Bailing out the Irish - Simple

t0mm13b

It is a slow day in a damp little Irish town. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt and everybody lives on credit. On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the pub. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich German will not suspect anything. At that moment the German comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money and leaves town. No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism. And that, ladies and gentlemen, is how the bailout package works.

eeloe

So what, it's all sunshine and lollypops from here on in?

t0mm13b

eeloe wrote: »

So what, it's all sunshine and lollypops from here on in?

I posted that in jest, ah shure to be shure to be shure....

You are forgetting the interest being charged.

It reminds me of an accounting joke:

Two accountants are in a bank, when armed robbers burst in. While several of the robbers take the money from the tellers, others line the customers, including the accountants, up against a wall, and proceed to take their wallets, watches, etc. While this is going on accountant number one jams something in accountant number two's hand. Without looking down, accountant number two whispers, "What is this?" to which accountant number one replies, "it's that $50 I owe you."

Scofflaw

It's actually a good description of how "money of account" works in settling debts, but it doesn't have anything much to do with the bailout!

No one produced anything. No one earned anything.

In fact, everything had already been produced or earned, but the local economy was running on local promissory notes as a currency. The €100 note is "money of account" - that is, money you can settle a bill with.

This, by the way, how the economy of medieval trade fairs operated. Merchants traded with each other using promissory notes for the amounts involved, and all those promissory notes were settled when the merchants met at a trade fair. Since most business was bilateral, with money owed each way, only a few hundred écu - the difference - might change hands for bills of tens of thousands each way.

cordially,
Scofflaw

FreeEducation

so what you are saying is that we need more rich Germans with their pockets stuffed with gold and cash?

(it would help if the hotel room had been up to scratch then the hotel owner would have been doubly paid..)

Leiva

FreeEducation wrote: »

(it would help if our hotel roomFinancial Regulator had been up to scratch then the hotel ownerBanks would have been doubly paid..)

FYP

zig

I think the ending is wrong , its more like the hooker goes and blows all that 100 on coke and heroin (houses) and says to the hotel owner 'sorry im broke'. The German comes back downstairs looking for his money and the hotel owner rings the butcher saying 'any chance I could get that 100 back?' and so the whole problem unfolds.

The bailout is the German guy giving the hotel owner even more money in the hope that he can do something with it to get his original 100 back. Only time will tell if he can.

sceptre

Scofflaw wrote: »

It's actually a good description of how "money of account" works in settling debts, but it doesn't have anything much to do with the bailout!

Indeed not. Also, it's one of those old email forward things, just with the currency conveniently changed. People sure seem to like forwarding emails to each other.

Japer

zig wrote: »

The bailout is the German guy giving the hotel owner even more money in the hope that he can do something with it to get his original 100 back.

No, the bailout is the German guy giving the 100 euro to the government. The 100 euro ends up fairly quickly in the pocket of someone driving to Newry for his shopping, in his german made car. It goes out of the Irish tax system and the german is owed back his money plus interest.

Leiva

...CONTD .


Our German friend walks down the road with his €100 and finds a brand new beautifully built Hotel , walks up to front door and looks in .
There he sees marble floors , beautiful architecture and all the modern bells and whistles ..but there seems to be no one there ? , and the door is locked ?
He stops a person walking by and asks..
" Vhy is this beautiful Hotel closed?"
"Its NAMA'd mate" comes the reply .
"NAMA'd ? " he asks himself confused .

Later that day the German finds out all about this NAMA thing , and with his €100 buys the Hotel out right from a very nice man named Graham Emmett.

"I really love Ireland" says the German to himself .

dvpower

Does anyone in that town pay their taxes?:mad:

Leiva

dvpower wrote: »

Does anyone in that town pay their taxes?:mad:

ednwireland

isnt the hotel owner a 100 euro down or am i mising something ?

BornToKill

zig wrote: »

I think the ending is wrong , its more like the hooker goes and blows all that 100 on coke and heroin (houses) and says to the hotel owner 'sorry im broke'. The German comes back downstairs looking for his money and the hotel owner rings the butcher saying 'any chance I could get that 100 back?'

Wait, the butcher is also a drug dealer?

Cookie_Monster

ednwireland wrote: »

isnt the hotel owner a 100 euro down or am i mising something ?

yep hotel owner loses out, maybe the above story is why we're in so much trouble no-one can see the obvious when it comes to money over here :P

Dob74

t0mm13b wrote: »

It is a slow day in a damp little Irish town. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt and everybody lives on credit. On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the pub. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich German will not suspect anything. At that moment the German comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money and leaves town. No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism. And that, ladies and gentlemen, is how the bailout package works.

No it's more like Tony Sopranos lends you money to bet on the property market.
You lose most of your money and now you have an interest payment so you take your son's car and give it to him to keep him off your back.
Next interest payment is due so you let him into your business and he to run things is way.
Finally he takes everything off you and you move to Arzonia.

Absurdum

Whoever breaks into the German's car and steals his stereo when he's wasting our time in the hotel is the only winner here from what I can see.

Moral of the story: old fashioned crime still pays?

lmaopml

Em....

Analogy overload! Hotel rooms? The 'German' etc. was he wearing a swastika too? Oh my Gawd..*blesses self*

Moral of the story...




......Germans bad...! Who'd have thunk the Germans could be labelled as 'bad' so easily by feckless spenders, who sail off into the default sunset, and don't recognise a helping hand that isn't 'free' of charge....*Amazed*

f*ck that for a hotel room..and the giverupers..I'm sad Irish people these days are so suspect soft and giveuperish at the first hurdle - Yay us!

Scofflaw

isnt the hotel owner a 100 euro down or am i mising something ?

I think you're missing something. The hotel owner has lost no money - he didn't have €100 to start with, and he didn't have it at the end. Nor did he even pay an 'opportunity cost', since he seized his opportunity and legged it swiftly out the door. If, of course, the chain of transactions hadn't led back to him, what he would actually have been doing is stealing...

If you really wanted the original blurb to be about the bailout, you'd have to adapt it pretty heavily. Something like this, maybe:

Same town as before - a little bit of money goes around, but not much. German tourist comes into hotel. Leaves the €100 on the counter, goes upstairs. The hotel owner legs it out the door, goes into the butcher to buy the week's meat. The butcher sees the €100 note, and says "look, that'll cost €100, and I'll give you two weeks". The hotel owner says "but that's much more than you usually charge!" and the butcher says to take it or leave it, because the hotel owner looks like he's in a hurry to spend the money. So the hotel owner pays over the €100. The butcher now nips down the road to buy a pig. The pig farmer charges him the whole €100 as well, which is also much more than he'd usually charge, but heck, it's worth trying, and the butcher is standing there with more money than he knows what to do with. Same thing happens in turn - everybody charges the whole €100 instead of what they'd usually charge, and eventually the note lands back on the hotel owner's desk just in time for the German to pick it up.

Next week, the German drives through the same town, and is flagged down by the locals. He winds down his window, and the hotel owner says "look, Helmut, is there any chance you could lend us €100?". The German says "what? But you all seemed to be doing OK last week - nobody stole my €100 note, which usually happens in poor places." "Yes", says the hotel owner, "but everything's got so expensive since then - I can't afford to buy meat, the butcher can't afford to buy pigs, nobody can afford the hooker any more...".

cordially,
Scofflaw