Thursday, Jan 08, 2009
Bill Gross "entire US economy has been structured like a Ponzi scheme for decades"
Citywire: Entire US economy is a Ponzi scheme
Bill Gross, the founder of the world's largest bond fund manager Pimco, thinks Bernard Madoff is poised to become the fall guy for a whole generation. But the reality, he says, is that Wall Street and the US as a whole are full of 'culpable lookalikes.' In his latest letter to investors published on the Pimco website, Gross says he believes the entire US economy has been structured like a Ponzi scheme for decades and there are many more people to blame than a single fallen hedge fund manager.
Posted by jack c @ 03:28 PM (687 views) Add Comment
6 Comments
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1. sold 2 rent 1 said...
The entire debt-based monetary system is a ponzi scheme - a 300 year one.
2. greytornado said...
I have a slightly different take on the time frame - I would say that the current experiment which has produced what is effectively a giant ponzi scheme has lasted for a little over 37 years to be precise...........................And it is now failing. The whole edifice is collapsing, just like a house of cards. Nothing can stop it collapsing, for the simple reason that the whole experiment was flawed and doomed to failure from day one. Believe me, I am not looking forward to living through the next two or three years.
All things eventually end, however bad and when the time comes, the world will never again want to see anything like the Great Depression of 2008-2011 ever again. It won't be a return to a gold standard, because there isn't enough physical gold to do this; but I believe that the future stable currencies will be linked to the VALUE of gold. Those people who invested in physical gold will not only have survived with their savings intact, but will probably make a killing, because the price of gold could well increase by a factor of anything up to a multiplication of 10, based on current values.
Nearly all the gold will in fact end up with the central banks, because the massive profit to be made on individual holdings will be a good incentive to sell. I realise that my views may be regarded by some as extreme, all I will say is that time will tell.
3. jack c said...
I bet 99.99% of UK civil servants dont realise that they are in a Ponzi pension scheme
4. northern bear said...
Good comments greytornado. I agree with your forecasts.
5. Hal said...
Yep, much of the way we are operating does in fact look like a ponzi scheme. I just watched this video on BNN where Peter Schiff even brings that up: http://watch.bnn.ca/#clip127416
I agree with greytornado re: the next 2 to 3 years. It does indeed bother me and trouble me. I've been watching gold and silver closely for a number month using the widget ExactPrice http://www.learcapital.com/exactprice and I don't know if I think gold will go as high as greytornado forecasts but I definitely think that in 2009 we will see a spot price well over 1,000. With all this bailout spending I expect the monster inflation will be biting in the fall if not before.
6. First Time Buyer said...
I realised this years ago. Credit is not bad in itself. It can help finance productive investments such as a plant to make cars or the purchase of the car itself. What is bad is asset based finance since it is in essence not based on cash flows but on an asset value that is a matter of interpretation and therefore manipulation.