Brace yourself because the water has now receded in the land of retirement.

Here’s the problems and this is what happens.

Thinking about retirement in 2 or even 20 years?  It’s situation critical as SRSrocco informs us that “Regrettably, Americans have no idea that their monthly retirement contributions are not being saved, nor stored in a nice gold vault, rather they are being squandered to pay the lucky slobs who retired before them…”

Charles-PonziThis particular Ponzi scheme hit close to home for me because I knew Robert personally.
When I found out about it, I couldn’t believe this person I’d spent time with was capable of this criminal act.
But as sobering as that was, it pales in comparison to another Ponzi scheme most of us have been suckered into…

Jason Burack of Wall Street for Main Street invited Fund Manager Dave Kranzler to discuss economic issues and the precious metals market.
Kranzler discusses his report which exposes why he believes to be, in essence, a Ponzi scheme dressed in drag – replete with highly misleading accounting issues and very questionable business model.
They also discuss why the Fed can’t raise interest rates, the precious metals and mining stocks, & whether or not the LBMA and GLD are effectively out of physical gold bullion and the housing market:

Mr. Ponzi was a charming con-artist who operated about a century ago in the United States and Canada.  He enticed investors to contribute new money to his investment scheme (100% return in 90 days), skimmed a portion for his luxurious needs, and used the remaining money to pay off prior investors.  The system worked marvelously until it collapsed and people realized that his postal reply coupon investments could not produce the profits that supposedly paid off early investors.
Perhaps Charles Ponzi deserves recognition as the patron saint of central bankers and politicians.
Consider these systems that are similar to Ponzi schemes:

debt infographic

Source: Demonocracy

The numbers that you are about to see are likely to shock you.  They prove that the global financial Ponzi scheme is far more extensive than most people would ever dare to imagine.
As you will see below, the total amount of debt in the world is now more than three times greater than global GDP.  In other words, you could take every single good and service produced on the entire planet this year, next year and the year after that and it still would not be enough to pay off all the debt.
But even that number pales in comparison to the exposure that big global banks have to derivatives contracts.
It is hard to put into words how reckless they have been.  At the low end of the estimates, the total exposure that global banks have to derivatives contracts is 710 trillion dollars.  That is an amount of money that is almost unimaginable.
The truth is that our financial system is little more than a giant pyramid scheme that is based on debt and paper promises. 
The following are 12 numbers about the global financial Ponzi scheme that should be burned into your brain…

house-of-cardsAmericans are an amazingly insouciant people. By now any other people would have burnt Wall Street to the ground.  – Dr. Paul Craig Roberts

My only disagreement with him is that it’s not just the economy, it’s the whole da*n system.

gold standardAs the U.S. economy continues to disintegrate, increasing numbers of investors will be forced to move out of paper assets and into physical gold and silver to protect their wealthAt first the move will be slow, but as Americans wake up from four decades of fiat monetary amnesia, it will turn into a torrent.
Unfortunately, there won’t be much in the way of physical precious metals to “GET” at this time, as the clever Chinese and Easterners already cleared most of the shelves.
Currently, Americans are invested in the largest Paper Ponzi Scheme in history.  They hope and pray that the DIGITS in their accounts will be good as gold when they retire.  Unfortunately for them, the only thing that is good as gold….. IS GOLD (or silver).

However, Americans will still be shocked and stunned that they didn’t see this big transfer of wealth coming….. and there is a good reason for that. 

bitcoin silverI hereby make a prediction: Bitcoins will go down in history as the most spectacular private Ponzi scheme in history. It will dwarf anything dreamed of by Bernard Madoff. (It will never rival Social Security, however.)
The fundamental characteristic of money is its relatively stable purchasing power.
Bitcoins will never achieve this. It is a mania going up. It will be a mania coming down. It will not increase the division of labor, because people will recognize it as having been a Ponzi scheme, and they will not again buy it. They will not use it in exchange. Companies will not sell goods and services based on Bitcoins. Bitcoins have to have stable purchasing power if they are to serve as money, and they will never, ever achieve stable purchasing power.
There has to be an economic justification for a capital investment, and there is no economic justification of buying Bitcoins as an alternative currency.  The Austrian theory of money shows why.
I do not invest in capital that has no economic justification other than the greater fool theory. There are too few fools to keep the scheme going.
Bitcoins are the 2nd biggest Ponzi scheme in history.  You can’t say you weren’t warned!

Ponzi schemeWe don’t have enough workers earning enough and paying enough Social Security payroll tax to support 57 million retirees. There are only 13 million high-wage earners (above $85,000 annually), and those with very high incomes pay no more Social Security payroll tax than those earning $113,000.
This is not sustainable. The average Social Security benefit is $1,230 a month or about $15,000 a year. It takes the payroll taxes of roughly 10 million low-wage workers to fund 1 million retirees receiving $15,000. The system needs another 57 million decent-paying full-time jobs to be sustainable in it’s current form, i.e. the ratio of full-time workers to beneficiaries needs to rise back up to 3-to-1.
Unless 57 million Martian workers agree to kick in 12.4% of their quatloos (and assuming quatloos are convertible into dollars), the system is a doomed Ponzi scheme.
System costs will be rising fast as the Baby Boom retires en masse. There is no guarantee Social Security payroll taxes will rise at the same rate. Indeed, a recession or stagnation in the job market could cause payroll taxes to decline even as benefit costs soar.
Ignoring the facts won’t help us address the insolvency of pay-as-you-go social programs.

Global Conventional Assets 2012The world is invested in the largest Ponzi scheme in history.  
In 2012, world gold investment was $234 billion and silver was $7.9 billion for grand total of $242 billion.  In contrast, total investment in global conventional assets under management grew to $7.5 trillion the same year (2011 – $79.7 trillion to 2012 $87.2 trillion).  Thus, total gold & silver investment in 2012 was only 3.2% of these global conventional assets.
The real problem for these conventional assets in the future will be the peaking of global oil production.  These assets derive their value from a growing economy which occurs due to a growing energy supply.  Once the energy supply peaks and declines, it will put severe stress on the $trillions of conventional paper assets.

First, let me just say up front that anyone who is worried that the U.S. will default on its Treasury obligations because of this grand Vegas stage-show going in DC is a complete idiot.  To begin with, I fully expect Boehner to cave in and come to an agreement that at least temporarily lifts the debt ceiling so that Jack Lew and Obama can continue spending our money at a far greater rate than the incoming revenues.  Second, for all you folks with your head in the sand about what has happened to our Constitution over the last 13 years, the Patriot Act/Homeland Security Acts give Obama the authority to unilaterally print the money needed to service the Government’s Treasury Ponzi scheme in case the stage actors don’t blink by October 17th – Jack “Yes I’m A Thief” Lew’s drop-dead date for cash in the Treasuries drawer.
Ultimately the debt ceiling will be raised by at least $1 trillion and Government spending will not be reduced.  But rest assured that the massive graft and kick-back payments that flow freely all around Capitol Hill will continue unabated.

house-of-cardsDid you know that you are involved in the most massive Ponzi scheme that has ever existed?  To illustrate my point, allow me to tell you a little story.  Once upon a time, there was a man named Sam.  When he was younger, he had been a very principled young man that had worked incredibly hard and that had built a large number of tremendously successful businesses.  He became fabulously wealthy and he accumulated far more gold than anyone else on the planet.  But when he started to get a little older he forgot the values of his youth.  He started making really bad decisions and some of his relatives started to take advantage of him.  One particularly devious relative was a nephew named Fred.  One day Fred approached his uncle Sam with a scheme that his friends the bankers had come up with.  What happened next would change the course of Sam’s life forever.