In a nutshell..

[J9withdogs]

Okay, it's old but still relevant...

 

It is a slow day in a damp little Irish town. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

 

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.

 

The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the pub. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything.

 

At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town. No one

produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.

 

And that, Ladies and Gentlemen, is how the bailout package works.

 

This, incidentally, is how the 'city' works, except the sums are multiplied a million times over and then they pay themselves huge commissions. But where is the actual money? From what did they pay themselves?!

 

 

[nightrider]

J9withdogs - 2010-12-06 1:49 PM

 

Okay, it's old but still relevant...

 

It is a slow day in a damp little Irish town. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

 

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.

 

The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the pub. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything.

 

At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town. No one

produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.

 

And that, Ladies and Gentlemen, is how the bailout package works.

 

This, incidentally, is how the 'city' works, except the sums are multiplied a million times over and then they pay themselves huge commissions. But where is the actual money? From what did they pay themselves?!

 

The picture that you painted is ever so true, a pub that I used to frequent years ago had a load of tap room customers all on the dole, they had no reason to work because when ever one of them got their giro they would lend a certain amount to the other lads, when each of them got their giro's they paid back what they had borrowed last week, it was a never ending cycle, no one was ever without a drink or a smoke, rather clever really?

[nightrider]

At the end of the day money as we know it is only paper, but paper with a difference, you can buy things with it.

So basically people are working in order to put paper in the bank.

[Brian Kirby]

I like it Janine, I like it!  :-D  And I said that without repeating your entire post as well - nudge!  ;-)

[Brian Kirby]

Oh yes, and I forgot to say: the hotelier loses, because he took the note back to pay for rooms rented by the hooker, and the German then reclaimed the note.

Soo, hotelier €100 down.  But that's Irish economics for you!  :-D

[Guest pelmetman]

Now you know why I semi retired, because muppets like me were picking up the tab >:-)

[Guest peter]

You got some high priced Hookers in Alford then Pelmet?. :D

[Brian Kirby]

You a big spender, then Peter?  :-D

[Guest pelmetman]

peter - 2010-12-06 10:39 PM

 

You got some high priced Hookers in Alford then Pelmet?. :D

 

They wont pay my prices up here :D

 

I have to go South to sell my services (lol)

[Brian Kirby]

pelmetman - 2010-12-07 9:09 AM

peter - 2010-12-06 10:39 PM You got some high priced Hookers in Alford then Pelmet?. :D

They wont pay my prices up here :D I have to go South to sell my services (lol)

Not to Boston, surely?  :-D

[nightrider]

peter - 2010-12-06 10:39 PM

 

You got some high priced Hookers in Alford then Pelmet?. :D

Whats the matter with a short time for 2 quid

[Guest pelmetman]

knight of the road - 2010-12-07 10:50 AM

 

peter - 2010-12-06 10:39 PM

 

You got some high priced Hookers in Alford then Pelmet?. :D

Whats the matter with a short time for 2 quid

 

I charge by the foot :D

[Guest pelmetman]

Brian Kirby - 2010-12-07 10:42 AM

pelmetman - 2010-12-07 9:09 AM

peter - 2010-12-06 10:39 PM You got some high priced Hookers in Alford then Pelmet?. :D

They wont pay my prices up here :D I have to go South to sell my services (lol)

Not to Boston, surely?  :-D

Rich, Famous or Infamous I'm not fussy who I sell my services to :D But Boston 8-) ........even I have standards Brian(lol)

[nightrider]

Hey pelmet,

When you were in the mob did you ever have the pleasure of visiting Malta? If you did, no doubt you sampled the delights of Strait St AKA the "gut".

[Guest pelmetman]

knight of the road - 2010-12-07 12:41 PM

 

Hey pelmet,

When you were in the mob did you ever have the pleasure of visiting Malta? If you did, no doubt you sampled the delights of Strait St AKA the "gut".

 

Yes several times a lovely Island, and the Gut was somewhere we seem'd to end up (lol) usualy the worse for wear :$

 

Mind you for window shopping you can't beat the Reeperbahn in Hamburg 8-) Marks & Spencer looks very tame afterwards (lol)

[nightrider]

Listen up guys, pelmet has admitted to dilly-dallying with the ladies of the night down the Gut on Malta, struth, what is this group coming to?

[Guest pelmetman]

knight of the road - 2010-12-07 3:39 PM

 

Listen up guys, pelmet has admitted to dilly-dallying with the ladies of the night down the Gut on Malta, struth, what is this group coming to?

 

I am as pure as the driven snow :D I looked but did not touch (lol) (lol)

[Guest peter]

Brian Kirby - 2010-12-06 11:47 PM

 

You a big spender, then Peter?  :-D

No, but my wife is. :D

[Guest peter]

pelmetman - 2010-12-07 5:02 PM

 

knight of the road - 2010-12-07 3:39 PM

 

Listen up guys, pelmet has admitted to dilly-dallying with the ladies of the night down the Gut on Malta, struth, what is this group coming to?

 

I am as pure as the driven snow :D I looked but did not touch (lol) (lol)

Except maybe yourself when you got back to your billet. :D

[CliveH]

Hi J9 - I have seen this before and whilst I have no desire to “burst anyone’s bubble” here – I have to point out that there is a huge flaw in the math. If we use £’s and UK tax rules for next year (it works just as well in other countries but tax rates differ. (Upper case used for emphasis only)

 

..........................................

 

So - on this particular day a rich German tourist is driving through a UK town, stops at the local hotel and lays a £100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

 

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the £100 note and runs next door to pay his debt to the butcher (THIS IS THE FIRST ACTUAL FINANCIAL TRANSACTION). The butcher takes the £100 note) and runs down the street to repay his debt to the pig farmer (THIS IS THE SECOND FINANCIAL TRANSACTION).

 

The pig farmer takes the £100 note and heads off to pay his bill at the supplier of feed and fuel (THIS IS THE THIRD FINANCIAL TRANSACTION). The guy at the Farmers' Co-op takes the £100 note and runs to pay his drinks bill at the pub (THIS IS THE FOURTH FINANCIAL TRANSACTION). The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit (WHILST A FINANCIAL TRANSACTION – THIS ONE IS PROBABLY NOT ONE THAT IS REGISTERRED BY HMRC). The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the £100 note (THIS IS THE FITH FINANCIAL TRANSACTION. The hotel proprietor then places the £100 note back on the counter so the rich traveller will not suspect anything.

 

At that moment the traveller comes down the stairs, picks up the £100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

 

No one produced anything. No one earned anything. However, the whole town NOW OWES FIVE LOTS OF VAT WHICH COME NEXT YEAR WILL BE CHARGED AT 20%.

 

WHICH MEANS THE TOWN HAS NOTHING BUT THE GOVERNMENT HAS CHARGED THEM £100 IN TAX. AND IF THE PROSTITUTE HAD SUFFICIENT TURNOVER TO BE REGISTERRED FOR VAT, THE TOWN WOULD ACTUALLY OWE HMR&C £20.

 

(AND SOMEWHAT BIZARRELY – IN THIS EXAMPLE – IT IS PROPABLY ONLY THE PROSTITUTE THAT GETS HER CUSTOMERS TO “PRODUCE” ANYTHING!)

 

And that, Ladies and Gentlemen, is how VAT works.

 

[Guest pelmetman]

I've just deregistered for VAT :D I only stayed registered when I semi retired as I supplied the trade and it worked in my favour ;-)

 

Since starting the stool business I now supply direct to the public, I can keep my prices the same in January and actually get to make more profit per stool. win win..........apart from the goverment as they dont get any VAT>:-)

 

Incidentally according to my accountant there are lots of firms splitting them selves into smaller companies if they can B-)

[Tony Jones]

Brian Kirby - 2010-12-06 5:57 PM

Oh yes, and I forgot to say: the hotelier loses, because he took the note back to pay for rooms rented by the hooker, and the German then reclaimed the note.

Soo, hotelier €100 down.  But that's Irish economics for you!  :-D

No Brian, he's not lost out - his butcher's bill is now paid.

[Tony Jones]

pelmetman - 2010-12-09 12:31 PM

 

Since starting the stool business I now supply direct to the public, I can keep my prices the same in January and actually get to make more profit per stool. win win..........

 

I'm a bit surprised you've fouind a market, Dave. Don't most people produce their own "stools" ? :$

[Guest pelmetman]

Tony Jones - 2010-12-09 2:13 Pm

 

I'm a bit surprised you've fouind a market, Dave. Don't most people produce their own "stools" ? :$

 

Are you pooh poohing my stools Tony (lol)