The Current Market Explained
One day a Chinese businessman arrives at a small island in the South Pacific and says he will buy all the monkeys the locals can supply at $1 each.
The island is overrun with monkeys and $1 is a decent price, so the islanders readily agree.
After the initial influx of monkeys life gets back to normal, $1 is a fair price but not outrageous, so supply gradually dips off.
In order to attract a bit more interest, the businessman ups his offer to $2/monkey. This creates a fresh surge of supplies and suddenly the businessman has a huge cage of monkeys waiting to be shipped home.
Within a week there are hardly any monkeys left roaming free on the island so the locals start bringing monkeys in from neighbouring islands, eventually exhausting supplies there as well.
The businessman announces that he is going away to arrange a boat to take all the monkeys to China. To make sure that there are enough monkeys to fill the ship, he will pay $10/monkey on his return for every monkey the islanders can provide.
The islanders are cock-a-hoop, $10 for one monkey is a phenomenal price, but where are they going to get any more monkeys? The entire local supply has all but vanished.
Whilst the businessman is away fixing his boat, his deputy offers to open the cage and sell the islanders as many monkeys as they want for $5/head. Whilst in captivity they have been breeding like mad and there are thousands of them. They can then re-catch them and supply them to the businessman at $10/each upon his return.
The islanders are thrilled, and quickly hand over as much money as they can raise plus cash borrowed from all the other islands in the region.
They never saw the Chinese businessman or his deputy ever again, just bloody monkeys everywhere.
The island is overrun with monkeys and $1 is a decent price, so the islanders readily agree.
After the initial influx of monkeys life gets back to normal, $1 is a fair price but not outrageous, so supply gradually dips off.
In order to attract a bit more interest, the businessman ups his offer to $2/monkey. This creates a fresh surge of supplies and suddenly the businessman has a huge cage of monkeys waiting to be shipped home.
Within a week there are hardly any monkeys left roaming free on the island so the locals start bringing monkeys in from neighbouring islands, eventually exhausting supplies there as well.
The businessman announces that he is going away to arrange a boat to take all the monkeys to China. To make sure that there are enough monkeys to fill the ship, he will pay $10/monkey on his return for every monkey the islanders can provide.
The islanders are cock-a-hoop, $10 for one monkey is a phenomenal price, but where are they going to get any more monkeys? The entire local supply has all but vanished.
Whilst the businessman is away fixing his boat, his deputy offers to open the cage and sell the islanders as many monkeys as they want for $5/head. Whilst in captivity they have been breeding like mad and there are thousands of them. They can then re-catch them and supply them to the businessman at $10/each upon his return.
The islanders are thrilled, and quickly hand over as much money as they can raise plus cash borrowed from all the other islands in the region.
They never saw the Chinese businessman or his deputy ever again, just bloody monkeys everywhere.
