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The Financial Meltdown for Dummies

Once upon a time a business man goes to a distant village and offers the villagers to buy their donkeys for $10 each, so some sell their donkeys to him. Then he raises the price to $15 per donkey, and more villagers sell their donkeys. The businessman then offers $30 per donkey, so all remaining villagers sell their donkeys. At this point the businessman knowing that no more donkeys are left, he offer $50 per donkey and leaves for a weekend break.

During the weekend his assistant goes to same villagers and offers to sell them donkeys for $40 each (their donkeys). The villagers borrow money from the local bank, which offers all its fund to support them buy these donkeys and get ready for the businessman return to sell it at $50 each, but the businessman never comes back.

So the villagers end up in debt, broken bank and a lot of donkeys!

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