Madoff is a drop in the bucket. Even Social Security pales in comparison to what is transpiring before our very own eyes. It takes no special investigative unit of the government to uncover this massive fraud nor a congressional inquiry to analyze how this could happen. No, this is the grand daddy of all ponzi schemes and it's in plain sight yet so many continue to play despite all the warnings and the magnitude of the problem. Buyer beware because the time will come when there is not enough to support the bottom rungs of the US debt pyramid and the collapse will be catastrophic.
Think about it! The US continues to sell bonds, notes and t-bills ("treasuries") at an enormous clip building a mountain of debt nearing $16 trillion with no end in sight. The funds from these treasuries are used to pay-off maturing treasuries keeping those holders happy and satisfied with their return on their investment. In the meantime, the culprit of this massive fraud continues to sell even more treasuries to splurge on a lavish lifestyle (military, bailouts, social services, massive government, etc.) to which it can ill afford. Like every ponzi scheme there is no basis for paying back the earlier investors (e.g., sufficient invested capital for which revenues can be generated) other than through the continual flow of funds from new investors. As long as new investors keep the blinders on this "bonzi" scheme (as I will call it) it can continue to prosper as a "sound investment" but the time will come...
If you're in these, you better get out. And now is the time! The 10-year US treasury bond is at an interest rate of 1.6% after hitting an all-time historic low of 1.47% this month. Keep in mind that treasuries filter everywhere within our society so you better know where your money is and how it's invested. For example, many mutual funds hold treasuries while they search for new investments consistent with the main objectives of the fund. Banks hold treasuries while they evaluate the lending potential of new borrowers. Corporations hold treasuries as they look to obtain nominal returns whilest they pursue their primary mission for their existence. You may even have some United States Savings Bonds lying around the house from birthdays or Christmas - time to cash those in. I'd rather be early to the exit like I was in the housing bubble than to be caught in the tsunami of this debt bubble.
Time to learn what's in your investment portfolio and begin to divest yourself of holdings that are exposed to US government debt. The end result of this ponzi scheme will leave investors holding the bag. There won't even be the satisfaction that the culprit in this case will serve time in prison - they'll be free to do it again!
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