Great Depression Online Archive Issue:

Charles Ponzi Day

Great Depression Online
Long Beach, CA
March 04, 2008

Inside This Issue You Will Discover…

*** Charles Ponzi Day
*** The Greatest Ponzi Scheme of All
*** Entitlements and Perpetual Inflation
*** And More

Charles Ponzi Day

Yesterday was Charles Ponzi Day.  Bet you didn’t know that. 

We’ll admit.  We didn’t either…until an attentive reader – Harry T. from Tucson, AZ – alerted us of this obscure factoid.  So, to confirm, we did a Google search and came across the following from a website linked to the Montana State Auditors Office…

“Montana State Auditor John Morrison today warned Montanans to beware of Ponzi-style investment schemes used by many con artists to swindle everyday Montanans out of their hard-earned savings.  March 3, unofficially known as Charlie Ponzi Day, marks the birthday of the swindler born in 1882 who contrived the scam.”

If you’re not familiar with Charles Ponzi or the scheme his name’s synonymous with, we’ll quickly fill you in…

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Charles Ponzi gained notoriety in 1920 when he hatched a ploy offering 50 percent return on investment in 45 days, or a 100 percent return in 90 days.

Unknown to investors, the returns were paid by the money of subsequent investors.

When incoming money could not keep up with payment of returns, the show was over.  But not before over 17 thousand people had been taken for over $10 million.

The Greatest Ponzi Scheme of All

Harry T. also offered some sharp insights that we’ll share with you…

“FDR receives sympathetic accolades for creating Socialist Insecurity [sic], but Mr. Ponzi doesn’t get the proper recognition for providing the blueprint.

“The double standards are interesting, in that Mr. Ponzi was put out of business and jailed sometime in the 1920’s, and a decade later FDR created his new and improved Ponzi scheme, Socialist Insecurity, and to assure it’s continuance, made it mandatory for millions of working Americans.

“Not to minimize their losses, but if thousands of investors lost money in Mr. Ponzi’s scheme, it was small change compared to the tens of thousands of FICA payers who have lost their hard-earned pay to the government, if they didn’t live to collect any Socialist Insecurity benefits, or had no eligible survivors.

“Mr. Ponzi would be proud that his namesake scheme is alive and well, and deserves kudos on his day, March 3rd.”

Harry T.
Socialist Insecurity retiree
Tucson, AZ

Thanks, Harry.  We’ll also add that those who live to receive their Social Security benefits get swindled too.

Entitlements and Perpetual Inflation

The simple fact is that the government has promised more entitlements than it can possibly pay.  Even the Social Security Ponzi Scheme will not be able to keep up with the forthcoming flood of payments that will be owed to the now cresting tidal wave of retiring baby boomers.

So how will they fill the gap?

We’ll let Federal Reserve Chairman Ben Bernanke tell you how.  Quoting from a speech he gave on November 21, 2002…

“The U.S. Government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

That’s how.  They’ll just print dollars at “…essentially no cost.”  But while it may be essentially no cost to the government, we know there’s a cost.  It’s called inflation.

And here’s how it will be accounted for.

Social Security payments will be made.  Checks will be sent out for the amount owed that each individual is entitled to.  Yet the money will only be worth a small fraction of what it was when the payee had it confiscated from their check.  Not a very good deal if that’s what you’re depending on to fund your retirement.

The mass realization by millions of retirees that their Social Security payments are not worth what they counted on shall be painful.

Sincerely,

M.N. Gordon
Great Depression Online

P.S.  Ponzi schemes are alive and well.  And your government’s the greatest offender.  Overcome the ravages of inflation by investing in the “Income Security of the Month” for March 2008.  Discover what fund has paid an average dividend of 24.5% per year over the past five years while posting total returns of +295.8% over this same time at: “Income Security of the Month” for March 2008.

P.P.S.  What are your best investment strategies for surmounting the mammoth inflation mountain?  Drop us a line at info@directexpressions.com and let us know.

 

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