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It is 910AD. You are a young peasant in the villaeg of [VILLAGE], in the country of [COUNTRY] in eastern Europe, near the shore of [NAME OF LAKE OR SEA]. You and your younger brother have a small hut and a horse, and live adequately, if not comfortably, on the little money you make hiring out as transporters of goods around the area.
One rainy day you and your brother are heading out of town with a load of oats for the local Baron's prized horses when the Baron himself appears with his prized dogs, preparing to go hunting deer. You and your brother bow to him, and he dutifully ignores the gesture as he passes. Your brother, in a fit of pique, kicks a stone at one of the dogs. The dog yelps and attacks your horse, which kicks out, hitting another of the dogs. The heavy load of grain falls from your horses back as he rears and kills one of the dogs. The rest of the dogs join the fray, and in short order your horse and three of the dogs are dead. Your brother has a boot on his neck and you have a knife at yours.
The baron is enraged "You owe me for the dogs, and the grain, and the inconvenience. Until you have paid your debt, your brother will be a guest in the dungeon, where you will pay his rent and his meals. You may have him back when I am satisfied your debt is cleared."
You are taken to the blacksmith where the Baron has a chain welded tightly around your neck, from which dangles two tokens; One in the shape of a key, and one of a coin.
"Everyone in my town will know that you are in my debt, and that you are desperate. They will not treat you kindly. Remember to feed your brother or I will feed him to my dogs!"
The Baron and his men take their leave. The blacksmith is watching all of this with a sour look on his face. "I can't help you, boy, other than to give you this" - he hands you a tiny knife, the size of a finger, but sharp and of good metal - "and to offer some advice: People know you. They know you are a good boy, and a hard worker. You are smart, too. You have worked for a long time carrying goods. Now you must learn to buy and sell to keep you and your brother alive. Now go, before the Baron locks me next to your brother."
And so this is where you are. You have a tiny knife, a dead horse, a small hut, and the clothes on your back. Good luck to you.
Also, what can you do with the dead horse? Can you trade it, One Red Paperclip style?