6 months. You should have filed your claim then.

Fark Rye For Many Whores		2012-07-24 04:47:44 PM

Schmidt and Pfeiffer met with Berlin's finance senator Ulrich Nussbaum, who ceremonially handed them a historical guilder from 1539. The guilder was put in a temporary display at the Mittenwalde museum.

Payment accepted, payment fulfilled. Says my GED in law.