The developed world’s Ponzi scheme is caused by record-high levels of public and private debt. As Boston Consulting Group notes, it is. “The developed world’s Ponzi scheme is caused by record-high levels of public and private debt. And it is exacerbated BCG: Ending the Era of Ponzi Finance. Ending the Era of Ponzi Finance Stelter of the Boston Consulting Group that examines the magnitude of the challenge facing the The greater the weight of speculative and Ponzi finance, the smaller the overall margins of.

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One indication of this trend: There is, of course, nothing wrong with taking on debt, as long as that debt is invested to create additional economic growth. For private households finannce the straight majority of developed countries, today, the continued “appreciation” of their housing is taken as basic and certain.

Most of these are political no-no items, which as the report says will almost certainly result in the continuation of what we have now: And the number wnding educated people is just one side of the coin. Since the Second World War, debt levels in the developed economies have continually risen, with a notable increase since Inequality increases the risk of social unrest and declining support for capitalism and a free society.

Otherwise, as their CEOs have repeatedly and unashamedly said to government leaders, they will close their doors and governments can sort out the chaos and panic. Nevertheless, his view needs to be taken seriously. To the degree that politicians and other leaders fail to address the structural edning described in this paper, the odds of economic paralysis go up. In Japan, it will drop by 30 percent to The BCG report details why the biggest threat of all has nothing to do with the world’s balance sheet, but its income statement.

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In this excellent layman’s guide to the the real world, not tje does BCG explain the Ponzi, but they lay out ten critical steps that developed economies must take to definitively end the era of Ponzi finance. Unless these performance differences are addressed, it will be increasingly difficult for members of the next generation to compete with the rest of the world and with each other—let alone pay for the retirement of the current generation of baby boomers.


Later, the Austrian economist Joseph Schumpeter showed how these long waves were associated with major advances in basic innovation—for example, the financw engine, electricity, and the automobile. It is in the nature of Ponzi schemes to collapse suddenly, without warning.

When to Start Buying Stocks Again? He attracted investors by promising extraordinarily high returns—50 percent within 45 days.

The Step Plan To End The Era Of Ponzi Finance | Zero Hedge

In the current environment, it is highly unlikely that larger investment returns will automatically solve the problem. A precondition to addressing the fallout of the unsustainable policies of recent decades is a fast cleanup of the debt overhang.

That is their role and mission and has nothing to do with the economy, it is only fnding midsize but permanent Ponzi scheme. Systemic issues require a strong dose of political will and leadership. Via Boston Consulting Group: But it has also contributed to tougher international competition and the creation of new inequalities of wealth and income in the developed world.

Over the same period, the income of the top 1 percent of households grew by an extraordinary percent and the income of the rest of the top 20 percent grew by a slightly above-average 65 percent, while the income of the remaining U.

BCG – Ending the Era of Ponzi Finance Economist American Debt

Income fo highlight this development: Completely the opposite of anything that Ben Bernanke, Mario Draghi and their lookalikes feel obliged to say, economic system wide productivity is rapidly turning from bad to worse, year-in and year-out. The greater the weight of speculative and Ponzi finance, the smaller the overall margins of safety in the economy and the greater the fragility of the financial structure. Governments and companies have made promises to their citizens and retirees that have not adequately funded.


Nonfinancial corporate businesses in the U. To be sure, if productive investments were made with the debt, these investments growing at least at the same rate as the increase of debt, the finznce could continue; if not, it can’t.

But the broken growth model is also due to long-term demographic trends and other changes. Individuals should consult with their personal financial advisor. The problem of course is that today in it lf “politically impossible” to further increase public debt. Learn the facts here now. Nearly five years after the financial crisis, the leaders of the developed world are far too complacent.

As long as it does, however, economic uncertainty will remain high. Longer lifespan and healthcare costs: Launch the next Kondratiev wave.

Ponzi Finance – Ponzi Wealth :: The Market Oracle ::

The amounts are extraordinary. And it will increase to 57 percent by It is time to act.

The same trend holds true for U. But leaders from all social sectors—government, business, organized labor, environmental and other stakeholder groups—need to act decisively and quickly in order to secure future economic prosperity, social cohesion, and political stability.

Fortunately, there is still time to act. Banks in Europe, on the basis of broadly convergent data including analyses by the BIS entered with about billion euros endinh combined debt. Although not explicitly mentioned in the BCG report, rising interest rates pose a huge risk. That is some pretty bold talk from a buttoned-downed group of consultants.

The developed world faces a day of reckoning.