Once upon a time, in a village, a man showed up and told the villagers that he would buy monkeys at $10 each. The villagers, aware that the area had plenty of monkeys, went to the forest and started hunting them. The man bought hundreds of monkeys at $10 each and the villagers then slowed down their efforts in the hunt. The man then said he'd pay $20 for each monkey and the villagers redoubled their efforts and went hunting again.
Soon the monkeys became hard to find, and the villagers started to give up the search. The offer went up to $25, but the number of remaining monkeys was so small and little interest in the hunt remained.
The man then announced he would pay $50 for each monkey, but since he had to go to a big city on business, his assistant would handle the payments.
While the man was away, the assistant told the villagers: "Look at all these caged monkeys the man bought from you. I can sell you each for $35, and when he returns he will pay you $50 for each.
The smart villagers took all their money and bought all monkeys from the assistant.
They never again saw either the man or the assistant, only monkeys all over the place.
Now do you understand how the stock market can work and how this crisis occurred?
While the man was away, the assistant told the villagers: "Look at all these caged monkeys the man bought from you. I can sell you each for $35, and when he returns he will pay you $50 for each.
The smart villagers took all their money and bought all monkeys from the assistant.
They never again saw either the man or the assistant, only monkeys all over the place.
Now do you understand how the stock market can work and how this crisis occurred?
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