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The 10-Step Plan To End The Era Of Ponzi Finance

Tyler Durden's picture


The developed world’s Ponzi scheme is caused by record-high levels of public and private debt. As Boston Consulting Group notes, it is exacerbated by huge unfunded liabilities that will be impossible to pay off owing to long-term changes in developed-world demographics. Addressing these challenges at any time would be difficult. To make matters even worse, however, BCG points out that they come at a moment when the developed world’s traditional model of economic growth appears to be broken. This is partly a consequence of the Ponzi scheme itself. The underlying issues cannot be ignored any longer. The developed world faces a day of reckoning. It is time to act. In this excellent layman's guide to the the real world, not only does BCG explain the Ponzi, but they lay out ten critical steps that developed economies must take to definitively end the era of Ponzi finance. Some are sacrifices required of various stakeholders. Others are new social investments, both public and private, that are needed in order to return to a sustainable growth path.


The paper starts with the Origins of the Ponzi Scheme we call modern economies...

goes on to discuss the Broken Growth Formula...



Then lays out ten steps to any solution for developed economies...

Via Boston Consulting Group:

1. Deal with the debt overhang - immediately. A precondition to addressing the fallout of the unsustainable policies of recent decades is a fast cleanup of the debt overhang. In previous papers, my colleagues and I have discussed the various options for doing so.35 Put simply, some combination of writeoffs and restructuring, austerity, higher taxes, and sizable inflation will be necessary.


2. Reduce unfunded liabilities. Once debt restructuring is under way and the broader public sees that wealthy owners of financial assets are contributing to the necessary cleanup, it should be easier for politicians to take another painful step: addressing openly and directly the trillions in unfunded liabilities that are weighing down budgets and balance sheets across the developed world. It will require a combination of several measures to bring these unfunded liabilities under control.


3. Increase the efficiency of government. Parallel to reductions in government spending on social-welfare benefits, another key to reducing government’s share of GDP and increasing economic growth is to make government itself more efficient. A smaller government sector does not necessarily mean a weaker government. By defining the right “rules of the road” for society and business, governments can set the tone and priorities for development in a more effective as well as a more efficient way.


4. Prepare for labor scarcity. Countries need to start now to prepare for the coming era of labor scarcity. Doing so will require a series of initiatives to reduce the decline of the workforce.


5. Develop smart immigration policy. Even if developed countries take all these steps, it will still not be enough to reverse demographic trends. Therefore, these countries also need to become far more open and attractive to immigrants.


6. Invest in education. Education has to play a significant role in the future growth potential of the developed economies. Quality education will be the decisive factor in protecting and increasing GDP per capita. It is also the foundation of social mobility and a precondition to fully utilizing the innovative capabilities and entrepreneurial talent of a society’s members. For both reasons, it needs to be another key target of social investment.


7. Reinvest in the asset base. For more than a decade, the developed economies have reduced investments in public infrastructure and productive assets. Given the importance of the quality of capital stock to productivity and economic growth, it is time to reverse this trend.


8. Increase raw-material efficiency. The age of cheap resources may have come to an end. Developed countries have to increase their efforts to decouple economic development from resource consumption.


9. Cooperate on a global basis. Competition among countries will become more intense in the years to come. All countries will try to increase their exports; all will try to attract the best-educated immigrants; and all will try to secure scarce resources, from water to oil to commodities. This increased competition will pay dividends in the form of new and innovative products. But even as they compete, the world’s countries must also cooperate. The problems of the developed economies can only be addressed in a cooperative way on a global scale. Otherwise, the world risks descending into a vicious circle of beggar-thy-neighbor economic policies leading to much lower growth and slower improvement of living conditions worldwide.


10. Launch the next Kondratiev wave. Last but not least, the developed world needs to prove Robert Gordon wrong. By investing in a growing and highly productive workforce and making it easier for engineers and technologists to innovate and for entrepreneurs to start new businesses, the developed economies need to unleash a new Kondratiev wave of global economic development.


and ends with ideas for Negotiating The Fallout...

Must Read!

BCG Ending the Era of Ponzi Finance Jan 2013


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Sun, 12/23/2012 - 18:46 | 3091859 icanhasbailout
icanhasbailout's picture

11. Affix unicorn to Krugman's Rainbow

Sun, 12/23/2012 - 18:55 | 3091862 sunaJ
sunaJ's picture

That stuff is so much more difficult than war.  There is no reasoning with the definition of insanity.

Sun, 12/23/2012 - 19:11 | 3091883 negative rates
negative rates's picture


It was the inefficiency of the democratic system itself, that bankrupt the nation. Are we about to rerelease the movie, Dumbo the elephant?

Sun, 12/23/2012 - 19:25 | 3091895 Raymond K Hessel
Raymond K Hessel's picture

This reads to me like the fascist agenda. 

I think the worst thing about this report is that it reasonably assumes inflation, government regulations, increased spending and calling it investment, #8 sounds like "new normal" to me, global cooperation(?) and governments being able to positively increase innovation proactively, ... 

I don't know... it sounds like these guys insist that government is at the center of doing what the free market can't.

Am I alone on this?? Do you agree? 

Sun, 12/23/2012 - 19:35 | 3091910 Doña K
Doña K's picture

When I see words like:

debt overhang, unfunded liabilities, efficiency of government, smart immigration. Invest in education. Reinvest, Increase efficiency and so on. 

I just see another attempt of government to spend more money.

Have a nice day. Bring on the eventuality and get it over with now.

Sun, 12/23/2012 - 19:58 | 3091950 smacker
smacker's picture

"I just see another attempt of government to spend more money."

Me too. I wonder if they costed the huge losses implied for savers/investors and the new taxes required to fund all this stuff.

I think I'd just go for Ron Paul's long-stated solution:


Sun, 12/23/2012 - 21:13 | 3092039 ultraticum
ultraticum's picture

BCG . . . . you lost me at "invest in . . . . "  


Question:  Is there a place left on earth not completely overrun with fucking interventionist government-loving idiots?

Mon, 12/24/2012 - 03:51 | 3092423 AldousHuxley
AldousHuxley's picture

Fluff piece by benched 20 something mbas at B c G

Better get staffed soon on a real billable work bullshitters

Mon, 12/24/2012 - 02:40 | 3092393 lewy14
lewy14's picture

This is the TL;DR version of the BCG article:


  • Government power expanded for decades on the back of promises to the people - pensions, healthcare, insurance.
  • Those promises are no longer credible.
  • So now that government power cannot expand on the back of those promises any longer, it's time to reneg on them...
  • ...and spend public money on other things... which will serve to expand government power.

You will see a lot of the "smart, sensible, moderate" elites - you know, the "thought leaders" - taking a similar line in the coming months.

Mon, 12/24/2012 - 06:50 | 3092468 smacker
smacker's picture

Right on. The political elites and their central bankers cannot demand full controlling power in every nook & cranny of a nation without accepting the blame when their policies all go wrong, as they have done. But we have seen a complete absence of any acceptance of responsibility by them, and they're now using the mess - of their making - to increase political control and powers. We are all fools to put up with this; it will lead to a new model of governance which is not nice.

Sun, 12/23/2012 - 23:01 | 3092216 Stuck on Zero
Stuck on Zero's picture

Dona I agree with you.  I think the author works for the gummint.  Labor shortage?  What f**n labor shortage?  22% of the populace is out of work.  More immigration?  Immigrants in the U.S. have the same average ages as Americans.  10% of our immigrants immediately go on social security.  More education?  Jees that has really worked.  The best education is a job. 

How about just less government and the rest will straighten itself out.


Mon, 12/24/2012 - 01:26 | 3092359 Errol
Errol's picture

Dona K, I see this report as even more flawed than "...another attempt of government to spend more money". 

"4. Prepare for labor scarcity. Countries need to start now to prepare for the coming era of labor scarcity. Doing so will require a series of initiatives to reduce the decline of the workforce.

5. Develop smart immigration policy. Even if developed countries take all these steps, it will still not be enough to reverse demographic trends. Therefore, these countries also need to become far more open and attractive to immigrants.

6. Invest in education. Education has to play a significant role in the future growth potential of the developed economies. "

Prepare for labor scarcity?  As offshoring and automation of clerical and production activities results in ever-increasing structural unemployment?  Attract immigrants?  As if millions of third world slum-dwellers would not relocate to the nearest industrialized country if they could?  "...future gowth potential of the developed economies"?  Growth!?! These clowns seem to believe that we can continue to have infinite growth on a finite planet, if we just somehow tweak an overextended system just right.

I'm not going to waste my time reading some fantasy of politically-impossible reforms that can somehow get "growth" resumed.

Sun, 12/23/2012 - 19:35 | 3091911 falak pema
falak pema's picture

the fascist agenda is today's world. THis is recipe to allow the fascists to save ours and their own necks; by becoming less fascist before we hang them, like Musso line vigilante. 

Its 12th hour quarter backing... can you imagine musso giving in? 


Sun, 12/23/2012 - 21:09 | 3092023 CH1
CH1's picture

it sounds like these guys insist that government is at the center of doing what the free market can't.

IMO, they see government as the essence of civilization. I, of course, utterly disagree.

Government is organized crime. The essence of their operation is organized robbery. That's just a fact.

The different thing about guv is that people have been trained to see this robbery as Holy. The difference is solely in interpretation: Theft is theft. A is A.

Sun, 12/23/2012 - 21:25 | 3092056 Seer
Seer's picture

"Government is organized crime."

Try this:

"Government is where BIG crime goes to legitimize itself."

I am neutral on "government," the word and the idea: add "BIG" and I'll go negative.  But, I'm anything but neutral when I state what happens TO government- as a center of power it is the lightening rod for abuse of power.  And given that we're all connected up to the government "grid" we pretty much know what is next implied for this analogy...

Sun, 12/23/2012 - 22:30 | 3092154 CH1
CH1's picture

I am neutral on "government," the word and the idea: add "BIG" and I'll go negative.

Rape is not of better or worse quality depending on its scale. Nor is murder, nor is theft.

Government IS organized robbery. There's not even room for argument on that question; at least not if we accept words as having meaning.

Mon, 12/24/2012 - 00:55 | 3092338 dunce
dunce's picture

Standard leftist load of crap. When has govt. ever become more efficient? They are calling for increased taxes ( revenue), and stiffing debt holders (China?), austerity is a code word for reduced spending, look at the way that is going in Europe. This is a plan, if tried, that could easily result in war with huge numbers of nukes. They might stiff the debt holders but the rest is pie in the sky.

Sun, 12/23/2012 - 19:24 | 3091897 From Germany Wi...
From Germany With Love's picture

Testimony to that (in German):

In short: From October 2008 to December 2011 European governments supported the financial sector directly with an astonishing 1.616 trillion Euros, 714.7 billions of those in the year 2011 alone - according to the European Commission.

Anyone surprised? No? I thought so. So back to money printing...

Sun, 12/23/2012 - 19:32 | 3091906 falak pema
falak pema's picture

and indirectly thru allowing Libor, off shore scamming of taxes, HFT manipulating, ZIRP assist to carry trades in derivative bets...the indirect list is endless. 

Sun, 12/23/2012 - 19:22 | 3091894 Oracle of Kypseli
Oracle of Kypseli's picture

We all know what needs to be done, including the bankers and the politicians (sociopaths)

The only chance we have is an implossion and a reset as the natural consequence. 

The longer it takes for the implossion the larger it will be and the more bankers and politicians will die.

There is no going back. Inflate or die and the end result is inflate and die

Yes Virginia brace yourself.

Sun, 12/23/2012 - 22:31 | 3092166 fockewulf190
fockewulf190's picture

The Great Reset is going to wipe out much more than just  bankers and polititicians.  Imagine what is going to happen to the billions of people living on a dollar per day or less, and then add the billions more who live on two dollars a day when those dollars dissolve into worthlessness.  The suffering will be monsterus in scope.

Sun, 12/23/2012 - 18:53 | 3091863 Aziz
Aziz's picture

One step plan:

Stop bailing out banks.

Sun, 12/23/2012 - 20:14 | 3091969 CH1
CH1's picture

My one-step plan:

Walk away from the slave game.


Mon, 12/24/2012 - 00:54 | 3092336 ball-and-chain
ball-and-chain's picture

There really is no plan.

Both sides are talking crap.

We are too far gone.

Run to the hills.

Run for your lives.

Sun, 12/23/2012 - 18:49 | 3091860 Bindar Dundat
Bindar Dundat's picture

Should be a 12 step program...

Sun, 12/23/2012 - 19:12 | 3091885 negative rates
negative rates's picture

Yea, stop at 3 and ask questions.

Sun, 12/23/2012 - 18:54 | 3091864 gimli
Sun, 12/23/2012 - 19:02 | 3091874 gimli
gimli's picture

OK ..... don't hire more see if I care.

Sun, 12/23/2012 - 18:55 | 3091866 Schmuck Raker
Schmuck Raker's picture

"We're doomed. We'll never make it."  - Glum

Sun, 12/23/2012 - 19:08 | 3091875 Monedas
Monedas's picture

There's no way to go back .... no way to avoid the cliff .... no way to not re-elect Barry .... even Angus McHugeprick couldn't fuck his way out of this mess !  Just get it over with ! You can't have a tea dance with these monkeys ! Erase the blackboard with hot soapy water and go home ...the party's over !   I'm so bored waiting for this thing to implode .... I'm praying for thermonuclear war to kill all the vermin !    My Christmas message !      Monedas    1929      Comedy Jihad End Of The World Tour    

Sun, 12/23/2012 - 19:15 | 3091890 negative rates
negative rates's picture

Yes but, he seems to be able to remain financially independent, longer than you can remain humanly sane.

Sun, 12/23/2012 - 22:38 | 3092185 StychoKiller
StychoKiller's picture


The wheel is turning
and you can't slow down,
You can't let go
and you can't hold on.
You can't go back
and you can't stand still,
If the thunder don't get you
then the lightning will!

Won't you try just a little bit harder?
Couldn't you try just a little bit more?
Won't you try just a little bit harder?
Couldn't you try just a little bit more?

Round round robin run around,
Gotta get back where you belong.
Little bit harder, just a little bit more,
Little bit farther than you than you've gone before

The wheel is turning
and you can't slow down,
You can't let go
and you can't hold on.
You can't go back
and you can't stand still,
If the thunder don't get you
then the lightning will!

Small wheel turn by the fire and rod,
Big wheel turn by the grace of God.
Everytime that wheel turn round,
bound to cover just a little more ground.

The wheel is turning
and you can't slow down,
You can't let go
and you can't hold on.
You can't go back
and you can't stand still,
If the thunder don't get you
then the lightning will!

Won't you try just a little bit harder?
Couldn't you try just a little bit more?
Won't you try just a little bit harder?
Couldn't you try just a little bit more?

[/quote] -- Grateful Dead, "The Wheel"

Sun, 12/23/2012 - 23:32 | 3092245 Imminent Collapse
Imminent Collapse's picture

Cue ball's made of styrofoam
And no one's got the time

Sun, 12/23/2012 - 19:05 | 3091877 I am Jobe
I am Jobe's picture

Drink heavily and hope the hangover stays forever.


Sun, 12/23/2012 - 19:12 | 3091886 Joebloinvestor
Joebloinvestor's picture

#8 Put the UN in charge.



Sun, 12/23/2012 - 19:28 | 3091901 Raymond K Hessel
Raymond K Hessel's picture

If this were the Onion, I'd expect an interview with Ezio Auditore.

Sun, 12/23/2012 - 19:26 | 3091887 falak pema
falak pema's picture

spot on; now who will bell the cat?

New paradigm, new governance based on slimmer more responsible, neutral government, redirect new paradigm to more value added labour, by going more value added local, more alt. energy development, all the while having global ecosystem/labour/ trade agreements.

To kick start this, it means cleaning out house of Pax Americana and its crony capitalism, based on OIL/reserve currency and hyper consumption model.

How do we destroy that awesome, sociopathic combination?

It won't go away on the wave of magic wand! 

Sun, 12/23/2012 - 19:18 | 3091891 BearOfNH
BearOfNH's picture

The underlying issues cannot be ignored any longer. The developed world faces a day of reckoning. It is time to act.

I recall reading something like this a year ago. And a year before that, and a year before that etc. I expect we'll kick the can down the road and read something like this again next December.

Sun, 12/23/2012 - 19:27 | 3091900 Raymond K Hessel
Raymond K Hessel's picture

I think people have been reading something like this in Germany and Russia for most of the 20th century.

Sun, 12/23/2012 - 21:30 | 3092060 Seer
Seer's picture

Well, they'd be right would they not?  Both experienced TWO major turnings, with Russia turning most recently (early 1990s).

Sun, 12/23/2012 - 19:29 | 3091893 Banksters
Banksters's picture

Give me a fucking break.






Bombshell: Deutsche Bank Hid $12 Billion In Losses To Avoid A Government Bail-Out

RBS still negotiating with FSA over Libor fine

Announcement expected soon from Royal Bank of Scotland about the size of its penalty for attempting to rig rates

HSBC's record $1.9bn fine preferable to prosecution, US authorities insist

Officials defend decision not to prosecute in money-laundering case despite HSBC's 'blatant fail' to implement controls


Libor Fixing Scandal: HSBC Faces Six Rate Probes as CEO Admits Bank's Failures [VIDEO]








If we as a society can't apply justice equally, we'll never end the ponzi.








Sun, 12/23/2012 - 19:58 | 3091948 mendigo
mendigo's picture

Excellent point.
The first step would need be a return to the rule of law for all.

I would also add that the elimination of the sec and of government regulation of equities and accountting of public corporations except for tax purposes should be eliminated as the fedgov is clearly not up to the task and so are only being used as a front man in a con.

Additionally needed is a roughly flat tax on individuals and business.

Sun, 12/23/2012 - 23:03 | 3092217 fockewulf190
fockewulf190's picture

Where in that report is there a demand for a balanced budget amendment to the Constitution?  That alone will provide plenty of political cover when you have to tell your constituents that the new law of the land is too not spend more than you take in.  This should be a no brainer, but it seems that way too many decision makers and policy wonks  refuse to use their own.

Sun, 12/23/2012 - 21:41 | 3092072 Seer
Seer's picture

"Bombshell: Deutsche Bank Hid $12 Billion In Losses To Avoid A Government Bail-Out"

I think that this is worth re-reading and contemplating...

On one hand they didn't want to accept a bail-out- a mark of cane; on the other hand they LIED about their books.

They were pretty much fucked whatever path they took.

No, I'm not defending them, at all!

What I'm suggesting is how impossible things are.  I think that we're way beyond legal corrections here.  This says everything about the entire bloodstream of the economic world.  Business (ones that actually make things) absolutely rely on these blood-suckers to keep things flowing.

As much as I'd like to see them all hung I'm not thinking that this is going to happen.  Further, while the System is still functioning it allows us to make the "adjustment:" if prosecution (and execution) were to occur the clock will stop- would folks really ready?  And I mean this as though EVERYTHING freezes and stops, where you canNOT expect anything to work (no food supply; no "spare" parts [why I'm trying to get my machinery in tip-top shape]).

Regardless of how shitty this circus is, all anyone really wants is more time... THE lesson to be learned is to use time wisely.

Mon, 12/24/2012 - 03:19 | 3092408 Things that go bump
Things that go bump's picture

"Kill em all and let God sort em out."  

Mon, 12/24/2012 - 05:18 | 3092445 icanhasbailout
icanhasbailout's picture



You misspelled "doused in gasoline, on fire, and running the 50-yard dash to a fire extinguisher they don't know is empty"

Sun, 12/23/2012 - 19:30 | 3091903 AgAu_man
AgAu_man's picture

Hmmm, reads like an executive summary to someone's MBA term paper. ;-) Purely theoretical solution, not attainable in the real world. Does not want me want to rush out and hire BCG for other 'sage' advice.

Sun, 12/23/2012 - 19:33 | 3091907 Seasmoke
Seasmoke's picture

i have no fucking problems if all laws and rules are off the table...............just let the rest of us know

Sun, 12/23/2012 - 20:24 | 3091915 tickhound
tickhound's picture

The "ERA" of ponzi finance... LOL.  As if this is some NEW phenomenon we stumbled onto.

The article is flawed from the first line..  "The developed world’s Ponzi scheme is caused by record-high levels of public and private debt" ..

The record debts are the RESULT of the ponzi scheme, NOT the cause.  The Ponzi scheme actually NEEDS MORE!!!!  It 'BENEFITS.'  

Later.. "The traditional model of economic growth appears to be broken." 

That "traditional model" IS a ponzi scheme, and its broken because its running out of MORE public and private debt to service it.

I mean, the growth model "appears" to be broken????? 

YA THINK??  I mean we practically BEG for hurricanes and tornados to come wipe us out because it benefits the model.  These are the things you wish for when ENVELOP and CONSUME runs out of real estate. 

The problem on Easter Island wasn't a lack of trees.  It was the model itself that made cutting the last one down WORTH the BOOST.

Just another guy trying to find a more efficient way to feed and make the ponzi "more sustainable." 

The only GROWTH this world needs right now is in NEW IDEAS. 

Sun, 12/23/2012 - 21:46 | 3092078 Seer
Seer's picture

"God bless you."  And I mean that in all sincerity.  This was pretty much what I was going to jump on.  Nothing I hate more than people who "get it" that don't "get it."  It's like this invisible wall that they can never see, they stop short, even slamming into it, yet they never seem to ask if it's because it's something else that they're failing to see!

QUESTION THE FUCKING PREMISE!  Is perpetual growth on a finite planet possible?  Unless these talking-heads are willing to engage in This discussion/premise then they can all STFU! (and anyone putting their "wealth" in with these disingenuous folks deserves what they get; how they warrant sustenance over someone breaking their backs out in some crop field is beyond me)

Sun, 12/23/2012 - 22:45 | 3092197 StychoKiller
StychoKiller's picture

So, HOW do we get off this rock?

Mon, 12/24/2012 - 03:22 | 3092411 Things that go bump
Things that go bump's picture

I think we squandered our shot at that.  As a species I think we're going to die here.

Sun, 12/23/2012 - 19:46 | 3091923 Bicycle Repairman
Bicycle Repairman's picture

End the empire and beat our swords into plowshares.  There's more than enough savings there.  Even if you are a militarist, it's obvious the MIC is not earning it's keep.

Also start drilling.  We'll consume our own oil and gas.

Sun, 12/23/2012 - 21:50 | 3092085 Seer
Seer's picture

"There's more than enough savings there."

For what?  To pay off our debts?

"We'll consume our own oil and gas."

Duh!  Consume until it's gone, that's what bacteria and cancer cells do.

Whenever you make a statement follow it with the question: "And then what?"  If you cannot get past two levels of answers then it's time to question the starting premise.

Mon, 12/24/2012 - 00:52 | 3092332 Seer
Seer's picture

A down-arrow from an infinite-earther.  Please step up and accept your Darwin award.

Mon, 12/24/2012 - 00:58 | 3092340 Bicycle Repairman
Bicycle Repairman's picture

To pay for social programs, fucktard.

As for gas and oil, three years ago you fools didn't even know what fracking was. 

Mon, 12/24/2012 - 02:39 | 3092392 Seer
Seer's picture

So, YOU'RE the infinite-earther?

Do I really want to engage in a intellectual/serious debate with a name-caller?

BTW - One can make all sort of claims, but doing so without any data to back them up is kind of like, well, name-calling.

Mon, 12/24/2012 - 13:59 | 3092623 Bicycle Repairman
Bicycle Repairman's picture

Don't you have a rainforest to save or an ozone hole to fix?  GFY.

Sun, 12/23/2012 - 19:47 | 3091928 dolph9
dolph9's picture

More polyanna bullshit.

Let me translate:

Suck it up, American bitchez!  Work your ass off so that millions more people can come to your country, and you can support the 7 billion hungry mouths around the world!


This is my response:  I'll see you fuckers in hell.

Sun, 12/23/2012 - 22:06 | 3092119 Seer
Seer's picture

"Work your ass off so that millions more people can come to your country, and you can support the 7 billion hungry mouths around the world!"

Well, MANY in the poorer countries have paid for our lavish lifestyles for MANY years.

The reality is as it was stated- an issue of demographics.  Do you not agree that there's a looming problem with an aging populace?  You either start preparing for a new crop of humans to be the "replacement" workers or you work harder: another option would be to start taking a bunch of Viagra, but that ain't likely going to help with actually raising kids (not since most are in poor physical shape).

I have no problem with younger people taking over my farm (assuming that there's sufficient gratitude that I can stay there until I die).  I DO, however, have a problem with a government (ANY government) taking it over.

And just what of yours will be here for any next generation?

Sun, 12/23/2012 - 19:55 | 3091930 booboo
booboo's picture

American needs testicle growth, then proceed to physically frog march the accused before 1000 Grand Jury proceedings called and seated by the citizens. We become the law when we demand it.

Sun, 12/23/2012 - 20:08 | 3091939 earleflorida
earleflorida's picture

Got lucky and thread-jacked these links from another site? If you've got the time... they're worth a look [jmo]!

Thomas Hoenig [Pres. K.C. Fed.[6/27/11] __  [22min.]

Sen. Sherrod Brown (OH) [8/3/11]__  [~4min.]

"Minsky 2010 Conference: Michael Greenberger on Credit Default Swaps" [1:31min.] __    

"SIFI & FASB"__ [dated 4/2/09?]

Lastly... Merry Christmas 'Julian Assange' ;-)>


Sun, 12/23/2012 - 19:58 | 3091949 ugmug
ugmug's picture

Madoff will be released from prison to run Obama's economic policy...this will give Obama more time on the links.



Mon, 12/24/2012 - 09:21 | 3092561 Absinthe Minded
Absinthe Minded's picture

The more I read today, the more I wish the End of the World did happen. Ponzi, pyramid, Madoff, they're all just symptoms of a morally as well as economically bankrupt society. We look at guns as these horrible weapons of murder and mayhem, but guess what, when you teach your kids that kill count is great in these new video games, they quickly become desensitized. We may have had psychos go on rampages in the past but they usually were not teenagers. When food starts to become scarce there may be a zombie apocalypse, but the zombies will be those who did not prepare.

Sun, 12/23/2012 - 20:01 | 3091954 ramacers
ramacers's picture

only one step, economic human nature. it's on the front step and it'll be unimaginably ugly.

Sun, 12/23/2012 - 20:14 | 3091970 frenchie
frenchie's picture

ponzi was a jew from italy

Sun, 12/23/2012 - 20:17 | 3091973 ekm
ekm's picture

Please Zerohedge, I beg you. Please stop using the stupid word "ponzi". Nobody knows who Ponzi is and it happend 60 years ago.


Please, please, please use the term: MADOFF SCHEME. This one, everybody knows about.

Sun, 12/23/2012 - 20:34 | 3091984 Atomizer
Atomizer's picture

Multi-level marketing, Madoff, Worldcom, and Enron were all shell games which led to the ponzi scheme collapse. Don't underestimate this audience, many know who Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi was. :\

Sun, 12/23/2012 - 21:08 | 3092019 ekm
ekm's picture

Oh, I'm not worried about the audience.
I'm worried about those who click once or twice a month, see these old terms and decide not to get educated here at ZH.

However, I can tell you that only few actually can visualize how a pyramid scheme works.

Sun, 12/23/2012 - 22:15 | 3092134 Seer
Seer's picture

We'll quit using "ponzi" when you quit using "pyramid?"

Most people probably have good thoughts about pyramids.  Lots of tourism.  And, the Food Pyramid is a good thing, no?

Unless you tack on "scheme" "pyramid" is basically neutral.  Hell, tack on "scheme" to anything and that thing gets negative-looking.  "It was a charity 'scheme,' oh, how wonderful!

POINT: No one can confuse "Ponzi" with anything good.

I'd prefer to inform people about exponential functions, but I'm afraid that that won't work either; BUT, it is EXACTLY what is occurring.  Further, it's what ALL economists purposely avoid: the reason why they avoid it is because if people were to understand it the economists would be out of jobs and would have to do actual (most likely physical) work.

Mon, 12/24/2012 - 00:20 | 3092296 ekm
ekm's picture

ok, ok

Sun, 12/23/2012 - 20:34 | 3091974 Radical Marijuana
Radical Marijuana's picture

Most of the comments above I agreed with, regarding the travesty of this article.

It was deceptive since it started with the statement that the whole world's economic scheme IS a Ponzi scheme. That appears to be perceptive and an accurate assessment. However, all the rest was too fantastically fairy tale stuff, which appears to be due to a total failure to face the meaning of that FACT that the whole system is one vast Ponzi scheme, which has reached the point where the debt slavery has become debt insanity.

All of the subsequent solution steps are about pretending that the established systems could somehow be reformed, when the basic reality of those systems is runaway fraud, backed by force! It is always astonishing to me how "economics" can be done in this abstract, sublime bullshit way, which manages to discuss everything in ways that deliberately ignore the basic concepts of ecology, and especially ignore the central real role of the murder system, or the death controls, throughout everything that economics actually does.

This list of 10 steps were sanitized, in ways which were practically insane. I understand WHY the economic system is run by the best professional liars, who are able to be sublimely hypocritical about everything that actually happens. However, it still astonishes me to watch that in action, as in this article!

The ONLY real ways that the established systems are preparing for the future is to prepare for genocidal wars, along with democidal martial law.  Those are the "logical" end games of increasing entropy of economic systems controlled by the triumph of frauds, backed by force. They grow and grow, until they collapse into crazy chaos. They do NOT do anything saner, because it is impossible for them to do that, within their own frame of reference.

The real world is controlled by the best organized gangs of criminals, who have taken over governments, to legalize their own crimes. That is the basic foundation of the global Ponzi scheme. That system is based on REALITY, which is that there was a combined money/murder system, in which the debt controls depended upon the death controls. The truly significant leverage was through the death controls, with the assassination of politicians providing the maximum real leverage inside those systems!

This article is bizarre pie-in-the-sky day dreaming, which admits the problem is the Ponzi scheme, but then proposes a series of political miracles as being the good solutions. ... Well, maybe so, in the fairy tale land where the best organized gangs of criminals do not actually control the real world, because the Ponzi scheme global system just somehow happened to become triumphant. It is bizarre to ignore the real history of HOW the Ponzi scheme became triumphant, while proposing solutons to the problems produced by that system totally taking over too much, for too long!

The reality is that the world operates according to the methods and principles of organized crime, and therefore, the only realistic solutions to those problems have to address those central social facts, which means that there must be alternative murder systems, doing alternative death controls, or else there are NO real alternatives, just fantasies for a series of utterly improbable political miracles! The political economy is always inside the human ecology, and economists who continue to talk about economic solutions without that context are just more of the same old problem of society being almost completely controlled by the triumphant bullshit of the biggest bullies, dominating the public debates with their huge lies!

This article is one of the increasingly bizarre manifestations of mainstream folks recognizing THE problem is that the whole global system is a Ponzi scheme pyramid system, but then, managing to continue to muddle through without actually understanding and addressing WHY that is the central social fact! As the global Ponzi scheme automatically reaches its tipping point, where the debt slavery systems become debt insanity, and even mainstream people, who look at the numbers, are forced to recognize that fact ... ... those people then return to operating within their mainstream delusions regarding how the world is supposed to operate, and therefore, what good solutions could be possible within that frame of reference about how they presume that the world is supposed to be operated. IN FACT, the real world is operated according to the methodical application of the principles of organized crime, and there are NO realistic solutions which are not more of the same, in order to change the dynamic equilibria of those forces.

Sun, 12/23/2012 - 22:23 | 3092149 The Old Man
The Old Man's picture

Right your own ticket.

R M. As prior stated it surely looks as if TPTB are allowed to do as they please by simply changing the rules of the game to their favor. Mirrored to the scheme of a public safety net such as Social Security or anything the public has adapted to by oiling that squeaky wheel through political representation. The advantage TPTB have is manipulating numbers and balance sheets to ensure they are the overall winners in a system that is favored towards them as the major holders of money and powerful global leverage while the little guys hope for a monthly payment someday that will cover the rent and buy some food.

Nice to think that such acclamations and false suppositions by an organization such as represented would come foul with our and your humanity, but they can say or state about anything they like knowing that few will listen or really give a shit. Most of what you say is true. A few know it. But.

Over a very short period of time, probably three years or less, the system will crack to an inevitable "Your on your own!" mentality, much harder than the 29 crash. Until then I suggest you get into hard assets. PM's, food and water come to mind. And learning how to sew would be good too. It's not just us who are going to take the hit. It will be global beyond what we can now conceive. IMHO

Mon, 12/24/2012 - 09:07 | 3092544 Absinthe Minded
Absinthe Minded's picture

Couldn't be more spot on. John Corzine was just the beginning, turds in the punch bowl will start turning up more and more. Hopefully our populace will finally come to an awkening, en masse, and direct that outrage appropriately.

Sun, 12/23/2012 - 20:42 | 3091995 G_T_A_44
G_T_A_44's picture

Not surprisingly absent from the BCG's plam to rid the globe of its troubles/ills - is the lack of addressing/gutting the Cancer itself.....Rampant-Pervasive-Wide-spread Fraud/Corruption that deck ALL halls. Shocking....Carry on!

Sun, 12/23/2012 - 21:19 | 3092043 max2205
max2205's picture

Cut govt spending by 50% now and by 3% for 20 years

There fixed it

Oh and have goog ge appl ect pay 36% in taxes like they should have for the last 12 years

Sun, 12/23/2012 - 22:55 | 3092208 StychoKiller
StychoKiller's picture

Do YOU understand where Google, GE, etc., get the munny to pay their taxes?

Sun, 12/23/2012 - 21:25 | 3092054 TumblingDice
TumblingDice's picture

Fortunately, there is still time to act. But leaders from all social sectors—government, business, organized labor, environmental and other stakeholder groups—need to act decisively and quickly in order to secure future economic prosperity, social cohesion, and political stability.

That about as realistic as the plot of a porno. The entire article sounds like maybe BCG would recommend that we ask for half our money back from our leaders. The gracious ponzi lords will take pity and give us back 5% and start the next Kondratiev wave with smart, targeted investments towards our engeneers, technologists and other serfs. Gee wiz that sounds great! Brb there's a blonde with huge knockers at my door with some pizza... But hold on, I didn't order any pizza! Thanks again BCG!

Sun, 12/23/2012 - 21:37 | 3092069 Monedas
Monedas's picture

BCG ! This 10 step plan is anti-Capitalist fantasy porn !  Pure rubbish ! If you don't understand Capitalism and Freedom intimately .... you ain't gonna fix shit, mufucker !

Mon, 12/24/2012 - 00:21 | 3092297 Anusocracy
Anusocracy's picture

I thought it was written by some starry-eyed EU socialist from LEAP 2020.

Sun, 12/23/2012 - 21:32 | 3092061 Monedas
Monedas's picture

We need to give evolution an assist and get rid of a lot of bad seed .... starting with Negative Rates ?         "Boston is England .... New Orleans is France .... New York is anyone for ten cents a dance !"... Lorenz Hart "Pal Joey"            Monedas    1929     Eye-On-Zion World Report

Sun, 12/23/2012 - 22:37 | 3092180 yogibear
yogibear's picture

Dr. Paul Craig Roberts

Sun, 12/23/2012 - 22:48 | 3092201 ugmug
ugmug's picture

I purpose genetically modified debt - GMD - that will pay itself off twice as fast as unmodified debt.

I'll call it QEInfinity

Mon, 12/24/2012 - 03:20 | 3092409 Beuker
Beuker's picture

All ideas still based on 'back to growth'. Time for the next step in the Maslow pyramid.

Mon, 12/24/2012 - 08:15 | 3092505 Fizzywig
Fizzywig's picture

3.  Increase the efficiency of government.



Thu, 12/27/2012 - 09:52 | 3098605 awakening
awakening's picture

Short summary; repeating the same thing again but expecting a different result.

Albert Einstein had a few words about that and insanity, I believe.

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