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Author Topic: Quantitative Easing Explained - How the Economy Works.....  (Read 654 times)

Offline Clive

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    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 United States , United
 
    Kingdom &Australian Governments are doing business today.


 

Offline Rik

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Re: Quantitative Easing Explained - How the Economy Works.....
« Reply #1 on: February 05, 2010, 18:55 »
Smoke and mirrors, eh, or BBB. ;)
Slainthe!

Rik

Offline Simon

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Re: Quantitative Easing Explained - How the Economy Works.....
« Reply #2 on: February 05, 2010, 21:01 »
:clever2:
Many thanks to all our members, who have made PC Pals such an outstanding success!   :thumb:

Offline Clive

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Re: Quantitative Easing Explained - How the Economy Works.....
« Reply #3 on: February 05, 2010, 23:06 »
It certainly broadened my understanding of economics.   ;D


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