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05-24-2010, 09:22 PM
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Location: Planet Eaarth
8,954 posts, read 19,905,298 times
Reputation: 7193
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The best explanation I've heard yet. 
(Note: this is an un-copyrighted e-mail)
It's a slow day in some little town.
The sun is hot....the streets are deserted.
Times are tough, everybody is in debt, and
everybody lives on credit.
On this particular day a rich tourist from back west is driving thru town.
He stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.
As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay
his bill at the feed store.
The guy at the Farmer's Co-op takes the $100 and
runs to pay his debt to the local prostitute, who has
also been facing hard times and has had to offer her services on credit.
She, in a flash rushes to the motel and pays off her
room bill with the motel owner.
The motel proprietor now places the $100 back on the counter so the rich traveler will not suspect anything.
At that moment the the traveler comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money & leaves.
NOW, no one produced anything...and no one earned anything...however the whole town is out of debt and is looking to the future with much optimism.
And that, ladies and gentlemen is precisely how
the U.S. and Canadian Governments are
conducting business today! |
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05-24-2010, 11:21 PM
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Location: Nebraska
188 posts, read 257,407 times
Reputation: 286
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Quote:
Originally Posted by Tightwad
The best explanation I've heard yet.
(Note: this is an un-copyrighted e-mail)
It's a slow day in some little town.
The sun is hot....the streets are deserted.
Times are tough, everybody is in debt, and
everybody lives on credit.
On this particular day a rich tourist from back west is driving thru town.
He stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.
As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay
his bill at the feed store.
The guy at the Farmer's Co-op takes the $100 and
runs to pay his debt to the local prostitute, who has
also been facing hard times and has had to offer her services on credit.
She, in a flash rushes to the motel and pays off her
room bill with the motel owner.
The motel proprietor now places the $100 back on the counter so the rich traveler will not suspect anything.
At that moment the the traveler comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money & leaves.
NOW, no one produced anything...and no one earned anything...however the whole town is out of debt and is looking to the future with much optimism.
And that, ladies and gentlemen is precisely how
the U.S. and Canadian Governments are
conducting business today! |
Great post. An economy isn't growing unless we are producing something of substance and people are buying with cash (or we export goods that brings money into our country). This idea that GDP increasing (aka spending) results in growth, is completely false.
Another great book on economics, "How An Economy Grows And Why It Crashes," by Peter Schiff. Finished it in one sitting, great book. |
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05-25-2010, 09:23 AM
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20,376 posts, read 18,414,397 times
Reputation: 8024
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Quote:
Originally Posted by Tightwad
The best explanation I've heard yet.
(Note: this is an un-copyrighted e-mail)
It's a slow day in some little town.
The sun is hot....the streets are deserted.
Times are tough, everybody is in debt, and
everybody lives on credit.
On this particular day a rich tourist from back west is driving thru town.
He stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.
As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay
his bill at the feed store.
The guy at the Farmer's Co-op takes the $100 and
runs to pay his debt to the local prostitute, who has
also been facing hard times and has had to offer her services on credit.
She, in a flash rushes to the motel and pays off her
room bill with the motel owner.
The motel proprietor now places the $100 back on the counter so the rich traveler will not suspect anything.
At that moment the the traveler comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money & leaves.
NOW, no one produced anything...and no one earned anything...however the whole town is out of debt and is looking to the future with much optimism.
And that, ladies and gentlemen is precisely how
the U.S. and Canadian Governments are
conducting business today! |
Hi Tightwad,
That is a page right of of Silvio Gesell. Its also what happens in large trading blocks with single currencies. For example, Ireland may have local productive potential, but starved of a local currency, they can do nothing. What is worse is the only way to get them is through an international cash cow or cash crop which can dominate the local economy. The community becomes colony of the money system. |
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05-25-2010, 11:18 AM
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Location: Planet Eaarth
8,954 posts, read 19,905,298 times
Reputation: 7193
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Quote:
Originally Posted by gwynedd1
Hi Tightwad,
That is a page right of of Silvio Gesell.
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It is!?!  I got it as an email from my wife. 
Can you provide a link please? |
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05-25-2010, 03:39 PM
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Location: Portland, Oregon
7,084 posts, read 11,654,422 times
Reputation: 4125
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Wow, that must be the absolutely worst explanation of anything dealing with economics I have ever read.
Besides the fact that just because no one produced a good or service at the time the money changed hands is irrelevant.
It's like saying I bought a chair (or haircut) and put in on a credit card. Then, when I pay the credit card off I have not bought any services at the time I paid it off...so nothing was ever produced or earned in the first place. It's psychotic to believe that time sifting the payments from the good/service means nothing was produced.
The equation nets to 0; but it would be the same production of goods/services if the guy reserved the room at the start. Everyone then used the money instantly instead of offsetting it on credit, and he cancelled the reservation to get his money back.
It's the fundamental difference between cash, A/R, and A/P.
Last edited by subsound; 05-25-2010 at 04:29 PM..
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05-25-2010, 08:39 PM
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630 posts, read 1,813,076 times
Reputation: 360
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Goods (grain,wholesale pork,retail cold cuts) were produced,services (living accomodations,horizontal refreshments) were provided.Perfect illustrations of the velocity of money.Milton Freidman would be proud.
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05-25-2010, 09:41 PM
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Location: Planet Eaarth
8,954 posts, read 19,905,298 times
Reputation: 7193
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05-26-2010, 02:17 AM
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Location: Sandpoint, Idaho
3,006 posts, read 6,006,328 times
Reputation: 3309
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Quote:
Originally Posted by Tightwad
The best explanation I've heard yet.
(Note: this is an un-copyrighted e-mail)
It's a slow day in some little town.
The sun is hot....the streets are deserted.
Times are tough, everybody is in debt, and
everybody lives on credit.
On this particular day a rich tourist from back west is driving thru town.
He stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.
As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay
his bill at the feed store.
The guy at the Farmer's Co-op takes the $100 and
runs to pay his debt to the local prostitute, who has
also been facing hard times and has had to offer her services on credit.
She, in a flash rushes to the motel and pays off her
room bill with the motel owner.
The motel proprietor now places the $100 back on the counter so the rich traveler will not suspect anything.
At that moment the the traveler comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money & leaves.
NOW, no one produced anything...and no one earned anything...however the whole town is out of debt and is looking to the future with much optimism.
And that, ladies and gentlemen is precisely how
the U.S. and Canadian Governments are
conducting business today! |
All except the motel proprietor who is out the $100 from the local prostitute. |
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05-26-2010, 03:05 PM
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20,376 posts, read 18,414,397 times
Reputation: 8024
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Quote:
Originally Posted by Tightwad
It is!?! I got it as an email from my wife.
Can you provide a link please? |
Hi Tightwad,
Sure. Creating a local temporary currency was commenced here according to Silvio Gesell's stamp script. Its essentially a local currency that penalizes hoarding.
That temporary $100 bill served as a temporary local currency.
Laboratory readings: Wörgl's Stamp Scrip – The Threat of a Good Example? |
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05-27-2010, 08:27 AM
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Location: USA
714 posts, read 1,097,170 times
Reputation: 684
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Aside from money supply and speed & frequency of circulation, TRUST in the currency as an acceptable form of payment for goods/services is of utmost importance.
If one of the people in that chain decided: "The dollar is not acceptable as payment for my goods/services. I need gold or food or soda as payment" .... then maybe this dynamic economy grinds to a halt.
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