I got this from some friends who have an 8-year-old daughter whom I’ll call Franny:
Friend (looking at Franny’s artwork, which is labeled “$10,000”): How much do I have to pay you for that picture?
Friend: Is that in real money or pretend money?
Franny: You can pay me $5,000 in real money and $5,000 in pretend money. And if you only want to pay me the pretend money, then you get to borrow the picture for the weekend.
I’ve been struggling for weeks trying to think of the perfect real-world analogy – maybe something to do with assets being held on the books at $10,000 that everyone knows are only worth $5,000. Maybe one of our readers can come up with right answer (like in The New Yorker’s cartoon caption contest).
By James Kwak