What if money goes into a place where everyone owes each other?

Do you know exactly how money works? The paradox that we’re going to tell you about today may help to understand this. “The rich guest paradoxThis concept, called “, allows us to better understand how money actually circulates.

In order to make a lot of money, first of all, it is necessary to understand how money works. When we realize that money is an intermediary at many points, our point of view may also change.

What exactly is the rich guest paradox?

In an economically difficult town, everyone owes each other. There is also a hotel in this town that is about to go under. One day, a rich guest comes to this hotel and wants to spend the night there. However, he says he wants to see all the rooms before he takes the room. The receptionist, on the other hand, asks the guest for a deposit, which he will pay back if he does not like the rooms. Guest deposit 500 TL He gives it to the receptionist and starts to tour the rooms.

This money given by the guest corresponds to the 1-month salary that the hotel could not pay the cook. The cook, who took the money, paid the grocery debt that he had to print because he could not get his salary. that’s exactly what it’s worth sees. The grocery store also had his child treated by the doctor, and he owed 500 TL to the doctor for this. He gives the money to the doctor. The doctor, on the other hand, pays the salary of 500 TL, which the newly arrived nurse could not pay, with this money.

The nurse is staying at the hotel because she is new in town. With this money, the hotel pays off its debt. In this process, guests visiting the rooms He doesn’t like any room and wants to take his money and go back. The receptionist, on the other hand, returns the 500 TL he received from the nurse to the guest upon this request.

This paradox shows us how money works.

According to the story, the live money that entered the market circulated from hand to hand and reached the first person again. In this process too Everyone’s debt has been paid.

In fact, if all of these people had come together and calculated their debts, these debts would have been closed without the need for money. However, that in the real market We know it’s not very possible. For this reason, the money entering the market acted as a kind of guarantor and the money cycle was ensured.

Banks actually work with a similar system.

Bank, gives a loan to another customer with the money deposited by a customer into his own account and thus generates income. In other words, he earns money by giving money that does not belong to him to someone else. Here, the receptionist put the money entrusted to him into the market, and after he paid off his debt, he gave the money back to the customer with the money he got back. There was no need for him to go bankrupt because the debt was closed.

The rich guest paradox provides us with important insights into the way money works. If you want the continuation of this kind of paradox content, which we see how important the hot money entering the market is, let us know. You can specify in the comments.