How Money Works

by on Jul.31, 2011, under Finance

It is a slow day in the small Montana town of Creditville, and the streets are deserted. Times are
tough. Everybody is in debt and living on credit. A tourist visiting the area drives through town, stops at
the motel, and drops a $100 bill on the desk and says he wants to inspect the rooms upstairs to pick one
for the night. as soon as he walks upstairs the motel 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 pay his debt to the pig farmer. The pig farmer takes the $100 and head off down the street to pay his supplier, the co-op. the manager of the co -op takes the $100 and runs to pay his what he owes to the local janitor who rooms at the motel. Times are hard and the janitor owes the motel owner back rent. The janitor drops everything, runs to the motel to pay off the motel owner.

The motel owner then places the $100 back on the counter so the traveler will not suspect anything.
At that moment the tourist comes back down the stairs, says the rooms are unsatisfactory, picks up his
$100, and leaves.

No one produced anything. No one earned anything. No wealth was created.

However, the whole town is now out of debt and looks to the future with a lot more optimism.

Welcome to America in the 3rd Millennium. We’re a circle of back-scratchers. Our only net export is War. It isn’t profitable.

Here is a little money history . . .

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