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Now, how to put this on the radio...
Wow. Just wow.
Economist Kevin Nguyen explains the country's economic woes to his younger sister, using Pokemon as an analogy. Seriously.
The following is an actual conversation I had with my younger sister, Olivia. She likes to draw, play World of Warcraft, and now, she's the only fourteen-year-old girl who understands the U.S. economic crisis.
Kevin: Have you been following the news?
Olivia: Yeah, I don't really get it.
Kevin: Imagine that I let you borrow $50, but in exchange for my generosity, you promise to pay me back the $50 with an extra $10 in interest. To make sure you pay me back, I take your Charizard Pokemon card as collateral.
Olivia: Kevin, I don't play Pokemon anymore.
Kevin: I'm getting to that. Let's say that the Charizard is worth $50, so in case you decide to not return my money, at least I'll have something that's worth what I loaned out.
Olivia: Okay.
Kevin: But one day, people realize that Pokemon is stupid and everyone decides that the cards are overvalued. That's right--everybody turned twelve on the same day! Now your Charizard is only worth, say, $25.
And it goes on from there.
Via kottke
About the author
Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy. Follow Kai on Twitter @kairyssdal.
You know, to further expand upon that Pokemon analogy,
As a mortgage manager:
Ok, since it will take you a while to pay back the fifty dollars, I will take smaller payments, say ten dollars a week. The first few payments you make to me, will just be interest. Eventually, you will start "really" paying me back. In the end, you will pay me one hundred dollars for the fifty you have borrowed. If you want to pay me off earlier, It will cost you twenty five dollars, because I am counting on you to not have enough money so you will pay me more. I also thought I might tell you, that you are going to lose your baby sitting job because your neighbors found out that the neighbor on the otherside will babysit for $2.50 a week instead of the $10 you were charging. Although, there is a person across the street who need their yard mowed for $5 a week.
Olivia: So let me get this straight. I am going to pay you $100 for the $50 I borrowed or lose the card that, to be truthful, was really never worth more than $25, but due to everyone else expecting it to go up in value, did so. And to boot, I am going to lose half of what I make, and work harder to make it. Hey! Didn't the neighbors I babysit for just get a huge bonus, go on vacation and buy a new car?
