European Vendor Financing Ponzi Game

Nov. 23, 2011 11:04 AM ET
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Value, Growth At A Reasonable Price, Long-Term Horizon, Portfolio Strategy

Contributor Since 2008

Glen Bradford MBA contributes to Seeking Alpha primarily to read people's negative feedback so that he can avoid generating unnecessary losses. "Uncertainty will certainly work for me." - Glen Bradford March 2009.

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The Supreme Court got it wrong, which is sad, but it's not over yet.

I have come up with a game that all it takes is $200 in $1 bills to play to illustrate to children what is happening in the Eurozone. It illustrates how Germany and Italy act like they are making money but in reality, are simply buying their own goods and services via a vendor financing ponzi mechanism.

Round                    
  Germany Italy Greece  
1 Begin Round with 50 35 15  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  End 55 36 12  
 
2 Begin Round with 55 36 12  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  End 60 37 9  
 
3 Begin Round with 60 37 9  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  End 65 38 6  
 
4 Begin Round with 65 38 6  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  End 70 39 3  
 
5 Begin Round with 70 39 3  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  End 75 40 0  
          GREECE IS NOW WORKING ON DEBT  
6 Begin Round with 75 40 0  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  Greece Owes to Germany 2  
  Greece Owes to Italy 1  
  End 80 41 -3  
 
7 Begin Round with 80 41 -3  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  Greece Owes to Germany 4  
  Greece Owes to Italy 2  
  End 85 42 -6  
     
8 Begin Round with 85 42 -6  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  Greece Owes to Germany 6  
  Greece Owes to Italy 3  
  End 90 43 -9  
 
9 Begin Round with 90 43 -9  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  Greece Owes to Germany 8  
  Greece Owes to Italy 4  
  End 95 44 -12  
          Greece Needs a Bailout, Germany gives $6 and Italy gives $2
10 Begin Round with 95 44 -6  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  Greece Owes to Germany 10  
  Greece Owes to Italy 5  
  End 100 45 -9  
 
11 Begin Round with 100 45 -9  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  Greece Owes to Germany 12  
  Greece Owes to Italy 6  
  End 105 46 -12  
  Bailout Solves the Problem? Nope.  
12 Begin Round with 105 46 -12  
  Domestic Wealth Creation (Bank Pays This $1 to everyone) 1 1 1  
  Greece Spends on Germany 3   -3  
  Greece Spends on Italy   1 -1  
  Italy Spends on Germany 1 -1  
  Greece Owes to Germany 14  
  Greece Owes to Italy 7  
  End 110 47 -15  
                     
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