Shadow Economy

we are hearing on the news about the possibilty of Woolworths going into administration. Is this not a sympton of the current economic crisis, which Darling hopes to solve with his emergency budget, rather than a pre-budget report.

How do stores work, they borrow money from the banks to enable them to purchase goods which they then sell for a profit. The banks lend them money on the basis that the loans can be repaid.

In the meantime the suppliers of the goods give the stores the goods to be sold in return for the money which the stores receive when they sell the goods to the public.

Now this is very simple.

Only problem is that with the internet there really is no need for the stores anymore. They have had their day. What I do when I want to buy a camera is to go to my retailer, get all the gen on the product, which is the best has the highest specification etc, then say thank you very much, then go on to the internet and buy it directly from the producer.

Just thought I would tell you this so that Gordon Brown does not live in ignorance of the real world, you know like Gordon Brown not knowing that there was a shadow banking system. There is a shadow shopping suystem as well as something called the black economy.