Once upon a time, a man wearing a tie showed up in a village… He climbed onto a bench, called all the villagers over, and told them he would buy any donkeys they brought him for 100 euros—in cash, no less…
The locals found it a little strange, but the price was very good, and those who sold their donkeys returned home with their wallets full and smiles on their faces…
The next day, the man in the tie offered 150 euros for each unsold donkey, so most of the residents sold their animals. In the days that followed, he offered 300 euros for each of the few animals that remained unsold, with the result that even the last holdout residents sold their donkeys…
When he realized that there were no donkeys left in the village, he announced to everyone that he would return in a week to buy any donkey he could find for… 500 euros!… And he left…
The next day, he entrusted the herd of donkeys he had bought to his business partner and sent him to the same village with instructions to sell them all for 400 euros each.
The residents, seeing the chance to earn 100 euros the following week, bought back their animals—even at four times the price they had sold them for—and, to do so, were forced to take out a loan from the local bank…
As you can probably imagine, after the deal, the two businessmen left for a vacation in a Caribbean tax haven, while the villagers were left deeply in debt, disappointed, and left with donkeys that were now worthless…
They tried to sell the animals to pay off their debts. To no avail. Their value had plummeted. So the bank seized the donkeys and then rented them back to their former owners…
The banker, however, went to the village mayor and explained that if he did not recover the funds he had lent, he too would go under and, consequently, he would immediately demand the closure of the open line of credit he had with the municipality…
In a panic, the mayor—in an effort to avert disaster—instead of giving money to the villagers to pay off their debts, gave it to the banker, who, incidentally, was the best man at the city councilor’s wedding…
Unfortunately, however, once the banker had recovered his principal, he did not write off the residents’ debt or the municipality’s debt, which, of course, left the municipality on the brink of bankruptcy…
Seeing his debts multiply and feeling the squeeze from interest rates, the mayor asked neighboring municipalities for help. They, however, refused, explaining that they had suffered the same loss with their own donkeys!…
The banker then gave the mayor some selfless advice / guidance on how to reduce the municipality’s expenses: less spending on schools, the village hospital, and the municipal police; the elimination of social programs and research; and a reduction in funding for new infrastructure projects. The retirement age was raised, most city hall employees were laid off, wages fell, and taxes went up…
It was, he said, inevitable, but he promised that these structural changes would bring order to the functioning of the public sector, put an end to waste, and… bring ethics to the donkey trade…
The story started to get interesting when it came to light that the two businessmen and the banker are cousins and live together on an island near the Bahamas, which they bought with the… hard work… They are known as the Financial Markets family, and with great generosity they offered to finance the election campaigns of the mayors of the villages in the area… This story involves businesspeople, bankers, municipal authorities, and unfortunate villagers from all over the world, since the entire planet is subject to the rules of the… Donkey Market!
