Looking at the paul/bottle deal without albums, scenario 1

So, back to the starting point for the continuation. Paul has $250, Bottle has $0.12 and 2 books. Let's say he sells those books plus 9 more out of nowhere. Bottle needs to order another 14, but he only has $30.36. He needs 143 - 30.36 = 112.64 to get them. 

This is only one of many possible continuations, by the way. Bottle really could call it quits, Paul could be done investing, Bottle could have kept going without actually paying Paul back yet, you get the idea. This chain of choices splinters off into an infinitely complex web of possibilities at every singly point. For this thought experiment we're closing out every transaction, and i'm intentionally steering toward succeeding. Bottle might not sell any more books at all, or Paul might get tricky with his lending schemes, or a tornado might roll through. Anything could happen. We waved bye-bye to actual reality quite a while ago. 

Paul, the nice guys that he is, says same deal, he'll pay the 143 but he wants back 200. That's just as fair as the first deal, right? 57/200 = 28.5%. Paul is making a little more than last time, but not really enough to quibble. 

15.12 x 11 = 166.32 +.12 = 166.44 and 5 books. 5 x 15.12 = 75.60 + 166.44 = 242.04. 

Paul gets his 200, Bottle has 42.04. We're making progress. Paul has made $107 profit, Bottle is at 42.04. We've speculated, of course. Still, though, another round is still 143, assuming that cost hasn't changed in the meantime. 42.04 isn't enough to hire an accounting major to keep track of this stuff, so we have to do it ourselves. How many hypothetical books have we sold now? Hold on, calculator time... 

... 42 books, and we're about to do it again for the 4th case of 14. Remember, we're trying to get Bottle to that magic 143. That's the actual end of the cycle. We're also eternally grateful to Paul for not changing his terms based on how well this whole thing is going. 

The next round is pretty magical, though. Paul has already made $100, so his actual risk at this point is a $1.96. Paul is basically just loaning the profits from Bottle's work back to Bottle. We started out with Paul making a profit, Bottle getting screwed, but we ended up with Paul making barely any money, and Bottle owning the full financial stake in the book. How did that happen? 

First, i designed it to happen that way. Second, the short answer is that we were never talking about money, we were talking about the exchange of ownership of that money. Like i said, i'm not using big silly words that nobody understands, i'm trying to describe the shape and movement of the system so that you can picture it in your mind. 

The only available action in this system is exchanging money in proportion to the financial stake. If Paul walked away after the first exchange then Bottle gets nothing, but if Paul lends the way i described it, the original sum will fully tranfer to Bottle (from the wider world now, rather than Paul's pocket). In this well-functioning system, the investor doesn't make any money. If Paul mistakenly thought he would make money in this system, he might also mistakenly think Bottle is the villain. 

Everybody looks glass eyed. Did i go too fast? Did i miss a step? The system i described is just a Rube Goldbergian transfer of $143 from the outside world to Bottle by way of Paul loaning money to a friend. Paul knew he wasn't going to make any money, and he was smart enough to know better than to speculate with the mirage of profit. 

The end result of successfully completing the process is that Paul didn't actually spend or gain any money. 

I did warn you this was complicated. Any part of it you want me to explain in more detail?

Times up, the answer is yes i did skip a step. Bottle hasn't paid back that 101.96 yet. Paul pays it and wants $150. 48.04/150 = 32%. Ok, now Paul's percentage is looking suspicious. Where is Bottle?

9 x 15.12 = 136.08 + 42.04 = 178.12. Pay Paul his 150, Bottle has 28.12. Kris Kristofferson, this is confusing! Paul has $157 and Bottle has $28, i think. Aw crap! I don't know, i can't keep track of this gibberish. We'll have to start all over again. We need more detail. Loaning money to yourself is confusing. 

Don't worry, Bottle. We'll get there. The one lesson we did definitely learn is that opening the alive/dead box is a sure fire way to get completely confused. I know i'm the imaginary narrator, but will you trust me? 

I guess. 

Ok, then in the next post i'll help everyone keep better track of what's happening where and when.

Sure, fine, i mean i couldn't do it.

No, no, you were doing fine. You just went a little haywire toward the end. We just have to calm down and define WHEN we are allowed to look at the system and what that snapshot is supposed to tell us. You can't jump to conclusions just because it looks good.

So from me, the Narrator who isn't Paul or Bottle, stick with us. I promise, we will eventually get some real answers. The trick is that no 1 way of thinking about it is an accurate snapshot. I need some time to make some proper notes and diagrams. Please enjoy the rest of your evening, and i promise we will all get there. I might even convince Bottle to stop talking in the 3rd person.

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