We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.—
I learned recently there really is no such thing as a Nobel prize for economics but if there were I would nominate Bernard Madoff to receive the prize. Instead of being reviled he is being emulated and imitation is the sincerest form of flattery, as we know.
You may ask how I could possibly come to that conclusion, Madoff being in a federal penitentiary. Well, I think Bernie will be recognized as the father of the Fed bailout of the United States and be given a cabinet position in the second Obama administration.
Let’s review what Madoff did. He used the money of new investors in his scheme to pay returns to his old investors making it seem as if they were making fantastic returns on their investments. As those new investors were ready to receive their returns even newer investors had to be recruited to pay those returns. Eventually the entire scheme fell apart as the market turned down and it became harder and harder to attract the “fresh blood” needed to keep all the balls in the air. It is called a “Ponzi scheme”, named after the first practitioner of the art, a man named Ponzi.
Well, how is that different from what is going on with the United States Treasury and the Federal Reserve? And both the Fed and the US Treasury know what is going on and have approved of it. The Federal Reserve is creating money out of thin air and buying US Treasury bonds and toxic mortgage debt that is owned by the USA (ie., the taxpayers).
The US Treasury (overseen by President Obama) doesn’t have the money to pay the interest on the bonds the Fed is purchasing. Presumably the plan is that when those bonds mature the Fed will purchase more bonds from the US Treasury and the Treasury will use that money to pay the Fed its pound of flesh. Amazingly, all this can be done without any oversight or approval by Congress.
Bernard Madoff went to jail while these guys are given positions of responsibility and are esteemed, at least by one another. This is no way to run an country.
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