Friday, May 15, 2009

Solution to the global financial crisis

I had an interesting note pass by my desk this morning that I thought I'd share here. Stange as this sounds, it close to how our economy works!

It is August. In a very small town in the Okanagan Valley holiday season should be in full swing, but it is raining so there is not too much business happening. Everyone depends on the tourists. But there are none so all are heavily in debt.

Unexpectedly, a rich American tourist arrives in the foyer of the small local hotel. He asks for a room and puts a US$100 note 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 banknote and rushes to his meat supplier to whom he owes US$100.

The butcher takes the money and races to his supplier to pay his U$100 debt.

The wholesaler rushes to the farmer to pay US$100 for pigs he purchased some time ago.

The farmer triumphantly gives the US$100 note to a local prostitute who gave him her services on credit.

The prostitute goes quickly to the hotel, and pays the US$100 for her hourly room used to entertain clients.

At that moment, the rich American comes down to reception and informs the hotel owner that the proposed room is unsatisfactory and takes his US$100 note back and departs.

There was no profit or income. But everyone no longer has any debt and the small town's people look optimistically towards their future.

Using this same process could be the basis for the solution of the Global Financial Crisis.


No comments:

NBI - Making sense of business improvement - Blogged