It is the month of August, a resort town sits next to the shores ofa lake. It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives oncredit.
Suddenly, a rich tourist comes to town. He enters the only hotel, lays a 100 dollar bill on the reception counter, and goes to inspectthe rooms upstairs in order to pick one.
The hotel proprietor takes the 100 dollar bill and runs to pay hisdebt to the butcher. The Butcher takes the 100 dollar bill, and runs to pay his debt tothe pig raiser. The pig raiser takes the 100 dollar bill, and runs to pay his debt to the supplier of his feed and fuel. The supplier of feed and fuel takes the 100 dollar bill and runs topay his debt to the town's prostitute that in these hardtimes, gave her "services" on credit. The hooker runs to the hotel, and pays off her debt with the 100 dollar bill to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.
The hotel proprietor then lays the 100 dollar bill back on the counter so that the rich tourist will not suspect anything. At that moment, the rich tourist comes down after inspecting the rooms,and takes his 100 dollar bill, after saying that he did not like any of the rooms, and leaves town. No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism.
That's Economic Stimulus 101 for you. Many clueless idiots running shady web-sites assume that currency is wealth. No, It is just a tool to grease the economy. It is about Liquidity. In a service based economy, it is even more true. The ultimate wealth destroyer is FEAR. Yet cluesss idiots running shady web-sites supply it in abundance and indulge in Financial Terrorism.
Of course, unlike the story, it is very difficult for Fed to place the $Bill at the right time & to take it away at the right time. But any attempt towards that is million times better than fear mongering which seem to run rampant in media these days.
I would rather Fed print money than print fear......



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