A Penny For Your Thoughts

There is an old Chinese curse – “May you live in interesting times.”

As I was sitting back and watching the global banking meltdown of 2008, I was reminded of the “interest-ing” riddle/parable of “Joseph’s Penny,” which clearly indicates why the US is now dealing in the trillions of dollars of debt, and, has no way out of complete financial collapse (or the more likely – complete economic reorganization) within the next decade.

The riddle goes like this – If at the time of the birth of Christ, Joseph had invested one penny in a bank, and the bank had given him an annual interest rate return of 5%, how much would be in the account if Jesus returned today to check on the account?

Any idea?

Think big…astronomically big.

By now that solitary penny would have earned $45,087,798,213,371,300,000,000,000,000,000,000,000,000 (US Dollars)…. the equivalent of 196,001,952,916 solid balls of 0.999 gold, each weighing as much as the mass of the planet earth.

Take a moment (or an hour) to fully understand that last sentence – the dollar amount is 45,000 trillion, trillion, trillion dollars or about nearly 200 billion planets of solid .999 gold, the size of the Earth. (calculated at $1195 per ounce – December 21, 2014 price).

Now isn’t that the best example of the magic of compound interest we were all taught in school?

To further stretch your imagination, since the Earth has a width of 8,000 miles, imagine a trail of gold balls stretching 1,568,015,623,329,220 miles out into the universe…that’s a cool 266.73 light years!

This means if you left the Earth now, and traveled at the speed of light, it is now theoretically impossible to travel from here to the end of that trail of gold, since the number of golden planets, and therefore distance, is now increasing faster than the speed of light.

Being a bit of a skeptic, when I first heard the story, I didn’t/couldn’t believe the amounts, so, I prepared an Excel spreadsheet, which confirmed them.

In examining the exponential growth rate of one penny at 5% compounded interest, I noticed that during the first 100 years one cent grew only to $1.25. By 200 AD, it had grown to $164.69. But, by the 300th year, it showed over a 2 million times increase over the original investment of a penny – $21,657.10

It was at that point I finally understood why any monetary system that has an “interest” component attached to it is doomed to eventual collapse. I also immediately understood why many religions consider the charging of interest a damnable sin – Islam, Judaism, and, for centuries, Christianity. That was just before the banking industry was formed and I suspect, church leaders of the day were persuaded they could perhaps increase the wealth of their coffers by simply saying the charging interest is now approved, as long as you include the new slogan – In God We Trust, as is on the back of the US dollar.

Now, instead of a penny collecting interest, imagine millions, and billions and trillions of dollars collecting 5, 10 or 15% interest per year. Just how long do you think it would take for the temples of the money lenders to come tumbling down by themselves, without the helping hand of Jesus? And, just how long has our current economic system been in play? A few hundred years, at best.

Yes, the “den of thieves” is now shaking at its foundations, and, while the baling wire bail-out may have stilled the economic waters for the time being, the global devaluation of the US dollar has now begun in full force.

Some people predict Jesus will return “like a thief in the night.” That makes me kind of wonder if he’s planning on closing out his US banking account. Regardless, one matter you can certainly trust is the interesting mathematics of this penny for your thoughts.

Copyright 2014 Eric Booth

Liberal v Conservative finstats

Liberal v Conservative