It’s a rainy day in a distant town secluded from the busy life of Mumbai. Because of very heavy showers, the streets are completely vacant. With the crumbling economy and poor employment, everybody in the town is in debt and everybody lives on credit.
Circle of debt in stock market
On one of these days, a tourist from Spain was driving through the town. Due to the heavy showers and minimal visibility, he plans to spend the day in a hotel. He comes inside the hotel front desk and placed a thousand rupees note and mentions that he would first want to inspect the rooms and select the one which he would prefer to stay in.
While the hotel boy took the tourist upstairs for room inspection, the hotel owner takes the note and ran to the butcher to pay off his debt. The butcher quickly took the note and paid off his debt to the poultry farmer. The poultry farmer immediately cleared off his debt by paying the note to the poultry feeder.
The poultry feeder rushed to the farmer and paid off his debt by handing over the note. The farmer had dues to his laundry friend for buying grains and paid off the thousand rupees note to him. The laundry guy rushed to the hotel owner and paid him the note for letting him use the garage for keeping his customer’s clothes.
The hotel owner now placed the thousand rupees note back on the front desk. At the very moment, the tourist came down after inspection, picked the note from the counter and told the owner that the rooms are not satisfactory.
The question is very simple – How is it that nobody produced anything or even earn anything throughout the chain of events, however, the whole town managed to get out of debt?
Also Read : Circle of Debt- Solution