Charles Ponzi was a swindler. You give him money and he’d pay you interest on that money by using cash from new “investors” in a deal that had only deposits and payouts and no investments.
Bernard Madoff is the new Charles Ponzi. He schemed a $50 billion mess and now people will pay for his lies with their lifestyle.
The arrest of the 70-year-old Madoff, widely considered to have the magic touch as an investor, is another serious black eye for the hedge fund industry and all non-transparent investment vehicles. Investors across the New York area have clamored to be in Ascot because of the stability of double-digit returns and the reports of serious wealth creation. The scandal is bound to reveal the inner workings of the hedge fund industry, whereby intermediary feeders bring in their clients and take fees for putting clients with an investment manager.
If Madoff hadn’t faced $7 billion in redemptions, this Ponzi scheme might not have been discovered. What’s astonishing is that he got away with it for so long with nobody discovering it. What his four family members in Ascot knew is a puzzle that everyone wants answered, but one thing is certain: It’s virtually impossible to have returns like Madoff reported, and it should have been a major warning signal.
We find it fascinating that a Ponzi scheme is illegal and punishable by law, but the Social Security System is seen as a fail-safe method for protecting the elderly from poverty when, in reality, Social Security is a giant, wobbling, government supported Ponzi Scheme that relies solely upon the blood of new money to pay for the welfare of old bodies.
Credit Cards are also the newest Ponzi Scheme as Americans struggle to pay one card with a cash advance from another card. With each American averaging $16,000.00USD in credit card debt, the biggest Ponzi Scheme of them all is about to topple the financial towers.