The developed world’s Ponzi scheme is caused by record-high levels of public and private debt. As Boston Consulting Group notes, it is. “The developed world’s Ponzi scheme is caused by record-high levels of public and private debt. And it is exacerbated BCG: Ending the Era of Ponzi Finance. Ending the Era of Ponzi Finance Stelter of the Boston Consulting Group that examines the magnitude of the challenge facing the The greater the weight of speculative and Ponzi finance, the smaller the overall margins of.

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Inan Italian immigrant to the U. The Endjng report is constrained to examine “what went wrong”, and cites the work of economist Robert Gordon Northwestern University, USA who has repeatedly argued that starting as early as the period, real economic growth and real wealth have trended downwards, for a large number of convergent reasons. Private companies that provide fixed-benefit pensions are also confronting significant underfunding of their pension promises.

Not sure how this happens, but the entire developed world is in debt.

Well, what happens when you have fewer younger people than older people? It is in the nature of Ponzi schemes to collapse suddenly, without warning. In the case of the U.

The Ponzi answer is what we live, or survive every day: McKinsey report Debt and De-leveraging: A precondition to addressing the fallout of the unsustainable policies of recent decades is a fast cleanup of the debt overhang.

But instead of investing the money to buy the coupons and exchange them for stamps, he simply used the money of later investors to pay thf returns to earlier investors, extracting huge profits along the way.

No one knows what event may send the developed world and the global economy as a fo back into crisis. Therefore, these countries also need to become far more open and attractive to immigrants. In recent decades, however, the vast majority of debt has not been used to increase future income but to consume, to speculate in stocks and real estate, and to pay the interest on previous debt.


CommentaryMarket Update. In other words, every retiree will need to be supported by fewer than two fully employed people. The report rightly says that finahce welfare and pension crisis” in all developed countries, is deadly for the economy as we know it. People are living longer which is good news, but ginance will this all be paid for?

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The financial operators running the scheme are the private banks. Higher costs will lead to more global disputes over resources and fewer financial resources to pay down debt. Asian countries regularly surpass teh nations in educational results. All countries will try to increase their exports; all will try to attract the best-educated immigrants; and all will try to secure scarce resources, from water to oil to commodities.

Ponzi Finance – Ponzi Wealth :: The Market Oracle ::

The financial implications of this growing welfare burden are dramatic. Finanve the private market is off-limits to them, they rely on the ECB to bail them out. Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. As he puts it: Basically of course, no productive investments were made by either of these renowned criminals: This trend is not endkng to the developed world. The biggest, however, is still ongoing: Federal Reserve — Conspiracy Or Not?

Like any good monetaristI believe the increase in money supply and competition for resources will drive up rates longer-term. Such frauds have been known as Ponzi schemes ever since. Consistent increases in productivity have made possible the economic transformation of the developed world over the past years and of emerging markets today.

Prepare for labor scarcity. Perhaps the most direct statement in the BCG report:.

Ending the Era of Ponzi Finance

Can you image if your personal debt was 4x what your gross income was? Countries need to start now to prepare for the coming era of labor scarcity. In a provocative paper, the renowned growth researcher Robert Gordon, of Northwestern University, makes a compelling case that growth in GDP per capita has been slowing since the middle of the twentieth century.


Meanwhile, private households have finahce too long on rising home-asset prices and the promises of politicians and corporate managers instead of finaance aside dedicated funds for retirement. All stakeholders will have to make sacrifices. He attracted investors by promising extraordinarily high returns—50 percent within 45 days.

The era Italian immigrant to the US named Carlo Ponzi created the scheme the world remembers, like the bigger and better scheme of Bernie Madoff which foundered in Then lays out ten steps to any solution for developed economies How critical tradeoffs are managed will vary from country to country.

For the government-and-bank Ponzi scheme of the developed nations, today, the BCG report states that actual and real, continually accruing but well-hidden debts of governments are increasing.

I do so deliberately to emphasize the scope and seriousness of the problem.

Such companies will have to fund the gap out of current cash flow, cut their liabilities by offering diminished lump-sum buyouts as GM and Ford have recently done —or partially renege on their promises, as the public sector will inevitably do. This subject is usually and wilfully confused endong what percentage of GDP passes through state or state-related entities, called Eding Spending, and what amount stays private from start to finish.

Uneven Progress on the Path 1. Given the importance of the quality of capital stock to productivity and economic growth, it is time to reverse this trend. There is, of course, nothing wrong with taking on debt, as long as that debt is invested to create additional economic growth.