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Warren Buffett: Here’s How I Would Solve the Trade Problem (2016)
- blacksqr 7y agoIf the only asset the Squanders have is land (which they already own) and the only thing the Squanders and Thrifts can produce is food (which the Squanders are getting from the Thrifts in exchange for Squanderbonds), then why would the Squanders give Squanderbucks to the Thrifts to buy Squanderbonds? Better for the Squanders to let the Thrifts exhaust their soil from overfarming, while the Squander soil regenerates. Then, when the Thrifts realize they face starvation, the Squanders can hire them as indentured servants to farm Squander Island land. The Squanders can keep the Thrifts on a near-starvation diet so that Squander soil isn't exhausted until Thrift soil regenerates. While the Thrifts are toiling on Squander soil and serving the Squanders hand and foot, the Squanders can annex Thrift Island and ensure total ownership of all productive land forever. The Thrifts could avoid this fate, of course, by eating their Squanderbonds. As the old proverb says, if you owe the bank $1000, it's your problem. If you owe the bank $10,000,000, it's the bank's problem.