The Global Financial Pyramid

Jim sends this interesting article.

Commenting "Bernie Maddoff was a piker," Jim continues:

I ran across this article today from an economic series in the Manchester Guardian titled "Road to Ruin". The author, Dan Roberts, uses a simple graphics guide to show how the entire global economy is functionally equivalent to a Super Ponzi scheme. The simple answer to the hypothetical question, "where did all the money go?", is nowhere, it never really existed. Until the price of a house falls to the value of the bricks and lumber plus the man-hours of immigrant labor to rebuild it, the economy will continue to contract. Attempts to pump "money" into the economy will only devalue the currency. The cost (price) of materials and labor will rise (inflate) until price = value. We are in for a long haul and a rough ride. I suspect Bernie understood this clearly and just underestimated the tipping point. Unrestrained economic growth looks a lot like unrestrained population growth, with similar consequences.

Have a nice decade.