Double Your Income by Truly Understanding “Bailout” & “Financial Crisis” Explained in Layman’s Terms

Written by admin on April 22nd, 2011

Heidi Is The Proprietor Of A Bar In Norfolk

Her story will explain the messy economic calamity that has engulfed the entire developed world.  But, I have gotten ahead of myself.  Let’s get back to the story …

In order to increase sales, Heidi decides to allow her loyal customers – most of whom are unemployed alcoholics – to drink as much as they please and pay later. She keeps track of the drinks consumed in a big ledger (thereby granting the customers loans).

Word Spreads

Word gets around and, as a result, increasing numbers of drunks flood into Heidi’s Bar. Taking advantage of her customers’ freedom from the need to make immediate payment, Heidi dramatically increases her prices for wine and beer.  Of course, no one complains.  As expected, her sales volume increases massively.

The Bank Loves Heidi

A young and dynamic Customer Service Consultant at the local bank recognizes these customer debts as valuable assets and increases Heidi’s borrowing limit. He sees no reason for undue concern since he has the debts of the alcoholics as collateral.  The Customer Service Consultant is promoted for his insights.

At the bank’s corporate headquarters, Securities Analysts transform these loans into PukeBonds and BarfBonds. These securities are then traded on stock markets worldwide. No one really understands what these kinds of bonds actually are and how they are secured.  Nevertheless, as their prices continuously climb, these securities become top-selling items.

The Bank Gets Nervous

One day, although the prices are still climbing, a Risk Manager of the Bank decides that the time has come to demand payment of the debts incurred by the drinkers at Heidi’s Bar.  The Risk Manager is, of course, fired for his negativity. In the meantime, though, the drunks cannot pay back their debts and Heidi cannot fulfill her loan obligations to the bank.  Heidi claims bankruptcy.  Word gets out.

Markets Crash.  Small Businesses Fail

PukeBonds drop in price by 95 %. BarfBonds, though, perform better, stabilizing in price after dropping by only 80%. The suppliers of Heidi’s bar, having granted her generous repayment terms and having invested in PukeBonds and BarfBonds are suddenly in desperate financial situation themselves. Her wine supplier claims bankruptcy; and her beer supplier is taken over by a competitor.

The Government To The Rescue

The Government sees the failure of these small businesses as part of the economic fabric, until the Bank that extended the loans – and caused the entire problem – suddenly faces its own desperate financial situation.  You see, the senior officers of the bank and the elected officials in the Government all went to the same school and golf at the same club.  So, it is obvious that something needs to be done.

The Bank is saved by the Government, following dramatic round-the-clock consultations in a concerted effort by leaders of all political parties.  And, the debts of the unemployed drunks are paid in full by the Government in order to prevent widespread personal bankruptcies.

And, Now For the Punch Line

Where does the money come from for this bailout of the Banks and the drunks?  This is the best part. The bailout is funded by a new tax levied on fully-employed, fiscally-prudent non-drinkers. And, that’s the whole story explained.  All the rest is cover-up.

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