The Fractional Reserve Cycle 

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One day he decided to kill the goose and  Explode My Payday Review take the eggs out so he could get them quicker. Only a few small eggs were found inside, and when they were gone, there were no more eggs. The thief eventually lost everything as a result of his greed. This story and others like it have fallen out of favor with the educational experts today, but they taught some important lessons. Our children are being deprived of some very basic education as a result. In recent years, we have seen real life examples of this particular story time after time. The Enron scandal is a prime example. The founders of Enron built up a large oil producing company that made profits for many years. Ken Leigh was able to take control of the company, and began to try to get more from it. At first, he stopped spending money on development of new supplies. While it gave a temporary spike in profits, by reducing expenses, it left the company with less ability to produce, effectively starving the company.

The increase in profits prompted a raise in stock prices, even though it indicated a loss of value. The increase in stock prices gave Leigh a large personal profit, but he couldn't starve the company any more so he began to disembowel the company, selling off oil rights and production facilities. The influx of capital was seen as a positive thing by the stock market and stock prices mushroomed, Finally all the production assets were gone, and there was no further increase of cash, and it was discovered that the company was no longer producing. Leigh had sold his stock and walked away, but those who had bought lost their shirts. The company collapsed because the goose was dead. The same scenario is being played out on a much larger scale with the U.S. economy. For years, the economy had steadily produced slowly increasing profits. Over time those benefiting became more concerned with the profits than with the health of the economy. Government began to demand more and more, as did investors and financial institutions. The increased taxes, compensation requirements, and difficulty of obtaining employees, coupled with increased competition from overseas competitors began to starve the companies. They began to move production outside our economy in an effort to make profit. This in effect was a cutting open the goose to get to the next egg. It greatly weakened the goose, lowering production , but was not immediately fatal.

  Friday, February 8, 2019 at 11:19:35 PM

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