Saturday, June 13, 2009

Doing Business without money.....

Subject: Doing Business

It is the month of August, on the shores of the
Black Sea. It is raining, and the little town looks totally deserted.
It is tough times, everybody is in debt, and everybody lives on credit.

Suddenly, a rich tourist comes to town.

He enters the only hotel, lays a 100 Euro note on the reception
counter, and goes to inspect the rooms upstairs in order to
pick one.

The hotel proprietor takes the 100 Euro note and
runs to pay his debt to the butcher.

The Butcher takes the 100 Euro note, and runs to pay
his debt to the pig grower.

The pig grower takes the 100 Euro note, and runs to
pay his debt to the supplier of his feed and fuel.

The supplier of feed and fuel takes the 100 Euro note and runs to pay
his debt to the town's prostitute that in these hard
times, gave her "services" on credit.

The hooker runs to the hotel, and pays off her debt
with the 100 Euro note to the hotel proprietor to pay for the rooms that
she rented when she brought her clients there.

The hotel proprietor then lays the 100 Euro note
back on the counter so that the rich tourist will not suspect

At that moment, the rich tourist comes down after
inspecting the rooms, and takes his 100 Euro note, after saying that he
did not like any of the rooms, and leaves town.

No one earned anything. However, the whole town is
now without debt, and looks to the future with a lot of optimism..

And that, ladies and gentlemen, is how our Governments are doing
business today.


Lance said...

Very thought provoking post Baron! So, just printing more money isn't the solution????

Anonymous said...

Problem being here we are bailing out everyone and everything and leaving a debt ridden society for our children to have to figure out how to get us out of this mess. But our current administration thinks that's okay I suppose because they just keep doing more and more of it. Sad thing is the people that elected him don't see it that way and I'm just going to sit back and watch with a shit eating grin on my face when were are taxed unmercifully to get us out of this

Baron's Life said... would I

Baron's Life said...

Thom, same thing over here, up North, we got the same problems...I think we're getting deeper and deeper into shit

Danny said...

Flow of cash is what our economies depend on. Do anything to interrupt that flow and things fall apart. Creating imaginary flow will only make things worse as more and more realize what is going on.

Voegtli said...

Yes, that is exactly the system. And Goverments are freat at it. It is just us who are fooled.

PS. The answer to your comment on my IDP post: The General does not have to worry about giving them food. We are providing the food. 4'500 tons every month.

Baron's Life said...

Did you see how that $100 euro bill solved everbody's problem and it didn't even belong to flow is what it's all about...ur so right

Baron's Life said...

Peter I was waitibg for your opinion as I thought you being an accountant by career would know and also would tell us if this was or wasn't the case...

Thanks for the clarification on the General...It's so sad to see some many lives devasted and in the end I have to ask...for what?
It's all corruption caused

Dave said...

Ahh... but you forget the wonders of inflation (waiting down the road)inflation will reduce the value of the debt thereby shrinking it, in WW1 the UK government borrowed a Billion Pounds, an incredible sum of money back then, today that Billion is only a minor building project or 50km of new highway, sometimes (not always)a little inflation is good for you lol...



George said...

Thanks for the great illustration of how governments work. Doesn't make a lot of sense, does it?

Baron's Life said...

Dave, you're very correct...and if we take current inflation into account, we will soon have to carry a little suitcase full of money to the corner store to buy a chocolate bar.
Cheers mate

Baron's Life said...

George, no it doesn't make a lot of sense but that's how cash flow our system, all you need is for a segment of the population to stop spending and all hell breaks lose because there's no money circulating to pay the bills.

Nikos said...

Do the Greeks come into this somehow? They were very prominent on the Black sea coast in past times...

Baron's Life said...

Nikos, absolutely yes