Almost Every Major Economy is a Ponzi Scheme

For the sake of an example, we are going to use the U.S. economy.

If you google how FIAT currency and modern day banking works, you’ll get an extremely tedious explanation with a lot of economic jargon, allow me to explain it like a layman.

Ever wonder how the U.S. is $38 Trillion in debt?

When the U.S. incurs debt it is in the form of internal and outside entities buying treasury bonds. These bonds are an investment people make in the U.S. government and when they expire – the U.S. must pay them back the initial investment (cost of the bond) plus the interest (profit).

You’d think your tax dollars or the profits of the U.S. economy go towards paying off these bonds. That is only partly true – and barely so.

The real way the U.S. pays off these bonds is by selling new bonds.

Think of it like you having $5000 in credit card debt that’s due.

Instead of you paying out of your liquid capital, you get another credit card to pay off the one you owe on. Now the debt that you owed on the first card is gone yet you now owe on the second card. When the second card is maxed out and due – you get another to pay off that one. Rinse and repeat.

Now that is called rolling over debt. It’s not inherently a Ponzi scheme. The key difference being that a Ponzi scheme is backed by nothing, whilst U.S. treasury bonds are backed by the U.S economy.

However here’s what muffs that up.

Currently the U.S. debt to GDP ratio is a little over 100%. GDP being $35T and debt being $38T.

What this means is the debt is worth more than the economy. Meaning that the economy can’t pay off the debt. Meaning that treasury bonds in the very near future will be backed by nothing , other than the faith of new investors buying bonds.

Think about that – the debt is backed by nothing other than the faith of new investors buying bonds .

That is the very same as a Ponzi scheme, where the debt owed to the investors is only backed by new liquidity injected by new investors, not the actual business or product.

The U.S. economy in the very near future, will be a tried and true Ponzi scheme .

Not only that – the gap in GDP to debt is only expected to grow, not diminish.

It’s not only the U.S. either. Any country with a central bank runs like this.

If/when new investors lose faith and stop buying new bonds , the economy hits the floor .

FUN FACT

You know how people get mad about their money going to Ukraine or Israel? Our tax dollars! they say.

The hard truth is those are not your tax dollars .

When congress passes a bill. The federal reserve simply types a digital amount of money into the treasuries account . They effectively create money out of thin air and that is what is sent abroad.

Your federal tax dollars simply go towards the national debt. Once again, that works practically the same across all nations with a central bank.

Welcome to the scam of a system we live in.

Poor financial decisions and crimes for you – are smart financial and banking decisions for the elite.