Wall Street Notices Capital Redistribution And The White House
The tale begins on a town nestled alongside the shores of the Gulf of California in Mexico. The town was going through rough times and everyone was in debt and living on credit with a normal 1 visitor a month influx.
Out of the blue, a wealthy tourist arrives into town and makes his way to the only hotel which also has a bar and restaurant and wants to be shown a room. He put $100 bill on the counter and asks if he could have a meal before he inspects the rooms. Seeing the $100 bill, the owner runs off and uses it to pay off his bill at butcher supply.
With a fresh hundred dollar bill in hand, the butcher supply owner hastily pays his debt to the rancher who in turn scrambles to pay $100 for feed costs. The feed and grain guy seeing this fresh money makes his way to the fuel supplier for his machinery and uses the 100 bucks to pay part of his fuel bill.
Compelled to make good on past debts, the fuel dealer takes the $100 bill and pays his debt to his personal prostitute. Because of hard times she gave out her services on credit and she now pays her debt to the hotel for past rooms rented for her clients.
Seeing the $100 bill back in his hands, the hotel owner lays the bill back it its original location. The wealthy tourist finishes his meal and feels refreshed and decides on foregoing the room inspections and stay at the hotel. He returns to the front desk, pays for his meal with pocket change and takes back the $100 bill and leaves to continue his journey.
As the story unfolds, so far, no one earned anything. However, the whole town is now with less debt, and looks to the future with a little more optimism. That is similar to how the United States Government is doing business today shifting liabilities from one balance sheet to another.
Now the wealthy tourist was impressed by his meal and had nice things to say about the town and it became a news story. Soon after, 8 new tourists make their way to the town hotel. The owner overcome by the bonanza of new customers wants to raise his room charges and menu prices. The butcher, rancher and feed and fuel suppliers are in the throes of raising their prices. And the prostitute needed to raise her prices in order to cover the increased room rates.
The moral of the story is that as long as everyone is proactive paying off debts, money circulates. Bailouts haven't done anything other than pay off some liabilities transferring them from one balance sheet to another. However, when real positive news emerges and "green shoots" optimism takes hold, floods of new purchases will surge and off we go to the races. Will the dollar oversupply be too much? In order to be ahead of the crowd, get your Wall Street Journal subscription today. - 23311
Out of the blue, a wealthy tourist arrives into town and makes his way to the only hotel which also has a bar and restaurant and wants to be shown a room. He put $100 bill on the counter and asks if he could have a meal before he inspects the rooms. Seeing the $100 bill, the owner runs off and uses it to pay off his bill at butcher supply.
With a fresh hundred dollar bill in hand, the butcher supply owner hastily pays his debt to the rancher who in turn scrambles to pay $100 for feed costs. The feed and grain guy seeing this fresh money makes his way to the fuel supplier for his machinery and uses the 100 bucks to pay part of his fuel bill.
Compelled to make good on past debts, the fuel dealer takes the $100 bill and pays his debt to his personal prostitute. Because of hard times she gave out her services on credit and she now pays her debt to the hotel for past rooms rented for her clients.
Seeing the $100 bill back in his hands, the hotel owner lays the bill back it its original location. The wealthy tourist finishes his meal and feels refreshed and decides on foregoing the room inspections and stay at the hotel. He returns to the front desk, pays for his meal with pocket change and takes back the $100 bill and leaves to continue his journey.
As the story unfolds, so far, no one earned anything. However, the whole town is now with less debt, and looks to the future with a little more optimism. That is similar to how the United States Government is doing business today shifting liabilities from one balance sheet to another.
Now the wealthy tourist was impressed by his meal and had nice things to say about the town and it became a news story. Soon after, 8 new tourists make their way to the town hotel. The owner overcome by the bonanza of new customers wants to raise his room charges and menu prices. The butcher, rancher and feed and fuel suppliers are in the throes of raising their prices. And the prostitute needed to raise her prices in order to cover the increased room rates.
The moral of the story is that as long as everyone is proactive paying off debts, money circulates. Bailouts haven't done anything other than pay off some liabilities transferring them from one balance sheet to another. However, when real positive news emerges and "green shoots" optimism takes hold, floods of new purchases will surge and off we go to the races. Will the dollar oversupply be too much? In order to be ahead of the crowd, get your Wall Street Journal subscription today. - 23311
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posted by Mr. Forex at
3:58 AM
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