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Globalization as a Ponzi scheme?


Global Economy of Truth as a Ponzi Scheme (Part #3)


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Is globalization some form of Ponzi scheme -- perhaps also to be understood as a pyramid selling scheme? The latter image would offer the strange irony of replicating the central focus of deprecated civilizations of the past -- curiously echoed by its use on the dollar bill. The concern here is where the distinction has been made and proven in systemic terms. Where is the proof that the global economy is not a massive Ponzi scheme? For whom would such proof be credible?

Is the avoidance of such clarification of a similar nature to that with respect to the cultivation of systemic ignorance with regard to similarities in the dependence on oil and on drugs (whether prescribed or proscribed) -- more generally understood as "substance abuse"?

Indications with respect to the global economy that such distinctions merit careful clarification are evident in the argument of various commentators and bloggers:

The numbers that you are about to see are likely to shock you. They prove that the global financial Ponzi scheme is far more extensive than most people would ever dare to imagine. As you will see below, the total amount of debt in the world is now more than three times greater than global GDP. In other words, you could take every single good and service produced on the entire planet this year, next year and the year after that and it still would not be enough to pay off all the debt. But even that number pales in comparison to the exposure that big global banks have to derivatives contracts. It is hard to put into words how reckless they have been.

The globalized economy is a colossal Ponzi Scheme in which the vast majority survive on the bread crumbs falling off the table. The possibility of 7 billion people achieving a consumption-oriented lifestyle is zero, so the World Bank conveniently set the poverty line at $1.25/day to legalize global slavery. As long as someone else's children are doing the suffering, it's "all good". Post-2008, this illusion was extended merely by plundering all future generations.

  • Ponzi Schemes:

    The really worrying thing is that we in the developed world seem to be totally oblivious to the fundamental limits to growth in production..., even though these factors have been gradually growing right under our noses for the past three decades or so. Instead of making the fundamentally enforced changes, we have chosen to keep this inherently unsustainable system going by raking in more and more consumption from the future, primarily through totally unsustainable levels of debt....

    The one and only reason why we have been able to keep this up to this day is because the vast majority of us participating in this mother of all Ponzi schemes have not yet identified this fraudulent system for what it is.

  • When The Global Ponzi Scheme Is Exposed There Is Going To Be A Massive Panic (King World News, 3 May 2016)

  • Daniel Stelter: Ending the Era of Ponzi Finance: ten steps developed economies must take (Boston Consulting Group, January 2013)

  • Michael Hudson and Chris Hedges: The Great Ponzi Scheme of the Global Economy (CounterPunch, 25 March 2016)
  • Joe Romm: Is the global economy a Ponzi scheme? (ThinkProgress, 8 March 2009):

    Yes, homo "sapiens" sapiens have constructed the grandest of Ponzi schemes, whereby current generations have figured out how to live off the wealth of future generations. Yes, we are all in essence Madoffs (many wittingly, most not) or at least his most credulous clients.

Especially eloquent in this respect is Tim Lee (Pi Economics):

  • The financial system as a whole has had the characteristics of a Ponzi scheme if we look at it fundamentally. By this I mean that we should think about the true value of assets as being derived from the future flow of goods and services that the assets can lay claim to or produce. If market prices of financial and real estate assets rise a lot but there is no increase in the ability of the economy to provide goods and services in the future, then the apparent increase in wealth is illusory. (as cited by Saftjan, The New York Times, 1 January 2009)

  • Intelligent observers will worry about the inflationary consequences and also moral hazard, in that any incentive for the governments of troubled economies to get their respective houses in order is then removed. Unfortunately, the longer-term consequences would be likely to be much worse than this. It is becoming ever more obvious that, in a fiat money regime, the merging of monetary and fiscal policies together with a commitment by governments to support banks, and central banks to support financial markets, results in the whole financial system becoming the equivalent of a giant Ponzi scheme.... In this "system", the central bank implementing more quantitative easing is no different, in economic terms, from Bernie Madoff marking up his client accounts every month. (Circular commitments lead to a Ponzi economy, Finanical Times, 1 November 2011)

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