The $50 billion loss by Madoff (article) is amazing amount of money, but nothing compared to the size of the multi-trillion dollar Ponzi scheme run by the United States government!
In fact, rather than looking to jail Madoff, President-elect Obama should consider making him our new Treasury Secretary. If not that, at least make him the czar of something! – Peter Schiff (article)
The Social Security Administration runs its “trust funds” with precisely the same methods used by Madoff and Ponzi. As money is collected by from current workers, the funds are then dispersed to those already receiving benefits. None of the funds collected are actually invested, so no investment returns are ever generated. Those currently paying into the system are expected to receive their returns based on the “contribution” made by future workers. This is the classic definition of a Ponzi scheme.
The Movie IOUSA does a great job of summarizing the Social Security crisis , as well as Medicare, Medicaid and the over all financial mess the US is in.
The United States Government runs its own balance sheet based on the Ponzi principal as well. Our national debt always grows and never shrinks. As existing debt matures, proceeds are repaid by issuing new debt. Interest payments on existing debt are also made by selling new debt to investors. The whole scheme depends on an ever growing supply of new lenders, or the willingness of existing lenders, to continue to roll over maturing notes. Of course, as was the case with Madoff, if enough of our creditors want their money back, the music stops playing.
And it appears the music is almost over, as china begins to warn they will not continue to finance our sinking ship (article), Combined with the fact that taxpayers where lied to about the price of the bailout, it was not 700 million, it’s over 8.5 trillion as reported by the San Francisco Chronicle. (article)
The Federal Reserve has already said they will provide UNLIMITED support to the central banks, by allowing them to borrow any amount they wish. (article)
And to make the hole deeper, the Federal Reserve is now considering issuing their own Debt, Which could include creating new paper money. (article)
As Ron Paul has said:
you can’t print your way out of a recession
December 18, 2008 at 5:29 am |
Nice work. At least in Madoff’s Ponzi scheme, he took in money to pay other clients. He didn’t create the money out of thin air! The scheme the Fed is running right now will make Madoff’s look like child’s play.
December 18, 2008 at 1:29 pm |
Absolutely right!
Like Jim Rogers said ” The Fed is going to print money until we run out of trees”