Tuesday 5 May 2009

Lights are on



Mr Dan Roberts, a very respected British financial journalist, published a presentation: "The global financial pyramid scheme explained".

On one of the slides he observed: An unstable pyramid? Viewed from the bottom up, the explosion in debt and assets prices that occurred during the boom years looks unstable and top-heavy. It even bears similarity to the pyramid, or ‘Ponzi’, schemes carried out by fund managers like Bernard Madoff.”

Well spotted. If it walks like a duck, quacks like a duck, looks like a duck, it must be a duck. Indeed the current crisis is a result of a classic criminal financial pyramid scheme akin to the ones created by Albanian gangsters in 1996 - 1997.

It is very disappointing that, apart from rare exceptions on a pretty rudimentary, descriptive level, mainstream financial analysts, economists and journalists do not look at the current crisis as a pyramid scheme. Is it a sign of their substandard aptitude and intelect? Or is it an orchestrated, not too sophisticated, action designed to cover up criminal activities and protect the pyramid's beneficiaries? Establishment protecting establishment maybe?

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