The Global Economy is a Ponzi Scheme: How should we fix it

A Ponzi scheme is a type of investment fraud where investors are paid from the contributions of new investors. Usually in a Ponzi scheme investors are promised high returns with little risk. Ponzi schemes constantly require new flows of money to survive due to their being little or no legitimate money being earned. The world economy seems to work the same way as a Ponzi scheme.

How the World Economy’s Ponzi scheme Works

Here’s how the world economy’s Ponzi scheme appears to work. Since the United States’ (US) currency is no longer backed by gold, the American government is able to print as much money as they want. When the US government’s treasury department needs or wants money, they borrow money from America’s central bank, the federal reserve. The federal reserve then prints the currency, gives it to the Department of Treasury, and receives an IOU from the Department of Treasury. The IOU’s are sold to investors in the form of government bonds. These investors may take the form of individuals, pension funds, or countries. With the money provided from the loans or government bonds the US pays its bills and obligations. Approximately, the first three minutes of the below video provides a more illustrative representation of this global Ponzi scheme.