ZERO HEDGE: Our ruling and wealthy elite are suffering from the problem of all Ponzis – how to get out

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Why we should all feel sorry for the 1% caught up in a runaway Ponzi scheme they can’t control.

RIELPOLITIK

Source  – zerohedge.com

– “When in a hole, stop digging. But when in a bubble, keep blowing.  –  Not very ancient proverb”

 – I think our ruling and wealthy elite are worried that they are  stuck in their own ponzi scheme or bubble and are suffering from the general problem of all ponzis and bubbles – how to get out.

You see bubbles and Ponzi’s are fine as long as they keep going. As long as there are ever more suckers to recruit and as long as enough of those already in, remain confident and choose to stay in, there is no real reason a ponzi cannot go on and on.  A perfect example is Madoff’s scheme. The weakness of all bubbles, ponzi or otherwise, is that all it takes is a rumour that it might be time to get out,  that it might soon get difficult to get out, or…

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17 thoughts on “ZERO HEDGE: Our ruling and wealthy elite are suffering from the problem of all Ponzis – how to get out

      • THE MARK OF THE BEAST SHALL SEPARATE PEOPLE. IF YOU HAVE THE MARK OF THE BEAST HELL IS WHERE YOU SHALL GO. THERE IS NO OTHER WAY, BUT JESUS CHRIST. THOSE WHO ARE DEAD NOW AND HAVE NOT BELIEVED IN HIM, SHALL BE RESURRECTED AND SHOWN HE IS THE MESSIAH, AT THAT POINT IF THEY REJECT THE TRUTH, HELL IS WHERE THEY SHALL GO. THERE SHALL BE NO MORE DIVERSITY IN THE UNIVERSE, THE AGE OF MAN SHALL END, AND THE HEAVENLY FATHER SHALL BE ETERNAL. THERE ARE ONLY TWO ROADS AND WE ARE GIVEN A CHOICE OF (1) JESUS CHRIST, OR (2) THAT OF satan. THERE ARE NO MIDDLES GROUNDS OF DIVERSITY. THIS IS HOW IS WAS IN THE BEGINNING PRIOR TO ADAM AND EVE SCREWING THINGS UP FOR EVERYONE.

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  1. Interestingly, the bubble will pop, and the rich will come out of this crash just as they did out of the 07-08 implosion, even richer than they were before the implosion.

    Yes, there is a bubble. But that was and is always the mode of operation.

    The real speculators, the market insiders, just before the Fed decides to raise interest rates (any time now) — which is the kick deliberately taking out the legs from beneath the market, ensuring the coming crash through the miracle of the ‘margin call’ and the ‘stop-loss order’ — will already have taken up (short) positions that will further increase their private fortunes.

    Mutual funds and pension funds and retail investors and so on, i.e., working class pools of “professionally” managed money, will be left, as always, in the lurch.

    The rich will be unscathed. At least those of the establishment. Not the 10% but the 1% or so.

    Wish it were true, though, that our elites really were scratching their heads over this one.

    Nevertheless, the article does reveal much about the way the ‘game’ is actually played. Very much worth the read.

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    • I’m not so sure the rich will come out of this one, as most current wealth (despite its magnification by financialization) stems from cheap fossil fuel and that party is over. I find what’s happening in Greece, where 30% of the population belongs to the self-governing Solidarity 4 All movement, extremely encouraging. By participating in Solidarity 4 All, the Greek people have essentially opted out of the capitalist system by running their own clinics, pharmacies, time banks, schools and markets

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      • In the longer run, the ‘system’ will certainly subvert itself and, I agree, is already a good part of the way there. It’s a slow motion train wreck.

        I guess my point is that ‘stock market’ crashes are actually a means to an end for Wall Street: it is a fleecing operation. Savings are ‘invested’ in the market, where in one part of the market cycle, they drive asset inflation on behalf of the insiders who ‘manage’ the funds “entrusted” to them; by the time the inflows begin to ebb, the insiders are already positioned either on the short side of the asset valuations or long safe-haven or counter-cyclical assets like gold or simply cash. The trigger, unless the crash happens on its own, is always a hike in interest rates, thereby cutting off the inflows leveraged on credit and crashing overall asset valuations, a downward spiral guaranteed and aggravated by both the short-selling of the insiders, or those induced to do so by the market propaganda system — that and the automated series of ‘managed’ stop-loss orders; once the bottom is reached, once the market is re-stabilized, the insiders re-position themselves ahead of the next engineered and Fed funded wave of market inflows. Rinse, repeat, and so it goes . . .

        I’ve never heard of ‘Solidarity 4 All.’ Sounds promising. I’ll have to inquire.

        Oil drying up? Only if it’s biotic in origin. See, for example, Engdahl, 2007:

        http://www.engdahl.oilgeopolitics.net/Geopolitics___Eurasia/Peak_Oil___Russia/peak_oil___russia.html

        But maybe Engdahl is a nutter. Then again, maybe not. His article nevertheless offers interesting leads.

        Regards,

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  2. I tried to read this entire article. I really did. Maybe it’s the musician in me, but I despise business of any kind, especially this kind of insane criminal business.

    I just want it all to end for good and never come back.

    How’s that for “wanting to know”?

    I know this much, our economy is built on NOTHING, just as it was in 2007, right before the “bubble” burst the last time. We no longer produce anything. I’m in Ohio, and the industries that once kept people working have all disappeared: out of business, or shipped overseas.

    Now money is made by the powers that be by playing Las Vegas like games with investments, or betting against other’s investments. It’s sick and disgusting!

    Maybe I’m just tired?

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  3. As I mention above, there is some very exciting stuff happening, especially in Greece, Spain and Italy. This movement to opt out of capitalism is less visible in the US owing to heavy media censorship, but it’s happening there as well.

    I guess it’s time for me to publish some optimistic posts for awhile about changes that are occurring.

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  4. Hi Norman, perhaps I should have been more clear about the cheap oil issue: there’s still oil in the ground all right, but most of the cheap stuff that’s easy to access through cheap conventional technology has already been extracted. If you haven’t checked out Richard Heinberg, the Post Carbon Institute and the Association for the Study of Peak Oil and Gas on this point, I think you might find this worthwhile. Their work is based on years of careful research and, in my view, extremely well documented.

    I understand Engdahl’s arguments about speculation driving oil prices up, but I think the last 7 years have born out the views of peak oil researchers I mention above. It’s only been the “relative” scarcity of cheap oil that have made dangerous and expensive new technologies like fracking and tar sands extraction financially feasible.

    Contrariwise the recent drop in the price of oil (Heinberg blames this on reduced demand due to the global recession and the refusal of Saudi Arabia to decrease production accordingly) has put a lot of these fracking assholes out of business.

    I agree totally that the economic crash that happened in 2008 was a clear opportunity (largely due to government bailouts) for the rich to seize an even greater proportion of society’s wealth at the expense of the poor. If we’re well-organized the next time, as Iceland was, I honestly think we can pressure government to put bankers in jail rather than bailing them out.

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