not know the source, but could very well be a fable of Aesop, so I copied and pasted it directly as I arrived, and that each draws its moral of this story that is asked a prestigious financial advisor to explain this crisis in a simple way, so that ordinary people understand their causes. This was his story: A man went to a village where he had never been before and offered its people 100 euros for every donkey that he sold.
Much of the population to sell their animals.
Two days later he returned and offered the best price, 150 per burrito, a similar number of people sold theirs.
returned the following week and offered 300 euros and the rest of the people sold the last donkeys. Al
seeing no more animals, offered 500 euros per burrito, meaning that the purchase on your next visit to the village, in a couple of weeks, and left.
A couple of days later, he sent an assistant with the donkeys he bought, from the same village, to offer the donkeys to 400 euros each. Given the potential gain for the following week, all the villagers quickly bought the donkeys at 400 euros, and many borrowed money to buy more donkeys. In fact, they bought all the donkeys in the region.
Much of the population to sell their animals.
Two days later he returned and offered the best price, 150 per burrito, a similar number of people sold theirs.
returned the following week and offered 300 euros and the rest of the people sold the last donkeys. Al
seeing no more animals, offered 500 euros per burrito, meaning that the purchase on your next visit to the village, in a couple of weeks, and left.
A couple of days later, he sent an assistant with the donkeys he bought, from the same village, to offer the donkeys to 400 euros each. Given the potential gain for the following week, all the villagers quickly bought the donkeys at 400 euros, and many borrowed money to buy more donkeys. In fact, they bought all the donkeys in the region.
As expected, the assistant disappeared with the money collected, like the man, who evidently did not return in the weeks following and never reappeared.
Result:
The village was full of donkeys and debt, or as donkeys look indebted.
The village was full of donkeys and debt, or as donkeys look indebted.
Let's see what happened next:
Those who had borrowed, not sell the donkey, they could not repay loans. Those who had borrowed money
complained to the council saying that if charged, will ruin them, then they could not continue to provide and will ruin the whole village.
For lenders not ruin, the mayor, municipal funds with local taxes and the allocation of provincial budgets, instead of giving money to people Village to pay the debt, gave it to the lenders themselves so they do not fail. But these, as much of the money collected, however, spared no debts to the people, which was the same for debt and unable to repay loans.
Mayor of the City squandered the budget, which was also in debt.
then asked for money to other municipalities, but they told her they could not help because, as was broke, I could not charge after you pay.
The result:
The "ready" in principle, covered.
lenders, with their profits resolved and a lot of people who continue to be charged what they borrowed plus interest, even taking over the devalued and donkeys with which they will never cover the entire debt. Many people broke and without a donkey for life.
The City also ruined. The mayor felt he had to find a solution.
To solve this and save all the people, the City prepared adjustments and reforms to reduce the hours of consumption of water from public sources, close the "Retirement Home" and get the salary to their staff.
Those who had borrowed, not sell the donkey, they could not repay loans. Those who had borrowed money
complained to the council saying that if charged, will ruin them, then they could not continue to provide and will ruin the whole village.
For lenders not ruin, the mayor, municipal funds with local taxes and the allocation of provincial budgets, instead of giving money to people Village to pay the debt, gave it to the lenders themselves so they do not fail. But these, as much of the money collected, however, spared no debts to the people, which was the same for debt and unable to repay loans.
Mayor of the City squandered the budget, which was also in debt.
then asked for money to other municipalities, but they told her they could not help because, as was broke, I could not charge after you pay.
The result:
The "ready" in principle, covered.
lenders, with their profits resolved and a lot of people who continue to be charged what they borrowed plus interest, even taking over the devalued and donkeys with which they will never cover the entire debt. Many people broke and without a donkey for life.
The City also ruined. The mayor felt he had to find a solution.
To solve this and save all the people, the City prepared adjustments and reforms to reduce the hours of consumption of water from public sources, close the "Retirement Home" and get the salary to their staff.
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