GREAT EXPLANATION on QE2 / Quantitative Easing round #2
The innkeeper grabs the $50, runs next door and pays his debt to the butcher.
The butcher takes the $50, runs down the street and pays his debt to the pig farmer.
The pig farmer takes of with the $50 to pay his supplier of feed and fuel.
The supplier takes the $50 and runs to the local prostitute who is also facing hard times and she too has to offer her services on credit.
The prostitute takes the $50 and heads to the local Inn where she pays the $50 bill to the innkeeper to settler her debts.
The man from out of town comes down from his room and not being satisfied, asks for his $50 dollars back and leaves.
No one produced anything. No one earned anything. However, the whole town is now out of debt and now looks to the future with a lot more optimism.
And that, ladies and gentlemen is QUANTITATIVE EASING.
REF: Dam sink hole - Morning Glory Spillway and Monticello Dam, Napa County, California.