Financial Cycle

Doesn’t this sounds like a familiar environment today?……..

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 choose 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 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 Government is doing business today.

Wow, this sounds simple enough!!

Basically, it just means that when recession hits, one should not stop spending, in fact, everyone should be spending, spending, spending in order to allow the cash to flow.

No one should be guilty of putting the brakes on this “cash flow” machinery………