How Wall Street operates

Once upon a time in a village in India, a man told the villagers that he would buy monkeys for Rs. 200 each.

The villagers seeing there were many monkeys around, went out to the forest and started catching them.

The man bought thousands at Rs. 200, but, as the supply started to diminish, the villagers stopped catching monkeys. The man further announced that he would now buy at Rs. 250. The villagers renewed their efforts and caught more monkeys. Soon the supply diminished even further and people started going back to their farms. The offer rate increased to Rs. 300 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at Rs 500 each! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.

In the absence of the man, the assistant told the villagers: “Look at all these monkeys in the big cage that my boss has collected. I will sell them to you at Rs. 400 and when he returns from the city, you can sell them back to him for Rs 500.”

The villagers squeezed together their savings and bought all the monkeys.

Then they never saw the man or his assistant again, only monkeys everywhere!

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