Thursday, May 20, 2010

Adrian Salbuchi : The Whole Global Financial System is a Ponzi scheme

Adrian Salbuchi: Capitalism is a flawed model

Adrian Salbuchi : The whole global financial system is a Ponzi scheme not just Bernard Madoff :

"Hello, my name is Adrian Salbuchi and I’m speaking to you from Buenos Aires in Argentina. Everybody seems to be talking about the global financial crisis. But I want to show you, based on our experience here in Argentina, that there is no global financial crisis. What you are suffering, the First World, is an irreversible global systemic melt down. There’s no way of saving it. You might think, well this is a little bit exaggerated, but I want to show you, based on our experience, perhaps we know better.

I have here a coin which is 1 Argentine peso. This will buy you, well it’ll hardly buy you a bus trip in downtown Buenos Aires. And yet if I were to go to 1970 – in 1970 this little coin would have purchased you Argentina 4 or 5 times after another. Why? Because since January of 1970, we have undergone 4 major monetary changes where they’ve knocked off zeros on our currency. Thirteen zeros to be exact. So this would be worth 10 trillion pesos from that time and 10 trillion pesos at that time would’ve bought you Argentina… 3 or 4 times over. That’s inflation. Actually that’s hyper inflation. So when we hear about your inflationary concerns and everything, we’ve seen that, we’ve done that. We’ve been through the whole thing."


"The whole global financial system is a ponzi scheme. And I’m going to show you how this works. First side of the global financial pyramid. Planned monetary insufficiency. The real money in every country – United States, Argentina, Brazil, Britain… Real money is the money that is issued by the state. In other words real “hot money” let’s call it that way, legal tender. Which in the United States is a funny sort of money because it’s issued by the Federal Reserve Bank. And the Federal Reserve Bank is a private entity. Let’s say central banks issue the real money. The dollar bills, the euros, the Argentinian pesos and so forth. The whole system is planned in such a way that there is never real money for the needs of the economy.

There enters the second side of the pyramid. Since there is not sufficient public money, that is replaced, or that is substituted by private money. In other words, the private banking system exerts sufficient control over the state and over the central bank, over the Federal Reserve System, as to guarantee that it will always issue insufficient amounts of money. And in comes the private banking system saying ‘Mr. individual, Mr corporation, Mr. government… you need money? No problem. We’ll give it to you.’And that’s when the banks come out with the fractional reserve system and charging huge amounts of interest. Whereby for all the loans that they make, tey make huge amounts of money. That’s the second part of the pyramid. Replacing real money, with funny money. In other words banking money, Which grows at an exponential rate because it grows based on the fractional monetary system, the fractional banking system.

The third side of the pyramid.Do everything by debt. Consumers are always indebting themselves. Do everything with a credit. Do everything with a loan. If an individual wants something, no problem have it on credit. If a corporation needs to build a new headquarter or a new manufacturing assembly line, no problem. Do it on credit. If the government has to do something in Argentina, the United States, no problem. Just get yourself nicely indebted with all the major private banks.

And you have now a situation where, in the United States for example, the government owes over 10 trillion dollars, that’s your debt indebtedness. Corporations owe about 9 trillion dollars. Individuals owe about another 9 trillion dollars. my country Argentina, the state is indebted over 350 billion dollars and our individuals are also indebted. Everybody’s indebted. Everywhere in the world. Individuals, corporations, states… Everybody owes money. And the key question is owes money to who. Why is the entire planet indebted to somebody?

And the forth part of the pyramid is the one we Argentinians are experts on. And I will call it privatizing the profits, socializing the losses. Because since the whole thing is a model, that model can be predicted how it will react, we know that when this ponzi scheme is growing there’s money all over the place. There’s easy loans, easy credit – “everybody” makes money. And when this is growing, the whole system is planned in such a way, that the channels for the huge profits will go to the private bankers. It will go to the private shareholders. It will go to all the people that they want it to go to. When it gets to a point where this is just going to explode, as happened to you (U.S.) on September of 2008, the whole thing starts collapsing, a new set of channels is activated. And all the losses are socialized. Just as the profits were privatized to the people they wanted to privatize them to, when the whole thing blows down and starts imploding and collapsing, that is socialized by taxpayer bailout plans or via the Federal Reserve issuing trillions of dollars of fake money, which means the entire planet is paying for it."