Temporary money for a bailout

Here’s n interesting little story about money.

A tourist in a small depressed Irish town leaves a hundred pound note with the hotel keeper while he inspects the rooms.

While the inspection is happening the money is used to by a series of business people to pay off their debts to each other and lands back with the innkeeper just as the tourist returns to collect his money and leave..

The story ends with these lines:

“No one produced anything. No one earned anything. However, the whole town is now out of debt and looking forward to a brighter future.

And that, gentle reader, is how a successful bailout works.”

This town was using debt as money which is the case in our own economies.  However, this “bailout” was only able to work because there was no interest charged on any of the debts.  It could be that we would be much better off if we were to create our own money supply without interest charges to make things more complicated.

The people of this town would probably be better off if they were to use playing cards or candies as money or better still adopt a LETS (local exchange trading system).

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