[tizaala]

This is how it works...

The rescue programme for the EU

It is a gloomy day in Rhodos. It is raining and all the streets are empty. The times are bad, everybody is in debt and only survives by borrowing more money.

The same day a rich German travels through Rhodos and stops at a small hotel. He tells the owner that he wants to have a look at all the rooms in order to make his mind up whether he wants to stay for the night. He gives the hotelier a deposit of 100 Euro.

1. The owner of the hotel hands him the keys to all the rooms .

2. As soon as the German left the lobby, the hotelier takes the money, visits his neighbour - a butcher- and pays his debts.

3. The butcher takes the €100 hurries down the road and pays the farmer.

4. The farmer takes the €100 and pays his debts to the farming association.

5. The cashier takes the money and goes next door to the pub in order to pay his debts.

6. The pub owner gives the money to a prostitute, who he owes money to.

7. The prostitute runs back to the hotel and pays for the room she had hired there a couple of times.

8. The hotelier puts the money back on the desk.

At this moment the German comes back into the lobby, says that he did not like any of the rooms, takes the 100 Euro and leaves.
Nobody produces anything. Nobody earns anything.

Everybody got rid of their debts and is really optimistic about the future.

Well, now you know for sure - that's how the EU rescue programme works - quite simple, isn't it?

[Rosemary]

 

[faith0504]

 

[pikilily]

So good i have read it twice and then borrowed it to send to OH.
Emma T

[Hatty]

knicked it and put it on FB 

[waterhouse]

No I'm afraid that's how trade is supposed to be financed rather than how it has actually been happening.  As an aside it's also the basic mechanism for the multiplication of money inside the banking system.  In other words, it's the answer to where all that money came from.

If you want to understand how the Greeks got themselves into this mess start off with this splendid piece of highly readable financial journalism http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010

Think of Ireland and Greece as your neighbour who has borrowed too much from Billy Barclaycard.  He goes to Billy and admits he can't repay so Billy says "fine, I'll lend you some more money, but you're a worse credit risk so the interest rate is doubled".  By increasing the cost and increasing the loan the debt goes from being a problem to becoming a crisis.  So the neighbour goes to Angela Merkel who says "we will lend you yet more money that you you can't afford to repay but we will punish you as well".  So all his friends and neighbours get to hear about it and he loses his job so what he couldn't afford last week is now stupidly far out of reach.  Then it turns out that Wlhelm Barclaycard has lots of other problem customers and he really needs the money back.

The just published European Bank stress tests excluded any country default from the tests.  But there are several countries that can't afford their debts so they have to default and/or depreciate.

Watching the gold price you might consider the key investment products - cash, canned food and cartridges

[yankieGirl]

We too are in a real pickle in the US.  I am thinking about the skills I have that will allow me to barter for things I don't have or can't do.  Living in BFE is going to be much better than living in the cities.

So many of my friends and family are clueless about where this all is heading.  They make fun of me for praying for the best but preparing for the worst.

Waterhouse has the right idea:  cash (maybe, I say skills and things that can be bartered), canned (or dried) food, and cartridges (are your gun restrictions as tightly regulated as your small farming?)

[robert waddell]

even more so yankie girl

[tizaala]

Hi My little colonial friend. Gun restrictions only apply to the general populus , if your a 12 year old drug dealing inner city kid in Manchester, Glasgow or Liverpool , you can have your state issued sidearm to discourage further free enterprize amongst your friends and neighbours, this way the dealers are self-regulating and this saves the police force hundreds of manhours in paperwork. Especially important when the Crown Prosecution Service usually let them go free on technicalities.

[Crofter]

Tizaala, so skeptical.........and so true!

Dave

[bazzais]

Guns are never a problem - its the person on the other end that is.

In the story its obviously hotelier that gets ripped off, although I doubt he puts the income from a prostitute in his books - at least he wont pay tax on the money he never really had. But he will essentially have to payback the money as well as giving it too the butcher earlier.

Baz

[bazzais]

perpetual motion has not been invented yet - either in the financial world of the physical world.

[waterhouse]

Surely house prices always go up?  Well, that was the story I heard...

Gun regulation here is confusing.  Handguns are basically illegal as are any automatic weapons, rifles are very heavily regulated (as are ammunition purchases) but shotguns are fairly lightly controlled.  Restrictions on air weapons are tighter than on shotguns, oddly.  On the other hand silencers both for rifles and shotguns are completely legal.  Pepper sprays are classed as firearms

Unsurprisingly shotgun ownership is rising. 

Cash, canned food and cartridges was a saying I got from an American friend.  It's survivalist shorthand for a means for exchanging value, food or the means to produce it, and the means to protect the first two.  Gold currently seems hot favourite now that the mighty US dollar is going down the pan.  Smallholders are generally well placed in a financial meltdown because they have a diversity of food sources which the prairie farmer lacks.

[bazzais]

Landowners have always been viewed as rich - its why the government gives grants to us to keep our great landscapes upto spec and farm-able - its just incase there is another war and the country has to fall back on it for a means of production.  Its the EU vs the World - we are all a part of the next constructed great state. (if you have enough land that is)

The means of production must be kept away from the worker - its an unspoken rule.

Baz

[yankieGirl]

I have pigs for eating and 2 for breeding.  Chickens for eggs.  A cow to eat next fall.  Two girl goats with a buck coming on Monday (milk eventually).  A garden.  Moonshine to trade for toilet paper and feminine hygiene products. 

Life will still be good even if the economy tanks!

I love my little piece of paradise!!!!!!!!!!!!!!!