03 Dec 2011 13:39:For those uncertain of how world economics works and affects us all hopefully the following will cheer you up;
The Irish Bailout.........
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 (no offence intended) tourist is driving through the town he stops at the local hotel and lays a !00e note on the desk, telling the hotel owner that he wants to inspect the rooms upstairs in order to pick one ot spend the night.
Thw onwer gives him some room keys and as soon as the visitor has headed for the lift the hotleir grabs the 100e note and runs next door to pay his debt to the butcher, the buthcher takes the 100e note and runs down the street to repay his debt to the pig farmer, the pig farmer takes the 100e note and heads off to pay his bill at the supplier of feed and fuel, the guy at the farmers co-operative takes the 100e 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 , whio has been facing hard times and has had to offer him "services" on credit, the prostitute then rushes ot the hotel and pays of her room bill of 100e, the hotelier then places the 100e note back on the counter, when the potential guest comes back downstairs he states "the rooms are not satisfactory" picks up his 100e note and leaves.
Result: No one produced anything
No one earned any money
However the whole town is now out of debt and full of optimism!!!!!!
In reality it is not far from the truth, Uk has just bailed out Portugal to the tune of £4b however never had £4b spare!
Bank of England have recently produced more actual cash and have givnen it to banks to stimulate the economy however as banks refuse to lend this was a complete waste of time.
As someone who has hjd his own ifs business in the UK for over 23 years -yes in my opinion it is going to get worse before it gets beeter in probably 3-4 years time, rseal rates of inflation are circa 5.3% th eonly way to curb this is to increase interest rates however the Uk is so far on its backside and so many have become very comfortable with paying a pittance tomwards their mortgage each month that if interest rates did rise it would lead to mass repossessions, also whilst there is a coalition government none of them wish to risk votes by alienating voters with unlikeable measures.
The key business today for most is finding out how they can decrease their outgoings in a coutnry that is taxing all to death. The knock on effect has obviously reached Spain and certainly those who have holiday homes have been hit hard myself included, the costs of travel have not come down in line with others prices etc.
For those with cash yes a great itme to increase it for those without yes a struggle, however who has it right? The amount of peopel coming to the UK just to receive benefits etc cannot go on for ever, Spanish banks are in a lot better position than British abnsk despite their recent downgrading.
Buckle up and backs to the wall me thinks!
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