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, 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 the Western world is doing business today.
And if that doesn't scare the hell out of you then you are brain dead!
Mark, do you actually believe this is a problem? That's the way the economy works, and with money lending it becomes even more powerful.
www.seabreeze.com.au/forums/topic.asp?TOPIC_ID=51066
It's only scary when the economy doesn't work like this.
Joe has food, Bill has a shovel. Once apon a time when Joe need a shovel, he swapped some food for the shovel. One day a travelling group came along with neither food or shovels; they wanted both, but had nothing of value to swap. To solve this problem, the group used 'magic' to turn a blank piece of paper into something of value. They invented a credit note! With this credit note, the group took all the food and shovels from Joe and Bill.
Joe and Bill then found they needed seed to grow food, and iron to make new shovels. In the absence of food and shovels, they passed the 'magic' credit note to the neighbourning town trader who supplied seed and iron. The town trader then needed timber from the forest and stone from the quarry. The trader had no seed or iron, which would have been of value, instead he had a 'magic' credit note. One credit note would not pay two seperate suppliers, so the trader, being a bit clever, created a second 'magic' credit note.
Jump forward several centuries and a big corporation in New York realises they have billions of 'magic' credit notes that are not really magic at all. Wallah, a global financial crisis is born. All because a group of cunning travellers wanted things but had no means of bartering for.
Oh for the simple days when you had what you could pay for and you made things when you wanted something more.
Still on topic:
The Great American Bubble Machine
Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depressionhttp://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine
I also think this will be extremely relevant over the next 20 years. Hope I'm wrong because it leaves less room for conventional warfare.
exiledonline.com/the-war-nerd-this-is-how-the-carriers-will-die/
(love this guy btw)
The link below provides an interesting take on the history of money, this video baked my noodle the first time iviewed it. This video comes in 22 parts on you tube.
Frankly the interviewers style /presentation is painful, you feel like grabbing his pen and placing it where the sun don't shine. Neverthless a very intersting overview of how we got to where we are today.
Plow on thru the first 10- 15 minutes as the video really gets intesting once they get to the part about the establishment of the Bank of England.
Its an old video but history is a great teacher.
