Comments on: Madoff and Ponzi Finance

By: ann

ann — Fri, 09 Jan 2009 22:43:17 +0000

Ken, so chuffed you read RWEO! Thanks for this comment. Ann

Ken MacIntyre — Fri, 09 Jan 2009 14:02:49 +0000

First of all, it was RWEO which opened up my understanding of the financial system and how it works and I still have the book.

As to state pensions being a Ponzi scheme, this was one of Milton Friedman’s jibes. But a contract between the generations which depends upon

transfers via taxation is not automatically a form of Ponzi finance. You can say the same thing about ‘funded’ pensions. A pension fund does not

exist, it is merely a charge on future output.

I like Edward Chancellor’s definition of Ponzi finance, in ‘Devil Take The Hindmost’(a

history of financial crashes):’paying interest out of capital’. So long as income to the retired is not at the expense of future capital needs –

upon which future pensions depend – it is not an issue.

Unfortunately the entire British economy has been operated as one giant Ponzi fraud

for decades; a shameful betrayal of the British people for and on behalf of the most ruthless and rapacious ruling class in modern times; the

Anglo-American financial and banking elite.

Patrick Vincent — Tue, 16 Dec 2008 19:12:37 +0000

“a form of finance in which new liabilities are used to finance existing liabilities” – doesn’t that make the UK state pension scheme

a Ponzi scheme?

MIchael Driscoll — Thu, 01 Jan 1970 00:00:00 +0000

I am alive and well Ann….i managed to leave Bear Stearns in May 2007 before the place came apart. Better to be lucky than smart. I

remember those comments on HFs very well and stand by them!