June 7, 2012

Is Global Finance a Ponzi Scheme? MMM-2012

Is Global Finance a Ponzi Scheme? MMM-2012.
 
Bloomberg references Sergei Mavrodi, a Russian Ponzi expert. 
Last year, he announced the new project, MMM-2011, by stating boldly that it would be another Ponzi scheme. “Even if you strictly follow all instructions, you can still lose," he wrote on a website describing the project. "Your 'winnings' may be withheld without any explanation or reason whatsoever.” Depositors would be paid solely from funds invested by other depositors. There would be no attempt to generate income in any other way. This, he said, was perfectly all right, and no different than the way some of the largest institutions in global finance operated, from the Russian pension fund to the U.S. Federal Reserve.

And, 
The U.S. is paying back its bondholders with money freshly printed by the Fed. Greece is paying back investors with money the European Union has borrowed from other investors -- or maybe some of the same investors -- via its bailout funds. The developed world's central banks have printed the equivalent of trillions of dollars in new money to keep their financial systems and economies afloat.

What happened then? 
MMM-2011 halted payments on May 31. “Unfortunately, I have to admit that a panic has started within the System,” Mavrodi wrote, blaming the media for spreading malicious rumors. “This is a pyramid! If everyone rushes to withdraw the money, there is no way there will be enough money for everybody. In fact, it would be the same with any bank.”

Undaunted, Mavrodi launched a new pyramid, MMM-2012, saying that it would be used to prop up MMM-2011. “Don't worry, don't be nervous, we will fix everything, and you'll get paid in full,” Mavrodi wrote, adding immediately: “This is not a promise, just a feeling I have.”

On and on …


Tags: PyraMMMid, mmm-2011, mmm-2012, global finance ponzi, Sergei Mavrodi