Herman Starikov's home page

Herman's notes on Financial Markets

Completed in April 2021 Certificate
So, the idea is, why don't we have a price index and have a debt contract that pays back index to inflation? Then it's fixed in real terms. What could be more obvious? But the history of it is very slow to get going. I've tried to find who is the first person to define that in terms of a consumer price index. There were earlier examples. For example, in Japan, they had rice bonds, and maybe other places too. So a rice bond was a debt instrument that was payable in rice, yes, the grain, instead of a currency. And you're safer with that than in currency if the government might print money, and debase the currency.
You always pay interest on a loan, but the interest is not always fixed for the duration of the loan, it is subject to inflation in consumer prices.
The word mortgage became common in the English language in the late 18th century. And property law wasn't very well developed then. Because it wasn't even clear who owned property. Because there wasn't a system that was well established. So, if you look in newspapers from the 18th century, you'll see a lot of ads, personal ads, placed there, claiming ownership of property. So, when you bought a house in 1750, you first would go through all the newspapers and see if there's any ad placed that says,"I own that house. This guy is cheating me." And then, I have papers to prove it, which would be documents drawn up by a lawyer. So you stay away.
This works in time of peace.
So what is a benefit corporation? It's something half way between for-profit and nonprofit. It has profits, it makes profits, but it has a dual objective. It's for profits and for some social or environmental purpose that is stated in the company's charter. So, an example is Grower's Secret. Grower's Secret is a fertilizer company and their statement of purpose is to restore the NPK balance of the planet.
Coursera is another example of a benefit corporation.