It is August. 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 Euro100 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 hurry and rushes to his meat supplier to whom he owes E100.
The butcher takes the money and races to his wholesale supplier to pay his debt.
The wholesaler rushes to the farmer to pay E100 for pigs he purchased some time ago.
The farmer triumphantly gives the E100 note to a local prostitute who gave him her services on credit.
The prostitute goes quickly to the hotel, as she owed 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 E100 back and departs.
There was no profit or income. But everyone no longer has any debt and the small town people look optimistically towards their future.
COULD THIS BE THE SOLUTION TO THE Global Financial Crisis?
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2 comments:
Your posts are interesting. I write on the BJP at:
http://india15august.blogspot.com/
Have a look if you have the time.
Another blog I write every day is: www.sudarshanonline.com, where I talk about my professional activities - the stock market.
Cheers!
Several flaws in arguments -
1. Rich Russian Tourist (is as close to an alien that I can think of)
2. Russia still uses Ruble
3. French promptly returning E100.
4. The solution you have proposed is essentially what most of the Governments and central bankers around the world are 'hoping'. The problem is the first guy hoards those 100 instead of paying his debt promptly 'cos he just doesn't owe to the butcher but the laundry guy, the real estate mortgage (on which he's taken an Equity Loan) and so on..... Got the drift.
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