What Is A Bailout We have heard a lot about the banking system
in crisis, about countries being bailed out. But come on, the figures are all huge and
it is not real money is it? So what is a bailout? First get your head around that economies
work not be the amount of money but by the speed that money moves. If no one spends, then the economy slows and
eventually a bailout is required. Take this example, An Greek hotelier owes money to his food supplier,
he cannot pay. The food supplier cannot pay his staff, suppliers etc etc, Then a rich
German tourist arrives and pays E500 for a weeks stay. The hotelier, very grateful, takes the money
and pays his food supplier. The food supplier pays his warehouse bill. The warehouse owner
pays his bar tab. The publican goes to the hotelier and pays what he owes. Then the rich German tourist comes back and
decides he will stay somewhere else, the hotelier gives him a refund. Now, nobody has any more money than before,
but nobody owes any more money. Each person in the hoteliers supply chain trusts each
other more and they start working together again. Swap hotel for country, tourist for bailout
fund. A simple analogy but one that works. For anything
else, then give us a call.