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Guest UK Debt Slave

A Nice Wee Tale

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Guest UK Debt Slave

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's prostitute that in these hard times, gave her "services" 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.

Apparently that, ladies and gentlemen, is how the United States Government is doing business these days

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I like the idea of that story, but surely the townfolk all have net debt of zero: they each have a 100 Euro creditor and a 100 Euro debtor?

They all just move from assets 100 liabilities 100 to assets 0 liabilities 0?

Or am I missing something?

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I like the idea of that story, but surely the townfolk all have net debt of zero: they each have a 100 Euro creditor and a 100 Euro debtor?

They all just move from assets 100 liabilities 100 to assets 0 liabilities 0?

Or am I missing something?

I don't think your missing anything at all.

However having Assets and liabilities at 0 is better than having them at 100 each.

Why? Because what happens if the "asset" doesn't come in? You still owe the 100. Your stuffed.

So actually being at 0 should be better and give you more hope.

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Bin dun already - about 2 wks ago

I will supply a link as sson as someone can teach me how to use the search function.

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Which town was this?

I'd be interested in meeting a hooker who does tricks on credit.

Best comment so far :lol: , on any of the identical threads.

Edit: my profile pic is from a mens hairstyling website btw.

Edited by Tom Peters

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I was sent this a while ago by email, albeit set in France and replied thusly:

54% average tax burden in France, therefore

hotelier pays 54 Euros in tax and shifts 46 euros of debt

butcher pays 25 Euros in Tax and shifts 21 Euros of debt

Wholesaler pays 11 Euros in Tax and shifts 10 Euros of debt

Farmer payers 5.4 Euro of Tax and shifts 4.6 Euros of debt

Whore doesn't like to pay tax so shifts 4.6 Euros of debt

Hotelier has to return 100 Euros having received 4.6 Euros and so is left 95 Euros in debt.

Government takes 95% of the money. Everyone is still in debt.

Seriously though the flaw in the logic is that this only works if you have services that you can provide, where you won't take a loss if they are returned. In this case at the end the hotelier's debt has to increase because he doesn't have cash to pay the maid that got the room ready.

Of course in the Anglo Saxon version:

In a small town on the South Coast of England, 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 two GBP50 notes 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 banknotes in a hurry and deposits them in his bank.

The bank uses the deposit to create 3126 new pounds through the magic of fractional reserve banking with a Reserve Ratio of 3.1% as is typical in the UK

The hotel owner draws a check for GBP100 to pay the butcher.

The butcher deposits the check in his bank and the bank creates a further 3126 pounds. The initial 100 pounds has now expanded to 6452 pounds of which 6352 pounds are credit.

The butcher pays his wholesaler by credit card. The bank expands the M2 money supply further to 9578. M3 money supply including debt expands.

The wholesaler pays his farmer by debit card. The bank expands the M2 money supply further to 12804. M3 constant.

The farmer pays his prostitute by cheque. The bank expands the M2 money supply further to 16030. M3 constant.

The prostitute takes out 100 pounds of cash to pay the hotelier. M1 decreases but M2 & M3 remain constant.

The prostitute decides she wants a little bordello of her own and borrows 16,000 pounds from the understanding bank manager. Before buying her new flat she deposits the loan in the bank, and the bank uses the deposit to expand M2 by a further 517097.3 GBP.

The Russian takes his original 100 GBP back. The hotelier having already spent it is now bankrupt and can't service his heavy mortgage.

The Russian proceeds with a leveraged buyout of the hotel using his original 100 pounds as a deposit and borrowing 517 thousand pounds from the bank.

The bank realises that it has lent out more than 550 thousands pounds but has no deposits to cover it's accounts.

The Russian tries to withdraw 30 pounds to buy some champagne and can't get his money.

A run on the bank occurs driving it into bankruptcy and government bailout.

The house market collapses (again)

The Russian defaults leaving 500k pounds of negative equity.

The government raises taxes by an additional 500k on the hotelier, the butcher, the wholesaler and the farmer to pay for the banks bad assets.

Austerity is back. The government defaults to the IMF. The banks own everything and everything is worth nothing.

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Bin dun already - about 2 wks ago

I will supply a link as sson as someone can teach me how to use the search function.

Naa this story and various permutations of it have been done to death, every few months if I recall. Illustrating the 'velocity of money' was one of 'em.

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It is the month of August, on the shores of the lake tahoe 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 Dollar note on the reception counter, and goes to inspect the rooms upstairs in order to pick one.

The hotel proprietor takes the 100 Dollar note and runs to pay his debt to the IRS.

The IRS takes the 100 Dollar note, and runs to pay his debt to the SWF.

The SWF takes the 100 Dollar note, and runs to pay his debt to the arab supplier of his fuel.

The arab supplier of fuel takes the 100 Dollar note and runs to lend it to the town's prostitute banker that in these hard times, gave his "bonuses" on credit.

The banker runs to the hotel, and pays off her TARP debt with the 100 Dollar note to the hotel proprietor to pay for the CDOs that she defaulted on when she brought her clients there.

The hotel proprietor then lays the 100 Dollar 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 Dollar 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 feeling ******in rich, and looks to the future with a lot of optimism.

Apparently that, ladies and gentlemen, is how the United States Government is greening the shoots these days

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£1 circulating fast enough can settle all the debts in an economy.

Stranger stays at home.... 100 bill was with Madoff......

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