Thanks to Mayilraj Kalimuthu
It is August. In a small town on the South Coast of France ,the holiday season is in full swing, but it is raining so hard that 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 100 Euro note on the reception counter, takes the 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 supplier to pay his debt. The wholesaler rushes to the farmer to pay E100 for the pigs he had bought some time ago. The farmer triumphantly gives the E100 note to a local hair dresser who had provided him his services on credit. The hair dresser quickly goes to the hotel, as he owed the hotel for using a room a month back. At that moment, the rich Russian comes down to the 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. There was NO real economic activity. But everyone is no longer in debt and the small town people look optimistically towards their future. That's the power of the velocity of money!
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