Trichet’s Ponzi scheme
Posted by Ivo Cerckel on December 15th, 2008
Bernard Madoff , the former Nasdaq chairman who was arrested last week for allegedly running the biggest USA dollar Ponzi scheme of all time, immediately admitted to prosecutors that his was a Ponzi scheme. (1)
Jean-Claude Trichet, president of the European Central bank, does not.
Trichet only mumbles about the need for reflection on the fragility, not only of global finance but of the global economy itself. (2)
Granted, if Trichet is prepared to question unbacked paper money, then he is not intellectually dishonest.
The Ponzi scheme began with a vengeance on 15 August 1971, when USA president Richard Nixon ended the remnants of the gold standard, and unleashed entirely discretionary monetary policy on the world. (3)
Ivo Cerckel
Siquijor, 15 December 2008
NOTES
(1)
HSBC joins victims of Madoff’s alleged fraud
By Francesco Guerrera and Henny Sender in New York and Victor Mallet in Madrid
Published: December 14 2008 23:24 | Last updated: December 14 2008 23:24
http://www.ft.com/cms/s/0/5446156e-ca1f-11dd-93e5-000077b07658.html
SNIP
Prosecutors alleged that he said his operations were “just one big lie” and “basically a giant Ponzi scheme” – a structure where investment managers pay old investors with money raised from new investors to cover their losses.
(2)
Trichet warns on fiscal indiscipline
By Ralph Atkins and Lionel Barber in Frankfurt
Published: December 14 2008 23:31 | Last updated: December 14 2008 23:31
http://www.ft.com/cms/s/0/83c0905c-ca16-11dd-93e5-000077b07658.html
SNIP
Mr Trichet argues that the global financial market crisis has posed a serious threat to industrialised economies. “We cannot afford in future to put the concept of the market economy at risk as we did . . . The fragility, not only of global finance but of the global economy itself, is something that we should reflect on.”
(3)
December 13, 2008
The Age of Madoff
Posted by Lew Rockwell at December 13, 2008 01:36 PM
http://www.lewrockwell.com/blog/lewrw/archives/024400.html
No related posts.
December 15th, 2008 at 09:25
still no sign/explanation what the Madoff Ponzi fraud was
SEC failed to inspect Bernard Madoff fund
US regulators never inspected the hedge fund run by Bernard Madoff – that is now at the centre of an alleged $50bn (£33bn) investment scam.
By Richard Fletcher, Executive Editor
Last Updated: 9:03PM GMT 14 Dec 2008
http://www.telegraph.co.uk/finance/globalbusiness/3759822/SEC-failed-to-inspect-Bernard-Madoff-fund.html
SNIP
“It is astonishing that this apparent fraud seems to have been continuing for so long, possibly for decades. The allegations appear to point to a systemic failure of the regulatory and securities markets regime in the US,” she told The Sunday Telegraph.
December 15th, 2008 at 10:08
Trichet could perhaps reflect on how sovereigns, who can print money out of thin air, can default.
By the way, Mon Cher Jean-Claude, how can there be a credit crisis when fractional-reserve banking allows banks also to create money out of thin air?
Ecuador default: Fears grow that others will follow
Bond traders in Latin America are braced for stormy week after Ecuador became the first country – apart from the Seychelles – to default on its sovereign debt since the global crisis began.
By Ambrose Evans-Pritchard
Last Updated: 10:46PM GMT 14 Dec 2008
http://www.telegraph.co.uk/finance/globalbusiness/3759173/Ecuador-default-Fears-grow-that-others-will-follow.html