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The Banking Crisis solved?

  • 14-08-2011 3:31pm
    #1
    Registered Users Posts: 3,647 ✭✭✭


    My dad stumped us all at dinner today...posing the following predicament...i cant work it out!

    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 prostitute that, in these hard times, gave her service 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 anything.

    At that moment, the rich tourist comes down after inspecting the rooms and takes his 100 Euro note, 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 the United States, United Kingdom & Australian Governments are doing business today.


Comments

  • Registered Users Posts: 2,481 ✭✭✭Fremen


    The point is that the net debt of the town as a whole was 0 to begin with.

    If A owes B, who owes C, who owes A, then in fact no-one owes anyone anything. They didn't even need the tourist in the first place, they just needed a means of transferring debt.


  • Registered Users Posts: 3,647 ✭✭✭El Inho


    thank you sir!


  • Closed Accounts Posts: 44,501 ✭✭✭✭Deki


    :p got the same in an e-mail only it was a small town in Texas :pac:


  • Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,044 Mod ✭✭✭✭AlmightyCushion


    In that specific instance it works perfectly, unfortunately the world economy is a little more complex.


  • Registered Users Posts: 3,410 ✭✭✭old_aussie


    NO, just the hotel proprieter is out 100 as he does NOT have the money for the rent on his rooms.

    That 100 was needed to pay the maid and cleaner to look after and clean he hotel rooms, they still need to be paid.

    You make me laugh with your Irish logic.:rolleyes:

    And, the United States, United Kingdom & Australian Governments currently ar NOT getting handouts/loans from the EU and IMF to bail them out. LOL


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