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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BCG report: Ending the Era of Ponzi Finance

Systemic issues require a strong dose of political will and leadership. Higher costs will lead to more global disputes over resources and fewer financial resources to pay down debt. Find the full list herestarting on page In both cases these criminals were engaged in a race for growth from Day 1 of their operating schemes.

But rather than address these issues, this publication simply aims to highlight the painful dilemmas that the developed world faces, to define the necessary steps toward a genuine solution, and to create a sense of urgency for rapid action.

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: Although it is nearly five years since the onset of the financial crisis, we are still just beginning to unwind these massive sums. Real change has to come, not Ponzi-style loose change. Competition among countries will become more intense in the years to come. But instead of investing the money to buy the coupons and exchange them for stamps, he simply used the money of later investors to pay high returns to earlier investors, extracting huge profits along the way.

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Ending the Era of Ponzi Finance

Nor are states and local governments immune. For some companies, unfunded liabilities are equivalent to more than 50 percent of their market capitalization. Perhaps the most financw statement in the BCG report: The debt situation is getting worse. In some countries, private households need to deleverage precisely at a time when they should be building up assets for the future. They are not simple solutions. By contrast, the share of government spending in developing countries is between 20 and 40 percent.

The underlying issues cannot be ignored any longer.

This may seem strange given that many advanced economies are currently suffering from high unemployment. Meanwhile, the workforce in India, the rest of Asia, Latin America, and Africa will grow at least until and perhaps even beyond. We recommend that independent professional advice is obtained before you make any investment or trading decisions.

Andrew McKillop Biographic Highlights.

To be sure, equity and commodity markets kicked off Year with a traditional refusal and rejection of the real world – the financial markets need to drag tye more hopefuls, more stupids and more greedies right up to the wire. This is partly a consequence of the Ponzi scheme itself.

Developed countries have to increase their efforts to decouple economic development from resource consumption.


Public spending on social welfare will have to be cut, even as spending in new areas of social investment will have to be increased. The average life expectancy then was 37 years for men and 40 years for women, while insurance was paid only from the age of 70 onwards. BCG put together this fascinating chart that shows that the population has already peaked in many Europe countries.

And it is exacerbated by huge unfunded liabilities that will be impossible to pay off owing to long-term changes in developed-world demographics.

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

CommentaryMarket Update. Deal with the bxg overhang – immediately. Nevertheless, his view needs to be taken seriously. Such frauds have been known as Ponzi schemes ever since. Governments and companies have made promises to their citizens and retirees that have not adequately funded. The report rightly says that “the welfare and pension crisis” in all developed countries, is deadly for the economy as we know it.

How much oonzi are we talking about? World Stock Market Indices: Once debt restructuring is under way and the broader public sees that wealthy owners of financial assets are contributing to the necessary cleanup, it should be easier for politicians to take another painful step: