I’ve often wondered this as it pertains to the current ponzi
scheme I’m invested in. If you asked
anybody how long you should invest in a ponzi scheme they’d tell you, if they like you that is,
not long at all.
For the uninitiated
the following is from Wikipedia on what a ponzi scheme is.
A Ponzi scheme is a fraudulent investment operation that pays returns to
its investors from existing capital or new capital paid by new investors,
rather than from profit earned by the individual or organization running the
operation. Operators of Ponzi schemes usually entice new investors by offering
higher returns than other investments, in the form of short-term returns that
are either abnormally high or unusually consistent. The perpetuation of the
high returns requires an ever-increasing flow of money from new investors to
sustain the scheme.
The scheme is named after Charles Ponzi,[2] who
became notorious for using the technique in 1920.[3]Ponzi did not invent the scheme (for example, Charles Dickens' 1844 novel Martin
Chuzzlewit and 1857 novel Little Dorrit each
described such a scheme),[4] but his
operation took in so much money that it was the first to become known
throughout the United States. Ponzi's original scheme was based on thearbitrage of international reply
coupons for postage stamps; however, he soon
diverted investors' money to make payments to earlier investors and himself.
Here is the guy who it is named after.
I have a new friend at work. Lately I’ve shared with him some of my views on the economy. Surprisingly he actually picked up two books
I mentioned that may be of interest to him and he is reading them. A while back, before the books, I sent him a
link about how the dollar is mathematically going to collapse. Here is the video.
http://www.youtube.com/watch?v=iFDe5kUUyT0 Just cause I thought it summed up the video
well I also sent this video to another friend of mine and the following is his
response just as a testament to how crazy he thought the link was. This is a direct copy/quote by the way…
“DUDE......... is that really
what is going on? How the? What the? Why are we? Bakjdf;adso;fihaoshgoasdnflsjfoaoenflamflkamsdofjaojfmwagmawg!!!!!!
**** saokjgo *****
How in the world did that happen? Is this the result
of going off the gold standard? That video was amazing..... that guy
knows exactly what is going on. I am surprised someone hasn't assassinated him
yet for messing with their system.”
Just to hit it home that the above video is indeed a ponzi scheme the following will be a quote from Bernie Maddoff, greatest ponzi scheme artist in history. Stats on Bernie..."
admitted operator of a Ponzi scheme that is considered to be the largest financial fraud in U.S. history, The amount missing from client accounts, including fabricated gains, was almost$65 billion.[19] The court-appointed trustee estimated actual losses to investors of $18 billion.[18]On June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum allowed."
Now for his quote, "The SEC,looks terrible in this thing. It’s unbelievable, Goldman … no one has any criminal
convictions. The whole new regulatory reform is a joke. The whole government is
a Ponzi scheme.”
So here we have the largest known ponzi scheme operator in the history of the world, who KNOWS ponzi schemes when he sees one, calling the whole government a ponzi scheme. He rightly throws Goldman in there as is seen in the video that they, and their too big to fail comrades, are complicit in running the scheme that will eventually implode.
Back to my new friend.
He watched the video and then picked up these two books,
which I’d highly recommend to anybody interested in learning
more in depth about our current ponzi scheme.
The first one is shorter and covers much of the same material in the
second. I enjoyed the second one
thoroughly because it goes into the history and has many more crazy
stories in it.
My friend has been sharing some of the things he’s read in
the first book and I’ve been able to expound upon some of the things in
there. One of the things I found out
about my friend is that he sells diamonds to people and high quality
watches. He’s even sent me some
things/articles about how the LDS church is also maneuvering for the coming
collapse and doing so by diversifying into productive hard assets. The following link is an example of just
such a thing.
http://www.ksl.com/?sid=27615904
What
had been interesting to see with my new friend is that he would ask me about
prices of silver/gold and where I thought they could go. I’d dutifully tell him where I thought they
might go. The last time he asked me
about it though I responded by saying that I prefer to measure things in terms
of other things and not by the measure of the US dollar, because as the crazy
video showed there will come a day when it literally doesn’t exist anymore as
it is a ponzi scheme. I then asked him
how do you measure the worth of an ounce of gold or silver in dollars, when
dollars won’t be able to buy one ounce of either?
After I’d asked that I went over to talk to him one day and he had built
a spreadsheet measuring silver and gold vs home values and the stock
market. Now that makes more sense to
me. I’ll have to go back and ask him if
he’s found the historical values for those things and see what assets are
overvalued and which are undervalued.
Moral of the story is I (we) should feel free to invest in the ponzi scheme as long as I'm comfortable with potentially losing all the chips I had in on that game. The getting is good when in the scheme because you get great returns. This would be like being invested in the stock market right now or buying stuff at Walmart made in China. Currently it is legit to be invested in the scheme. I err on the side of "beat the rush, panic now".
