This page has been archived and commenting is disabled.
Hot-Tip From Convicted Ponzi Master: "Join My Ponzi: It Is Better Than The Fed's"
What's the difference between today's global finance system and a Ponzi scheme? This is the question that a 56-year-old veteran Russian financial scammer has been asking his victims. As Bloomberg points out, chillingly, he almost has a point. Sergei Mavrodi is one of the most infamous names in Russia's recent history. Back in February 1994, amid the turmoil of the country's transition to a market economy, the mathematician organized a Ponzi scheme called MMM. Now he's back with an even more audacious endeavor: the honest scam. Last year, he announced the new project, MMM-2011, by stating boldly that it would be another Ponzi scheme. "Even if you strictly follow all instructions, you can still lose," he wrote on a website describing the project. "Your 'winnings' may be withheld without any explanation or reason whatsoever." Depositors would be paid solely from funds invested by other depositors. There would be no attempt to generate income in any other way. This, he said, was perfectly all right, and no different than the way some of the largest institutions in global finance operated, from the Russian pension fund to the U.S. Federal Reserve. Perhaps most notably, Bloomberg reports his perspective on "What is money?" he wrote. "Nothing! Nihil. A phantom. … It is backed by nothing at all and printed by the masters in any quantity, at will."
Is Global Finance a Ponzi Scheme? Ask a Russian Expert
...
Sergei Mavrodi is one of the most infamous names in Russia's recent history. Back in February 1994, amid the turmoil of the country's transition to a market economy, the mathematician organized a Ponzi scheme called MMM. He offered returns of 100 percent a month and advertised aggressively on national television. Before the pyramid crashed in July 1994, it attracted as many as 10 million depositors
...
Mavrodi managed to avoid prison for nearly a decade, in part by getting elected as a parliamentary deputy and using the status to obtain immunity from prosecution.
...
"Nothing! Nihil. A phantom. … It is backed by nothing at all and printed by the masters in any quantity, at will."
Such a case might have been hard to make back in 1994, when Russians saw the U.S. dollar as an unassailable store of value. But in today's post-financial-crisis world, it's easy to see how Mavrodi's arguments could convince an uninitiated observer. The U.S. is paying back its bondholders with money freshly printed by the Fed. Greece is paying back investors with money the European Union has borrowed from other investors -- or maybe some of the same investors -- via its bailout funds. The developed world's central banks have printed the equivalent of trillions of dollars in new money to keep their financial systems and economies afloat.
Mavrodi's sales pitch worked. On May 31, MMM-2011 claimed 35 million participants throughout the world. The number may be wildly inflated, but there were certainly hundreds of thousands of people in Russia, Ukraine and other post-Soviet nations who invested with Mavrodi. Their money allowed him to buy outdoor advertisements (this time avoiding TV) and open up chains of “consulting offices.”
...
MMM-2011 halted payments on May 31. “Unfortunately, I have to admit that a panic has started within the System,” Mavrodi wrote, blaming the media for spreading malicious rumors. “This is a pyramid! If everyone rushes to withdraw the money, there is no way there will be enough money for everybody. In fact, it would be the same with any bank.”
Undaunted, Mavrodi launched a new pyramid, MMM-2012, saying that it would be used to prop up MMM-2011. “Don't worry, don't be nervous, we will fix everything, and you'll get paid in full,” Mavrodi wrote, adding immediately: “This is not a promise, just a feeling I have.”
...
Some MMM-2011 depositors, like their predecessors in 1994, have borrowed against their apartments to invest and are now facing homelessness.
It may all be their fault. They had been warned repeatedly by various officials and by Mavrodi himself. It is, however, an interesting moral issue, if not a legal one, whether governments have any obligation to protect financial innocents from themselves.
One also wonders whether the policy makers managing the world's financial system might be able to extract some lessons for themselves.
»
- 17830 reads
- Printer-friendly version
- Send to friend
- advertisements -
Ponzi Bitchezz!!!
I would trust him for atleast his honesty.
"In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and God like intelligence for kings." - Aristotle
First it was the zombie attack in Miami.
Now comes the rabid attack of the spiders in India:
http://www.foxnews.com/world/2012/06/03/2-people-dead-after-swarms-venom...
Meanwhile, in Paris, Axl Rose suffers a "boating accident":
http://www.dailymail.co.uk/tvshowbiz/article-2155423/Guns-N-Roses-singer...
Where's my SNORG-TEE hottie displaying the 'Meh' shirt?
M.E.H......Monetary Event Horizon
Miss my little darlin'........
At this point, unwinding it would be so catastophic that we may as well jump on the bullshit bull run and buy SPY. We here all say that there will only be a worse, inevitable crash later, but total destruction is total destruction -- now or in a few years. Being ZH educated and super-bearish just limits profits from these bullshit rips. One koolaid, please. Ugh, I can't swallow....
"Did the Koolaid quench your thirst ? Oh, dear me, I'd like you to meet our esteemed leader, Mr. Jones."
Money is based entirely on faith. Faith is lost. They can print to infinity. There is no income to support the debt.
wrongo mr. kayman. apparently they still believe, and they will still believe, and they will still will want to believe and they still will continue to want to believe, and they still want to continue to want to still believing. have you seen the avengers yet?
i missed dancing with what ever yesterday. what a shame? and i missed some playoff game. of some sort. i believe there will be another one soon?
Not a real Aristotle quote, but I liked it anyway.
german 2y rate + 600%
capitulation??
http://www.cds-info.com/
Well, they were at 0% last week. Of course any improvement is massive from that level.
But the real story is ... there are no more takers at 0%?
Tontine bitchezzzzz!
You just know it's coming back.
It reminds me of the old chain letters: break the chain and a sin will be cast on your mortal soul.
Yeah, but it's more like:
Take out a fellow beneficiary and increase your payoff by x%
The perfect program for an insolvent government. The obligatory, socially malignant incentives are perfectly transparent!
Now THAT explains my life-situation.
+1 for the Philip K. Dick - Blade Runner - corrupt bar owner handle.
They should probably mention Mavrodi did 5-8 years in jail for his last pyramid. I have no idea how it's legal for him to do this again...
The same way government keeps doing it to us.
There is something in the peoples psyche that whenever a new pharao comes around and promises to build a shiny pyramid, the people are everytime persuaded that they have to sacrifice to help build ît.
To their own demise.
My point is: the sheeple will always desire a pyramid
I think we have identified a leading contender for next Fed Chairman.
Now that I've told you that I'm an ax murderer do you trust me?
:o)
Brilliant! Add that man to the Kill List at once.
Au contraire, mon ami!
He's telling the sheep it's a ponzi and they're gonna be robbed, it's not his fault that they voluntarily part with their fiat.
Here's a good lesson, btw - http://www.youtube.com/watch?v=rf3TDCqXKJQ
In the state's system, Irwin Schiff refused to pay his taxes. He wound up in jail.
If you have small children, you are completely in the system's grasp.
Sure, in the system of legalized tyranny, you pay what you have to in order to survive.
However, being a parent gives you an additional responsibility to starve the system (no credit cards, no loans, no mortgages, no big bank accounts), preserve your wealth in physical assets and increase the odds of securing your children's future.
The problem of course though is that those who do not play well within the system see their children secured by it. Children have to be protected from terrorists after all!
In a Ponzi, the participants do so willingly. We're being FORCED to participate! That's the difference as I see it!
Good point
Absolutely true. But, of course, we ALWAYS have a choice to participate at the minimum level. Just minimize as much as possible ( even to a point of restricting your self from the goodies/poison of the civilization ) all of your money transactions and invest/make/do things that can not be taxed ( there is NO LAW against that .... yet ). It is that simple. Ones most of the people do it the current system will crumble out of its own weight.
I'll take 100.
BTFD! Bitchezz
Convict him!?!?
HIRE HIM!
This guy is the only guy that rivals G.O.A.T.F.U.C.T.
With that kinda attitude he could go real far in government to the point of becoming even president or something.
He has an offer from Goldman that he is considering
thanks,
now i know how MDB got an offer beside being Jewish.
Exactly. I think we've just met our next Fed Chairman...
seriously this guy has balls and may be my new hero.
Penny auctions are wildly successful, as are state lotteries. People would willingly invest with Madoff again, if they thought they could time it correctly.
Bernie Madoff (More or less to the tune of the Brady Bunch)
Bernie made off with the money
And spent it living like a king
He bought mansions, he bought Bentleys,
He bought tons of bling
Madoff paid off old investors
With money stolen from the new
'Till the SEC said "Bern, excuse me,
That's not what you're supposed to do."
That's when Madoff laid his maid off
And moved into surroundings more austere
The kind where Bubba, hubba hubba,
Pokes you in the rear
That's the story of Bernie Madoff
Who strayed off the path and turned to crime
Thus did Madoff finally fade off
And now he's doing time
The Fed has the authority to print legal tender authorized by Congress under the 16th amendment.
So the difference is that Mavrodi couldn't print when people bail; the FED can.
the bernank is a pig.
I find your avatar disturbing becuz I find myself imagining things in it that I find disturbing.
Someone asked what the avatar depicted yesterday so I will share with fellow ZHers so they don't get all hot and bothered. The guy in the hat is humping the leg of the hot chick (twice his size) at left who has been cropped out mostly.
could you elaborate?
I think we already know enough now.
The Bernank is shorter in real life.
Funny, I always thought it was that Lady Gaga thingamajig.
Did it cost $3,000?
Where I just put yesterday my mask of V-Vandetta?? Just let me think for a while
(cuz it may come in handy the other day..)
'The mathematician organized a Ponzi scheme called MMM.'
Then the academics went and changed its name to MMT (Modern Monetary Theory).
It's still money for nuthin' ...
I have always said that Charles Ponzi should be rewarded a posthumous Nobel for Economics and Finance. After all, it is what everyone has decided was the best!
jimijon.blogspot.com
"Accepting the reward on behalf of the passed Mr. Ponzi will be Mr. Madoff" - Nobel Commitee
Paul Krugman was miffed that he wasn't chosen to accept for his mentor.
I like the "get elected to government and invoke immunity" play. Steal enough to fund an election and then let the good times roll.
Where have I seen that playbook before?
Everywhere?
If only John Edwards had gotten elected we'd be hearing about all of Obummer's scandals instead.
Then there's Berlusconi. What crime isn't he guilty of.
This guy is onto something.
If you zero out all the compensation paid by the banks and subtract all the losses, I'm sure what you wind up with is depositors funding whatever flimsy interest there is.
The same goes for the bucket shop called the stock market.
Yes, but he will still end up in jail, because he's not an insider, hence is not allowed to get away with it.
Nevermind, a large donation to Obama would probably do the trick.
We already know if you subtract the government bailouts they are in the hole so bad they are bankrupt. It would be interesting to calculate the amount paid out in compensation, and the amount lost on Ponzi schemes to their confreres and compare that to the amount they are in the hole.
If you read this you will understand what I am thnking...
http://www.ilukacg.com/articles/Tao%20of%20Alpha.pdf
+1 for basics.
“This is not a promise, just a feeling I have.”
Thats the greatest line of ALL TIME !!!
The greatest line = "When the going gets weird the weird turn pro." ~ HST
Mavrodi is the Yoda of Ponzi...
backed by nothing it is.
promise it is not; feeling it is,
started a panic has, yes...
Now there's a visionary. I would like to meet this gentleman and discuss a project involving a certain bridge with him. Selling that bridge with his assistance should be possible and furthermore, we could rehypothicate the bridge.
When we're done with that engagement, we could explore my latest idea to leverage pets. They breathe, eat, drink, shit and require dwellings.
This can is at the end of the road, let's get a new can.
He's got more panache then the Bernanke and TurboTim combined.
I don't understand what is causing this great rally today. Did I miss some news?
Where is the stimulus coming from?
From nowhere. Short squeeze. Monthly outflows in May were horrific.
Short squeeze, market couldn't go down anymore so it was bound to squeeze back up. Probably for the next week at least
Does anyone remember Glenn W Turner's Dare To Be Great and Koscot Ponzis? His solution to the collapse of his first scam, was to let the losers in on the ground floor of his next Ponzi so they would be the first to get their money back.
He saw nothing wrong with his Ponzi schemes as long as no one lost money, and this way no one would.
I can already see headlines
"Russian Banking Genius Recruited By ECB for Euro Crisis"
Bankruptcy | June 05, 2012 | CFO.com | US
MF Global Finance Execs Knew of Risks to Customer MoneyThree months before the firm’s collapase, a CFO warned about funding liquidity needs with customer-segregated accounts, according to a bankruptcy trustee’s report.
http://www3.cfo.com/article/2012/6/bankruptcy_mf-global-cfo-liquidity-ri...
Holy Mackerel!
This ought to change things ...fast!
Pssshaw! You should know better than that. Mr. Trustee is doing damage control under the guise of investigating.
genius
Its nice to see an honest upfront (former?) thief these days. Much better than the shit we have here. At least he tells you when the money runs out thats it. No can kicking here. WOW.
This sounds too good to be false. Is it tax-deductible? I want in.
Please take 30% of my salary.
Oh wait!
It can't be tax deductible unless you are being fucked by the government or a registered broker dealer, yes? They only let you deduct a portion of the money they've already screwed you out of - so you don't feel like you're being 100% screwed. However, if you lose in a Ponzi scheme or in Vegas - well, they didn't get enough of the cash so "NO TAX DEDUCTION FOR YOU!" Madoff is the only one that kinda works because he was a registered broker Ponzi schemer, insofar as he was recognized by the SEC (no, not for Ponzi scheme - just for being licensed.)
More conspriacy theory
Weak, Hamy.
Must be drunk.
+1 for the above2 quote
Shit, I had the most difficult fixing that. Now I can understand Slewie a little better.
Judging gold's recent move in the last few minutes, this article humilated the banksters.
I kind of like this guys honesty in a sick way. For years I drove by these guys holding up "will work for food" cardboard signs on the way home from work. Then one day I saw a guy holding up a " why lie? I want a beer" sign. I actually pulled over and gave him $5.
Miffed:-)
"Eventually paper money will return to its intrinsic value, zero" ~Voltaire
I FREAKING LOVE IT!!!!
I WANT IN.
NOW!!!!
"What's the difference between today's global finance system and a Ponzi scheme?"
One is obligatory.
What an outrageous and silly question - What's the difference between today's global finance system and a Ponzi scheme?
Let me explain:
Just a minute..
ah, hang on a sec.
Can I get back to you on that one?
"It is, however, an interesting moral issue, if not a legal one, whether governments have any obligation to protect financial innocents from themselves."
the worlds governments have built such a massively complex financial system, that they have made "financial innocents" out of 95% of the developed world's population. Not that i want to make an excuse for people who can't be bothered to learn about such things. But the governemnt has now created a system where is MUST take care of financial innocents. I don't believe in black helicopters, but if I did, I would easily say this was their plan all along.
80% of tax returns are prepared by a 3rd party...and this isn't out of luxury by necessity. it is sad when you need to hire a professional just to determine how much you owe in taxes.
peak gov? yeah, a LONG time ago.
> "What is money?" he wrote. "Nothing! Nihil. A phantom. … It is backed by nothing at all and printed by the masters in any quantity, at will."
Actually, money is the mechanism through which those with the power, capital, and most importantly weapons manipulate and control the Sheeple. It's the mechanism that holds out the carrot of hope and the stick of fear known as taxation.
If each man had a roof over the head of his family, and food on the table every meal. Those little pieces of paper, as well as the gold & silver, would be meaningless to him.
Lead on the other hand.... Never loses its meaning, in the right hands.
Undaunted, Mavrodi launched a new pyramid, MMM-2012, saying that it would be used to prop up MMM-2011. “Don't worry, don't be nervous, we will fix everything, and you'll get paid in full,” Mavrodi wrote, adding immediately: “This is not a promise, just a feeling I have.”
Is he playing the same tricks as FED and ECB or vice versa?
The appraoch and explainations and promises given have a strong resemblance to the kind of stuff Eurocrats come out with. Just different vocabulary and sans the summits, fine dinining and circle jerks.
Where we are today started many years ago with some unknown goldsmith who thought to himself: "You know, if I just.....". It will never end, never cease to exist, will be with us in perpetuity because someone, somewhere will say to himself: "You know, if I just.....". Educate yourself and protect yourself - don't become bait........
Get over it, modern civilization is just a Ponzi.
So true
Amen.
I'd like to create a market for volatility derivatives on the Russian Ponzi Scheme. The PonzVix? Yeah, that makes sense. It's too bad the 3 or 4 percent of college grads that can understand Calc II or III and complex stats all are in the market rather than designing some cool shit.
It was appaling watching sleazeballs at Lehman walking with W2/1099s for $60m in 2007, when they basically created the same thing the Ruski openly admits to creating. They're still boning their butlers and this guy had to go to jail?
That's screwed up, no? My parents were fucking lying when they said it was good to be honet and to never lie, cheat or steal. Look what it got me - - 80 hours of work each week just to keep my house off the auction block and my cock of my wife's chopping block.
Wow please put this guy on the top of the list of people that should be killed...
MMM-2012
Politicians should examine that.
Maybe the can learn something from that. Like if you're greedy and get fucxked over it's your own f*ing fault.
Oops. No.
Better not...
They might get this wrong, as always.
Does he only rob Joos like Madoff did or does he rob anybody?
So, has anyone here signed up at http://mmm2012.com?
It appears the shortest investment is 1 month, so you're betting that the pyramid holds up that long, minimum.
There was a investment scheme in the 80's in the USA that ran similarly.