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Saturday, March 14, 2009

Bernard Madoff Pleas Guilty To 11 Counts For His $65 Billion Ponzi Scheme

This Thursday, Bernie Madoff plead "guilty" to 11 counts of fraud for his $65 billion Ponzi scheme:

At several points as he told of his deceits, Madoff blinked his eyes rapidly. Later in the hearing, he stood as Chin asked him how he pleaded to each of 11 counts filed by the U.S. Attorney’s Office in Manhattan. Madoff pressed his thumbs and fists into the defense table as he said “guilty” 11 times.

It is truly poetic that a man should be so publicly flogged at this time in history for the crime of scamming people out of billions of dollars of their money. I say so because the United States Congress and the Federal Reserve bank are guilty of perpetuating the exact same kind of fraud, only on a much grander and more destructive scale.

In January, I explained what a Ponzi scheme is and how our system of monetary inflation is the biggest Ponzi scam in history:

The scam works like this: The first round of investors is convinced to use credit to buy a house they cannot afford as an investment, "because housing prices are always going up." They get their returns with the increased value of their housing, which is caused by the second round of investors buying up homes using the artificially-expanding supply of credit. As news of housing values spreads, a housing boom, or "bubble," is fuelled, attracting a third round of investors. Their demand pushes prices up to pay off the second round. And the process continues.

But as with all Ponzi schemes, the process is unsustainable, and the bubble must inevitably burst. If you haven't already, I highly recommend that you read the whole article for its clear articulation of the similarities between Madoff's billion dollar scam and the US Federal Reserve's trillion dollar scam. This week, Bernie Madoff plead guilty to 11 counts of fraud, but all the politicians and bureaucrats that have scammed the American people will walk away with no charges, no trial, and no consequences for their reckless behavior.

As I said, it is truly poetic to see Mr. Madoff walk into a court of law in disgrace for his crimes. My words entirely lack the eloquence that this trial has to expose our country's foolishness. It shows just how blind we are, that we heap contempt and scorn on Madoff's head while allowing Congress and the Fed to get away with their far more disastrous scam.

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