To be in denial is to live in delusion. Only if we wake up and
accept the reality of our condition can we hope find a remedy to
our maladies with the international economy.
Sparing the technical jargon and political correctness so as all
may easily understand reality and the state of the world
economy, here goes:-
A hundred years ago, a conman named Ponzi hit on a get rich
quick scheme. He made A,B and C give him money, promising them
capital + high interest within months instead of years. Within
days, many heard of his offer and rush to 'invest' in this
financial guru, more so when he paid out what was promised.
What he did was simply to use X, Y, Z's money to pay A, B and C.
As long as there were 'investors', he could pay.
But when no one else was forthcomming, as suspicion grew, he
could not pay off X, Y, Z, and fled. Thousands of late entrants X,Y
and Zs lost their money to this conmen using what is more commonly
known as the Pyramid scheme or Ponzi Scheme.
And what is now known as Capitalism is nothing more than a
variation of this scheme. Regulators may claim that now, a
product is made and changed hands for money or revenue, a
value in the transaction process, makes business enterprise NOT a
pyramid scheme where people pay for nothing.
But the fact is that each and every factory product made has a
MARKED UP. Eg, a product costing $1 to create is sold at $5. While
a product changes hand, a value created, the value is inflated to
pay everyone in the biz 'pyramid' - CEOs getting fat cheques to the
tea lady getting money for a cup of coffee - eat no
fill, hungry but wont die (hokkien saying).
Consumers - the new entrants to the pyramid game, once again the
suckers.
Even with competition, there still is a MARKED UP - $4 or $3 on
a similar product. The only time when there is no mark up is when
the competitor realizes it aint worth to create such products to
play the Ponzi game.
Economists, Financial wizards, Hedge Fund operators, nobel
economics peace prize laureates, etc may differ and claim all kinds
of terms, variations, models, etc to confuse, confound and CON the
masses, but the awful truth is that our world economy is thus
nothing more than a giant approved Ponzi Scheme!
Many know the awful truth, even the media, but dare not mention
it for it is taboo, and will only reflect badly on themselves,
participants of it, by the more clueless masses, as the Ponzi
scheme was reviled and casted down as a fraud by simple minded
generations.
But there is a good side to the Ponzi scheme when regulated. It
creates jobs and wealth for individuals, so long as there are
1.new entrants into the scheme - population growth
2. Raw resources to create needed products, and backed by money
printed for its market value - Earth has not shown it is devoid of
resources yet.
3. Clueless consumers continue to work, to pay for such goods.
Despite hiccups ( recessions), this scheme had not stop for
decades as consumers recovered and SPEND .From the doctor to the
road sweeper, everyone had been a part of the Ponzi scheme, and
still is, whether you like it or not.
The alternative is to adopt communism, and let a central
authority, made up of equally flawed human beings, dictate the
economy and economic order, where historical facts only showed that
it caused long bread queues, offensive wars and famines rather than
individual wealth.
It is only by accepting the fact that we are flawed humans,
sparing each other the dogma of good vs bad conflicts, and
accepting we are all players in this reviled 'fraudalent' Ponzi
game, rely heavily more on risk management and a prayer -
then and only then can we find the solution for this current
economic mess created by a group of pyramid leaders who had more
money than the know-how to use it, and choose to stupidly
give it away instead, causing that particular pyramid to collapse
and afftected the confidence of every pyramid player on the
planet.
Solution:-
1. Population is still
growing
2. Earth still has resources
3. Consumers still have money but hoarded up.
= SPEND, espacially by the rich and game on till 1 or 2 or
both stops. Probably another million years?
Stop spending now, and the entire structure built up over
decades will collapse over your heads. A pyramid scheme, or some
call it MLM, collapses when they are no new entrants or new
products to the game, and the ones who suffer the most and lose the
most money are those new entrants - YOU.
Some may go back to living on vegetables, rice and eggs, but
many will have no acess to agricultural land. Barbarism wil ensue.
Who will be the strongest man to survive and be the last man on
Earth?
May our next generation be left with a better, fairer and free
democratic system, and not another variation of the Ponzi scheme,
if it can be found....
This was written well before the Madoff scandal broke. For those
who support Germany's Frau Nien's stand of not spending, be
prepared for failed states in the EU.