Bernie Madoff's family speaks out for first time in new book and 60 Minutes and Today Show interviews:
The Atlantic Wire reports that in these interviews, Ruth Madoff, wife to Bernie Madoff, says she didn't know what a Ponzi scheme was when Bernie Madoff admitted what he had been doing:
Ruth Madoff: He called from the office and said, "I'm coming home with the boys, I have something to talk about." Came in, we went into a room, four of us, and he said, "I have a confession to make. I've been running a Ponzi scheme." He said, "$50 billion dollars."
Andrew Madoff: He said-- "Everything I've been doing is all a big lie." He said-- he said, "The business is-- is a Ponzi scheme, and it-- the firm is completely insolvent. And I'm broke." And then he just started sobbing. And I was-- I-- I was shocked. I-- it was-- I felt like my head exploded. I mean, I-- I don't think if he had told me he was an alien I could've been more surprised. He said that the firm had liabilities of $50 billion dollars. It never occurred to me that his business had anything like that under management. It was-- it was shocking.
The first thing Ruth Madoff reportedly asked her husband after his revelation was "What's a Ponzi scheme?"
Bernie Madoff and the World's Biggest (Private) Scam
In December 2008, Bernie Madoff, a respected businessman and investor, was arrested and charged for committing the largest investment scam perpetrated by a single individual in history, amounting to $50 billion. Despite being a respected businessman, a former chairman of the NASDAQ, and a prolific philanthropist who helped manage many charities, his name is now synonymous with fraud and theft. He is the most hated man on Wall Street and for years now, he has been the target of a very public flogging by the media. He has become an object of scorn and ridicule- his name and legacy have been permanently stained with dishonor for his scam. What exactly did he do?
What is a Ponzi Scheme?
The scammer promises great returns on an investor's money, but instead of actually investing it and making money off of it, he pays out the returns with money from new investors. When the first round of investors get their fantastic returns, news spreads and attracts a third round of investors and the scammer uses their money to pay off the second round, and the process continues. This is essentially how Bernie Madoff scammed so many people. The scammer can keep it up for a while, but it is ultimately unsustainable because it requires more and more new investors to pay off prior investors. Eventually the scammer has to run with a big chunk of the money. The reason for the failure and arrest of Charles Ponzi (for whom the scheme is named) and Bernie Madoff is that they got too involved in the community and unwilling to grab and run.
The US Government and Federal Reserve Bank- The Real Biggest Ponzi Scheme in History
Sadly, America's political and economic leaders are pulling an even bigger scam of the same kind on the American people. I understand that this is a bold claim, but it is not a conspiracy theory and I am not claiming to have special knowledge that no one else does. I just want to get you to think about what you already know or can easily learn about how America's economy works. It is well known that the government and central bank (the Fed) control the money supply and inflate it by controlling interest rates and printing money. 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 fueled, attracting a third round of investors. Their demand pushes prices up to pay off the second round. And the process continues.
Why It's A Scam
It's just like a Ponzi scheme- in fact, it is one. It's just a little more elaborate. The first round of investors is convinced that it's a great investment because housing prices will rise dramatically, but they only rise so much because a second round of buyers has an artificially high demand for the housing, an artificially high-demand stimulated by an artificially-expanding supply of credit created by our central banking system. Like other Ponzi schemes, it is unsustainable because it depends on more and more investors to buy into it to keep the scheme afloat and pay off earlier investors. Eventually it will crash, or as they say, the bubble will "burst." And that is what we experienced in the credit crunch and housing crisis of 2008- the scheme collapsing because it's unsustainable.
The Road To Hell Is Paved With Good Intentions
I am not accusing the government or Fed of trying to scam us and run with our money. They had the best intentions and thought that by expanding the credit supply and stimulating a housing boom, they could fuel major economic prosperity. Like Charles Ponzi and Bernard Madoff, they got fooled by the game and seduced by the possibility of endless, freely flowing wealth. They thought they could manage it, keep it going, and use it for good purposes. Ponzi and Madoff became pillars of their community and got involved with many notable charities, but they hurt a lot of good people, including the charities, when their scams inevitably collapsed. Today their names are reviled and dishonored. Madoff is a truly hated person right now. Why are we Americans so blind that we cannot see this is what our own monetary system has done to us? Why isn't the US government being held to account for its scam and the millions of lives it has damaged?
Contact your representative in Congress (feel free to contact everyone else's too!). Use one of these websites to get their contact information (Contacting Congress or USA.gov/contact) and make a quick phone call (it should take less than 5 minutes), saying the following or something similar:
Hello, my name is __________ and I am a constituent of Representative __________, residing in (your zip code).
I am calling about America's economic crisis. I want to urge __________ to make abolishing the Federal Reserve System and returning America to a sound fiscal and monetary policy his/her top priority.
Then if you haven't already, subscribe to this website using the form in the sidebar to the right so you can stay informed about the economy and all the other scams the government and media are running on the American public.
This article appeared in The Silver Underground.
Editor in Chief, THL
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