Bernard Madoff Bio – Where is a good, easy to follow biography on Bernard Madoff?
Where is a good, easy to follow biography on Bernard Madoff?
Something From Nothing: My Madoff Fantasy
Panning For Gold To Pay For Social (in)security
Everyone knows by now about the most famous Ponzi scheme in history (yet exposed and understood). It was perpetrated by one Bernard Madoff. Madoff outdid his predecessor Charles Ponzi, the “father” of the scam. Old Bernie made off with some $50 billion in funds of unsuspecting investors. The scheme was allowed to perpetuate by the SEC, by either overlooking tips or coming up with nothing after his investments being examined several times over 16 years. There are far larger Ponzis that have yet to be brought down. This most recent example of a Ponzi Scheme is one in which many investors have and will continue to be effected by, but represents only an inkling of the vast number of people who will be affected by “The Big One.”
Ponzi schemes come in different shapes and sizes and in different varieties. But remember, if it walks like a duck, waddles like a duck, quacks like a duck, and looks like a duck, it is indeed a duck. Fortune favors the informed and the few.
Warning: in witnessing the Bernie Madoff phenomenon, you have seen a microeconomic event, the likes of which is symptomatic of a much larger disease in the macroeconomic environment. This disease is a cancer in stage 4. It has been festering since 1937. You have effectively viewed a hologram. When you cut into this malignancy, the sample slice betrays the whole mass. And when further surgery is performed to eradicate, it is found to be a self-replicating Gremlin.
Social Security is one such macroeconomic Ponzi Scheme. This duck is a payout to early investors the money of newer contributing investors. Most Gen Xers and younger have little confidence that they will see any of the Social Security funds they have dutifully contributed during their working lives. A Ponzi fails when the flow of new investors is cut off by exposure or is not enough to sustain the earlier contributors in the scheme. Statistics show that beginning in 2011, nearly 11,000 Baby Boomers will turn 65 every single day. The early retirees have already begun their exits from the workforce. The balance of new investors to earlier investors is being tipped in the direction of the early investors. There will soon be a large and obvious discrepancy, with new investors (present labor force) not paying in enough funds to support th1000e early investors (retired workers).
The payouts of Social Security benefits will not come to an abrupt halt once the balance of old vs. new is upset. There will be no line drawn in the sand to distinguish who will and who will not get benefits. That would no be politically expedient. The trend has already been set. In the Fed’s recent announcement (March 18, 2009) of monetizing U.S. public debt, it has signaled its intent to inflate or die. Bernanke, a student of the Great Depression, is making good on his promise and his understanding that the printing press can intervene to avoid a deflation. In the minds of most Americans it will be much more acceptable to be paid (Social Security benefits) as promised. Future consequences will be just another oversight, just as happened with sub prime mortgages. The mindset will be: “So long as I get what’s coming to me.” So this is the course that will be followed. A massive depreciation of the currency, the scope of which can not be presently appreciated, will ensue. Monetization of this and other unfunded liabilities will contribute to hyperinflation. Presently Zimbabwe is facing this predicament of hyperinflation. The country men are panning for gold to buy bread. An attitude of “it can’t happen here” may have you out panning in the not-too-distant future. This is not what was intended in referencing your retirement as the “golden years.” Face the facts, and prudently acquire gold and gold stocks to secure your future from social “in”security.
By: Patrick Gunther
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