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Can you believe a 50 billion dollar
ponzi scheme?
Seems a lot of folks prized their
friendship with Bernard Madoff. He must have been “Uncle Bernie”
to the scores of wealthy investors who trusted him and loved those guaranteed
10 to 12% investment returns. A real picture here of what our economy
has evolved into these past 20 years. Many simply lost their fortunes and
others lost their lives.
“The founder of an investment
fund that lost as much as $1.4 billion in the alleged Bernard Madoff scheme
committed suicide at his Manhattan office, reports say.” “Villehuchet,
65, had lost as much as $1.4 billion invested…”
foxnews.com/story/0,2933,471725,00.html,
12-23-2008
Gee, I didn’t know these kinds
of things could happen any more. Thought we were protected via our government
from any significant potential losses of this caliber. Anyway, that’s
what I’ve been hearing for years. And the suicides are happening to
many who just a few short years ago were worth billions.
“Adolf Merckle, one of Germany's
wealthiest men, committed suicide after his family business empire began
unraveling amid mounting debt, his family said Tuesday.” “…one
of several deaths of businesspeople tied to the global financial
crisis.” “Mr. Merckle's wealth was estimated by Forbes
magazine last year at $9.2 billion.”
online.wsj.com/article/SB123125518158857415.html
Where is the money? Where is the 50
billion “invested” and lost? At least one investor’s firm
had given Uncle Bernie 1.5 billion to trust and invest. Everyone
trusted Bernie. And now these billions are gone forever.
“Tracking down the money
investors entrusted to Madoff is likely to be one of the longest and most
complicated financial investigations on record.”
guardian.co.uk/business, 12-28-2008
Who else has lost huge vast sums of
money? Would you believe 7.5 billion lost by another single firm? Or
545 million lost to a single super rich magnate? Why did these people invest
and entrust 100% of their personal fortunes with a single man?
“Fairfield Greenwich, the
investment firm run by Madoff chum Walter Noel, lost $7.5bn in the fraud
while womenswear magnate and Madoff mentor Carl Shapiro lost $545m of his
personal fortune.” guardian.co.uk/business, 12-28-2008”
guardian.co.uk/business, 12-28-2008
But Alan Greenspan was certainly no
ones fool. He knew that at least by the year 2008 the financial markets would
begin to decay. He also knew his closest friends would be bailed out by the
Federal Government to the tune of multiple billions of dollars so none
of his true and intimate friends and partners would lose a dime. But things
were not so fortunate for so many others lacking the necessary pedigrees.
Where did these wealthy professional
money investors derive the confidence that they simply could not lose their
money? Greenspan went a long way in creating this false confidence. Took Alan
Greenspan many years of suckering the people and leading them down the
piper’s street. Let’s listen to his own words spoken and recorded
in 1998.
“Testimony of Chairman Alan
Greenspan” 7-24-1998, “I am pleased to be here today to present
the Federal Reserve Board's views on the regulation of…” “…the
Board supports a standstill [decline] of attempts by the Commodity Futures
Trading Commission (CFTC) to impose new regulations…”
federalreserve.gov/BOARDDOCS/TESTIMONY
And on 10-23-2008 Greenspan announced
to the world and to all who would listen that he was in “…a state of shocked
disbelief…” Gee, I didn’t do
it. Don’t look at me.
I don’t know. I just cannot believe this extremely intelligent
man to be so ignorant and stupid that he was totally and blindly unaware of
the dangerous crops he was sowing for so many years. But follow the
money. Always follow the money. Many of these banking institutions not only
profited via fees but when their real losses hit the books in the fall of
2008 their losses were made entirely good by the United States Government.
And what about the poor little people?
What about the unfortunate general public who can only count their wealth in
the millions and less? Again and again Greenspan assured folks that the huge financial
markets were just too large and difficult to fail.
And everyone believed these promises. Until
Lehman went bankrupt followed by Bernard Madoff who would lose 50
billion. It seems the bailout rule only applied to a few privileged
souls.
Greenspan, 12-28-2008
“Inappropriate regulation distorts the efficiency of our market system
and as a consequence impedes growth and improvement in standards of
living.”
Well, Greenspan, it seems that the
lack of that “inappropriate regulation” sure guaranteed long term
growth, right? Just look at the prosperity abounding around us because of
your time at the wheel as Federal Governor of the Fed Reserve. I know the US automobile industry must have invited you to every Christmas party. Your friends now are
all just waiting in line to pat you on your back and thank you for your
historical and financial judgmental insight for these past ten years.
Greenspan, 12-28-2008
“…regulation of derivatives… is unnecessary.” “…simply
do not require the customer protections that may be needed by the general
public.” “Banking examiners, for example, find it difficult to
unearth fraud and embezzlement in their early stages.”
Let’s read again part of that
last text right above us.
“Banking examiners, for example,
find it difficult to unearth fraud and embezzlement in their early
stages.”
Make no bones about it. The
scandals of these past many years have been well known for years and years.
“…the SEC began receiving
tips from Madoff’s enemies (rival brokerages, private investigators working
for rival hedge funds, etc.) several years ago. The commission made
inquiries, but took no action.”
Even as far back as 1987 the ground
work was being laid out for the scandal that would rule our financial houses
for the next 20 years. This was no mistake. All this pattern of deceit has
been designed to suck money away from the middle class and make them poorer.
1987 - “then Treasury Secretary
Nicholas F. Brady referred to the clearance and settlement system as the
weakest link in the nation’s financial system…”Gerald
Corrigan, President of the Federal Reserve Bank of New York noted: ‘The
greatest threat to the stability of the financial system as a whole was the
danger of a major default in one of these clearing and settlement systems…”
“Now that our financial system has come to a screeching halt, read
those words for clues as to how much worse things can get…”
deepcapture.com/a-ponzi-scheme-that-is-bigger-than-bernies
Actually, all the booms of the past 20
years have in a sense been nothing more than complicated giant Ponzi schemes.
It seems though that Bernie Madoff is going to become the ultimate poster
child.
“…this episode should be
the final straw which convinces the American public the investment game is
rigged and they do not have a chance.”
opednews.com/articles/2/An-American-Tragedy-by-Jim-Quinn-081216-550.html
And the biggest Ponzi scheme is still
brewing and growing.
“Another American Tragedy is in
the making. A much bigger Ponzi scheme that will shock every person in America is still operating. It is being conducted by the U.S. government and your elected
politician leaders. It is called our National Budget. With most of our
spending on automatic pilot, the aging of the baby boom generation will put
tremendous strain on our economic system in the coming years.”
And where will gold’s ultimate
role come out in all of this?
“I thought gold might reach $600
an ounce. It reached $1,000 an ounce and is poised to go much higher.”
My favorite personal Greenspan quote
is the beauty right below.
[Hedge Funds] …are essentially
free of government regulation, and I hope they will remain so. Why do we wish
to inhibit the pollinating bees of Wall Street?”
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We’ve just completed an article
recommending six gold stocks whose prices have been driven to a ridiculous
low. These are quality mining companies with the gold in the ground. And
their market cap is less than their cash in the bank? Buy! These are
the type of companies to acquire that have the potential to make a lot of
money as the precious metals market turns around.
Inflation is coming.
Massive. It’s inevitable. And
inflation is the best scenario for higher gold prices. Speculate only what
you can afford to lose. Gold is still going to be around even after all this
economic mess settles down a bit in twenty years. Gold mining stocks are at
the bottom of a life time opportunity. Be brave. Buy low. Sell higher.
David Vaughn
Editor,
Gold Letter, Inc.
www.goldletterdv.com
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