In a small town on the South Coast of France, holiday season is in full swing, but it is raining so there is not too much business happening. Everyone is heavily in debt.
Luckily, a rich Russian tourist arrives in the foyer of the small local hotel. He asks for a room and puts a Euro 100 note on the reception counter, takes a key and goes to inspect the room located up the stairs on the third floor.
The hotel owner takes the banknote in a hurry and rushes to his meat supplier to whom he owes Euro 100. The butcher takes the money and races to his supplier to pay his debt. The wholesaler rushes to the farmer to pay Euro 100 for pigs he purchased some time ago.
The farmer triumphantly gives the Euro 100 note to a local prostitute who gave him her services on credit. The prostitute goes quickly to the hotel, as she was owing the hotel for her hourly room use to entertain clients.
At that moment, the rich Russian is coming down to reception and informs the hotel owner that the proposed room is unsatisfactory and takes his Euro 100 back and departs.
There was no profit or income. But everyone no longer has any debt and the small townspeople look optimistically towards their future.
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The above analysis may help solve the current financial crisis which is largely triggered by "phantom" money.
Tags: Rich Russian, Euro Dollar, Prostitute, Phantom Money
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4 comments:
@_@ geng... It circulates back again...
kay - actually money didn't change hands at all haha
This is dumb - the hotel owner has absorbed the debt. All is square but the hotelier is out as he has repaid the "circle" but nothing to show. Formarly he had whores debt but now has zero.
Think about it - all debts paid but hotelier has zero forward, so it was hotelier absorbing the debt.
Anonymous misses the point. Each person in the circle has neither gained, nor lost in their "wealth".
The E100 note could be injected at any point with the same results. Each person is paid off- and then settles a debt. Except the hotelier. He "borrows" money first, pays his debt and is paid off later. He then "returns" the borrowed E100 to the Russian.
No wealth is generated. Accounts ARE settled. Big deal.
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