Solving the Greek Debt Crisis Without Inflating the Money Supply

The possibilities were illustrated by this anecdote circulated on the Internet, suggesting how the Greek debt crisis might have been resolved:

greek village

It is a slow day in a little Greek village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.

german touristOn this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a € 100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the € 100 note and runs next door to pay his debt to the butcher. The butcher takes the € 100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the € 100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers’ Co-op takes the € 100 note and runs to pay his drinks bill at the tavern. The tavern keeper rushes to the hotel and pays off his room bill to the hotel owner. The hotel proprietor then places the € 100 note back on the counter so the rich traveler will not suspect anything.

BILLET_100RAt that moment the traveler comes down the stairs, picks up the € 100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

The money supply has not changed; but the whole village is now out of debt and looking to the future with a lot more optimism.

h/t Ellen Brown

Leave a Comment

Your email address will not be published. Required fields are marked *


This site uses Akismet to reduce spam. Learn how your comment data is processed.