Ponzi Scheme Examples: The US Treasury Dept Is A Perfect Example
Ponzi Scheme Examples: The US Treasury Dept Is A Perfect Example

Ponzi Scheme Examples: The US Treasury Dept Is A Perfect Example

Ponzi Scheme Examples

Ponzi Scheme Examples

The Daily Treasury Statement that was released Wednesday afternoon as Americans were preparing to celebrate Thanksgiving revealed that the U.S. Treasury has been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government.

During those eight weeks, Treasury took in $341,591,000,000 in revenues. That was a record for the period between Oct. 1 and Nov. 25. But that record $341,591,000,000 in revenues was not enough to finance ongoing government spending let alone pay off old debt that matured.

The only way the Treasury could handle the $942,103,000,000 in old debt that matured during the period plus finance the new deficit spending the government engaged in was to roll over the old debt into new debt and issue enough additional new debt to cover the new deficit spending.

This mode of financing the federal government resembles what the Securities and Exchange Commission calls a Ponzi scheme. “A Ponzi scheme,” says the Securities and Exchange Commission, “is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors,” says the Securities and Exchange Commission.

With little or no legitimate earnings, the schemes require a consistent flow of money from new investors to continue,” explains the SEC. “Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.”

 The Ponzi nature of the Treasury Dept

In testimony before the Senate Finance Committee in October 2013, Lew explained why he wanted the Congress to agree to increase the federal debt limit—and why the Treasury has no choice but to constantly issue new debt.

Every week we roll over approximately $100 billion in U.S. bills,” Lew told the committee. “If U.S. bondholders decided that they wanted to be repaid rather than continuing to roll over their investments, we could unexpectedly dissipate our entire cash balance.”

“There is no plan other than raising the debt limit that permits us to meet all of our obligations,” Lew said.

“Let me remind everyone,” Lew said, “principal on the debt is not something we pay out of our cash flow of revenues. Principal on the debt is something that is a function of the markets rolling over.” Full Story

And there you have it, the full truth nothing but the truth.  Sometimes, the truth does appear, though it’s buried in the story.   One day people will wake up and ask this one important question. Why in the hell are we going to lend you more money? You are bald, broke, fat, and ugly and there is no way in hell you are going to be able to pay this debt back.  The answer to that question will trigger an avalanche and the mighty dollar will start to burn.

More Ponzi Scheme Examples

“Is it all just a Ponzi scheme?” screams the headlines. The crux of the matter is U.S. Treasury debt, and who the f*ck is going to buy it all, as the printing presses run over time. But a Ponzi scheme? Sure, why not. Ponzi schemes seem to be doing well in a made-up world of overleveraged hedge funds, unlimited federal money-printing, 0% interest rates, a somnolent SEC, corrupt politicians, and somewhat naive and shellshocked general investment public. Bring it! Sprott points out that in May/June it estimated that $2 billion in new debt needed to be issued in 2009 to bring in enough money to cover the massive holes in the finances of the United States government.

Many people expected that with huge amounts of new Treasury bond supply coming on, things would tank. But wait, nothing happened! yields flitted to and fro, but there wasn’t the much-anticipated massive collapse in Treasury demand. Folks actually bought the stuff. Yes but… wasn’t the federal government buying a lot of its own debt … a.k.a. Quantitative Easing (QE), a clever central-banker term for money-printing? According to Sprott, there were three main groups that bought $1.885 trillion dollars in fiscal 2009. These groups included: Full Story

Ponzi Scheme Examples 2019

Take the latest developments with Woodbridge Group of Companies, a real estate investment firm that has been implicated, along with its former owner and related companies, for bilking 8,400 retail investors, many of whom were older Americans, through a $1.2 billion so-called Ponzi scheme. In a Ponzi scheme, money from one set of investors is used to pay off other, earlier investors, or is used for the perpetrators’ personal gain.

The Securities and Exchange Commission on Monday said it has ordered Woodbridge and its former owner and CEO, Robert H. Shapiro, to pay $1 billion in penalties and repayments. The regulator first filed an emergency action against the company in December 2017.

One of the most infamous Ponzi schemes is that of Bernard Madoff, who is serving a 150-year prison sentence in connection with a record $65 billion decades-long scam for which he was arrested in 2008.

You may think you can easily spot a fraudster. But chances are, you are vulnerable to getting duped.

“The frightening truth about fraud is scammers scam and liars lie,” said Gerri Walsh, senior vice president of investor education at the Financial Industry Regulatory Authority, or FINRA, which regulates brokerage firms. Full Story

 

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Ponzi scheme examples; Rob the poor to feed the rich