You are currently browsing the tag archive for the ‘liquid assets’ tag.
Amsterdam, 29 september 2009
Last Friday, as announced earlier, we ran three banks at the Discovery Night 09 science fair. Ran them to the ground would be more accurate, but we had great fun in the process and so did some of our customers. However, there were a few hiccups; here is a list of the 10 things to remember for the next time we run a Ponzi scheme.
#1 Provide advice to those that won a lot. Indeed, who arrives early at a science fair or indeed any other party and is thus able to enter the scheme before anyone else understands it? Answer: Geeks. But what would a pair of geeks do with 30 free drinks? They need help for simple things such as: it may be the time to offer the hot exchange student from Cameroon a pint.
What exactly is finance? The great economist John M. Keynes answered that question in one word: a casino. Many may object to this definition, but at the end of the day you always find a lottery-like dimension to any financial enterprise.
Since finance is a game, a game is precisely what we are going to propose on Friday the 25th at the Discovery Night 09. We’ll create a vodka deposit bank with a very juicy rate of return for the depositors… and then we’ll cash it like it is 1720 all over again, John Law-style.
What is a vodka deposit bank exactly? Easy: depositors are invited to purchase bonds worth a tenth of a drink and then to trust us with it. As mentioned, the rate of return is pretty high so after 30 minutes or so the depositor will be able to cash in on their gains.
Of course, at one point more people will want to retrieve their money than the bank can accommodate and we will have to suspend payments instantly. We will then be declared bankrupted since it is unlikely that the Dutch government will bail us out (even though our management was not worse than Fortis’). We’ll just borrow money from the mob to run our bank two or three more times to the ground.
Granted, the scheme is a bit crude, but it is for a good cause: to make our project better known. Besides, we had the ambition to use champagne instead of vodka but Oscar said no arguing that “true champagne is bubbly enough for our purpose, but vodka is more liquid”.
I leave you on that thought, see you Friday night.
Benjamin Guilbert
