1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.

2) B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B owned a piece of land that is worth 1 dollar.
* The net asset of the country now = 3 dollars.

3) Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars.

*A has a loan to C of 1 dollar, so his net asset is 1 dollar.
* B sold his land and got 2 dollars, so his net asset is 2 dollars.
* C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.
* Thus, the net asset of the country = 4 dollars.

4) A saw that the land he once owned has risen in value. He regretted having sold it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from B and acquired the land back from C for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C. As a result, A now owned a piece of land that is worth 3 dollars. But since he owed B 2 dollars, his net asset is 1 dollar.

* B loaned 2 dollars to A. So his net asset is 2 dollars.
* C now has the 2 coins. His net asset is also 2 dollars.
* The net asset of the country = 5 dollars. A bubble is building up.

(5) B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 dollars. The payment is by borrowing 2 dollars from C, and cancellation of his 2 dollars loan to A.

* As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.
* B owned a piece of land that is worth 4 dollars, but since he has a debt of 2 dollars with C, his net Asset is 2 dollars.
* C loaned 2 dollars to B, so his net asset is 2 dollars.

* The net asset of the country = 6 dollars; even though, the country has only one piece of land and 2 Dollars in circulation.

(6) Everybody has made money and everybody felt happy and prosperous.

(7) One day an evil wind blew, and an evil thought came to C’s mind. “Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollars in circulation, and, I think after all the land that B owns is worth at most only 1 dollar, and no more.”

(8) A also thought the same way.

(9) Nobody wanted to buy land anymore.

* So, in the end, A owns the 2 dollar coins, his net asset is 2 dollars.
* B owed C 2 dollars and the land he owned which he thought worth 4 dollars is now 1 dollar. So his net asset is only 1 dollar.
* C has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his Heart is palpitating.
* The net asset of the country = 3 dollars again.

(10) So, who has stolen the 3 dollars from the country ? Of course, before the bubble burst B thought his land was worth 4 dollars. Actually, right before the collapse, the net asset of the country was 6 dollars on paper. B’s net asset is still 2 dollars, his heart is palpitating.

(11) B had no choice but to declare bankruptcy. C as to relinquish his 2 dollars bad debt to B, but in return he acquired the land which is worth 1 dollar now.

* A owns the 2 coins, his net asset is 2 dollars.
* B is bankrupt, his net asset is 0 dollar. ( he lost everything )
* C got no choice but end up with a land worth only 1 dollar

* The net asset of the country = 3 dollars……….

There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting -

(1) when a bubble is building up, the debt of individuals to one another in a country is also building up.
(2) This story of the island is a closed system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island’s own currency. Hence, there is no net loss.
(3) An over-damped system is assumed when the bubble burst, meaning the land’s value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the losers. The asset could shrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another piece of land but refrains from taking part in the game, he will neither win nor lose. But he will see the value of his money or land go up and down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like A ) and take part in the game. But you must know when you should change everything back to cash.
(8) As in the case of land, the above phenomenon applies to stocks as well.
(9) The actual worth of land or stocks depends largely on psychology.

Will definitely be watching it.

Those of  you who can’t can get the live scores at CricketNrivana.com via http://scores.cricketnirvana.com/

Watch out australia!!

Check out the video below, and check out the wiki for this song:

Thanks to Uncle Ivy for sharing the stupidity.

Source: Vishwanath and Vishwesh

‘Please give us your honest opinion about solutions to the food shortage in the rest of the world?‘

The survey was a huge failure…

In Africa they didn’t know what ‘food’ meant.

In India they didn’t know what ‘honest’ meant.

In Europe they didn’t know what ’shortage’ meant.

In China they didn’t know what ‘opinion’ meant.

In the Middle East they didn’t know what ’solution’ meant.

In South America they didn’t know what ‘please’ meant.

In the US of A they didn’t know what ‘the rest of the world’ meant!

Am also looking for a wallchart customized to Indian time, that I can use as a wallpaper. If I come across one or create one, will surely share it here.

Watch this space.

Source: SMS forward

“At the State Department on Tuesday, spokesman Sean McCormack told reporters that the U.S. action is meant to protect people from the hazardous fuel and is not a weapons test.”

I think with the controversies that go around about the US, the rest of the world isn’t looking at it as an ‘earth-saving’ mission like from the Armageddon. To me, and to China and Russia, this looks like an excuse to test Space Warfare.

“The three-stage Navy missile, designated the SM-3, has chalked up a high rate of success in a series of tests since 2002, in each case targeting a short- or medium-range ballistic missile, never a satellite. A hurry-up program to adapt the missile for this anti-satellite mission was completed in a matter of weeks; Navy officials say the changes will be reversed once this satellite is down.”

Once the US has successfully tested used its missile for space warfare earth-saving procedures, would the rest of the planet, eg: Russia, China; sit back and applaud them? I think we better get our brollies out. It might start raining satellites soon. This might even mean more money for India huh? More satellites being tested upon destroyed will mean more needing to be launched. The GSLV happens to be a very effective launch vehicle. We better start making some more.

Some implications of the ‘only Maharashtra and Marathi in Mumbai’ sentiment that’s going around…

• No more udipi joints to eat dosas et all. That’s not Marathi food.
• No more Hindi movies, i.e. the end of Bollywood.
• No more BSE/NSE/NIFTY/SENSEX - can’t deal in anything that’s not Marathi right? Let’s just demolish one of the most dynamic markets in the world.
• No more Marutis, Hondas, Hyundais, in other words…cars. (Can’t think of a car that’s Marathi made.)
• We might continue to have Bajaj Pulsars, but then that’s debatable. It’s made in Maharashtra, but the company isn’t. (Many of the non-Marathis here today are ‘made in Maharashtra’ but the family is not Maharashtrian)
• We can’t use ACs no more. Wudn’t be enough electricity. “The power supply system in Bombay is linked to the Maharashtra State grid, which in turn is part of the western grid– connecting Maharashtra, Gujarat, Madhya Pradesh and Goa” {Source}. If we disallow whats not Maharashtrian, we can’t let that power in can we?
• We would need to have barriers half way into the ocean, can’t let outside waters into Mumbai. For that matter, lets dome the state. Can’t let outside weather in, Maharashtra’s winds aren’t getting a ‘chance’.
• Airports need to be demolished ASAP. That’s a strict no-no.
• Bye Bye outsourcing. We can no longer communicate with the outside world. No longer will our economy thrive.

That’s just some of the things I can think of.

For the fear of my own safety, I am not saying I am against this movement. I am just enlightening people on what we need to be ready for.

So lets get ready people. For thy votes sake, we need to make a sacrifice!

[P.S. Surprisingly, I don’t see too many bloggers writing about this topic that is now haunting Mumbai. I wonder why…]