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A STORY TO MAKE SENSE OF THE CRISIS

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Sense of the crisis

We are bringing before you a story so that you can understand the financial crisis of 2008 and 2009. This finacial crisis was not triggered off by a buy-up of monkeys, but by a mortgage crisis, dealing in property and lending money on credit.

The Man and the Monkeys

1. Once upon a time in a village a man appeared and announced to the villagers that he would buy monkeys for $10 each.

2. The villagers knew there were many monkeys in their forest. They left their farms and went into the forest to catch them.

3. The man did buy thousands at $10. As the supply of monkeys started to diminish the villagers stopped looking.

4. The man then announced that he would buy monkeys for $20 each. This new higher price renewed the effort of the villagers and they headed back into the forest to find and catch monkeys again to sell.

5. When the monkey supply diminished even further and the people started to return to their farms, the man raised the price he would pay for monkeys to $25 each. The hunt was on again.

6. Soon the supply of monkeys became so small that a villager did not see a monkey in a day of hunting let alone catch one. But the man was not finished. He announced that he would buy monkeys for $50 each! He also explained that he had to go to the city on business and that his assistant was to stay benind to buy monkeys on his behalf.

7. As soon as the man left the assistant told the villagers „Look at all those monkeys in cages the man bought from you. I will sell them to you for only $35 each and when the man returns from the city you can sell them to him for $50 each, as he promised, and make a fat profit.“

8. The villagers were thrilled. They collected all their savings together and bought all the monkeys in the assistant´s cage, then awaited the man´s return.

9. They never saw the man nor his assistant again. All the monkeys that were once in the woods were now in the village, and all of the villagers´ saving were gone.

Welcome to the Wall Street!

Source: the Internet

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ashraf - crisis

a story based on crisis
Posted 25. 01. 2012