The Ponzi
scheme that has been going bad is not just another misguided investment
strategy. It is at the very heart of the
banking business, and is the thing that has propped up that business over the
course of three centuries. (A Ponzi
scheme is, of course, a form of pyramid scheme in which new investors must
continually be sucked in at the bottom, so as to unknowingly provide money for payouts
to the "older' investors who have risen to the top of the pyramid. Word of the fat profits going to these "older'
investors tends to spread, thereby (for a necessarily limited period of time) drawing
in more investors at the bottom.) --Ellen Brown, Chapter 19
18. Is it now possible to make hundreds of
billions of dollars in profits on securities that are backed by nothing more
than cyber-entries into a loan book. And
now those who cashed in on this swindle have lined up outside the Federal
Reserve building to trade their garbage paper for billions of dollars of
taxpayer-funded loans.
Meanwhile,
the credit bust has left the financial system in a shambles and driven the
economy into the ground.
The unemployment lines are growing longer, and consumers are cutting back on everything from nights-on-the-town to trips to the grocery store. And it's all due to a Ponzi-finance scam that was concocted on Wall Street and then spread through the global system like an aggressive strain of Bird Flu. So this is not a normal recession; the financial system has been blown up by greedy bankers who used "financial innovation" to game the system and inflate the biggest speculative bubble of all time. And they did it all legally, using a little-known process called securitization. --Mike Whitney, Chapter 20
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