It is August. In a small town on the South Coast of France, holiday season is in full swing,
but it is raining so there is not too much business happening.
Everyone is heavily in debt. Luckily, a rich Russian tourist arrives in the foyer of the small local hotel.
He asks for a room and puts a Euro100 note on the reception counter,
takes a key and goes to inspect the room located up the stairs on the third floor.

The hotel owner takes the banknote in hurry and rushes to his meat supplier to whom he owes E100.

The butcher takes the money and races to his wholesale supplier to pay his debt.

The wholesaler rushes to the farmer to pay E100 for pigs he purchased some time ago.

The farmer triumphantly gives the E100 note to a local prostitute who gave him her services on credit.

The prostitute goes quickly to the hotel, as she owed the hotel for her hourly room use to entertain clients.

At that moment, the rich Russian is coming down to reception and informs the hotel owner that the proposed
room is unsatisfactory and takes his E100 back and departs.

There was no profit or income. But everyone no longer has any debt and the small town people look optimistically towards their future.

COULD THIS BE THE SOLUTION TO THE Global Financial Crisis? Or, is there a catch here?

Nice tale with a serious side

yes:- you might have read during the wither about a huge amount of work being done to document all the CDO "swap" contracts - they've been tearing up thousands of them that effectively cancel each other out.  So, yes, it is part of the solution to the financial crisis.

the issue is that in real life, human beings have been in play, and somewhere along the line someone actually used up the money and can't pay.  Maybe they drank that Chateau Lafitte, or bought a load of meat they couldn't sell in time, or maybe they just paid top dollar for something that never was worth anything in the first place (e.g. a 3G operators licence).  So unlike the story, the real life circle doesn't add up.  

The bigger issue is that the banks have lost the convenient trick they were using to lend much more money than they are officially allowed to lend.  As a result of which, we're all going to have to compete harder to borrow money from them, as a result of which none of us has so much money to spend.  I.e. after the rich Russian has left, everyone is starting again, but with 30 Euro instead of 100 Euro - and everyone feels hard done by.  

And in the end after the clearout is complete, and after some scapegoats have been financially ruined (including entire countries) - yes, the World's people will look optimistically towards their future.  

No catch.

WOW, real deep for the jokes section. However, you are quite correct so let's hope that the clearout is completed soon!

Since this post is quite serious, its more like a Chat post, rather than a Joke post. Lets hope the recovery comes quickly.

Did anyone say jokes shouldn't reflect real life?

The fastest way to speed up the recovery is to realise that this is it.  The 10-year cash-fest is over, and new rules apply.  Tangible assets that people need (and to some extent hard cash) are worth more than a sexy idea and fast talking.  

Is that good or is it bad?  Your choice.  

In many ways, the shake-out IS the recovery: the crash in asset prices is a lot more sane than thinking we can borrow money and not have to repay it, or thinking that millions of baby-boomers can all retire early and live off work done by Gen X / Y and Z without a backlash.  

My view is that playing to win means playing for win / win.  Find a way to give value to others, and it doesn't matter what the economy is doing.  

Sorry, WAAAY too philosophical for this section, I know!!!  

But I love the joke - the absurdity and the truth in it makes it bittersweet!