From today's FT:
Sir,
Ponzi schemes are much more common than is generally supposed.
Millions of ordinary people borrow from one provider of credit solely for the purpose of repaying another without the remotest expectation of being able to repay their latest loan until they have obtained the next.
David W Green, Financial Reporting Council, London.
Tuesday, 23 December 2008
Reader's letter of the day
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3 comments:
Another Ponzi scheme is National Insurance.
I'm not convinced that debt restructuring is actually a Ponzi scheme. The objective isn't actually to defraud, merely to buy more time to pay off creditors.
MJW, the debt bubble is in itself not a Ponzi scheme, but the housing market certainly is - prices went up and up because more people borrowed ever larger amounts of money in the hope of making capital gains. The likes of you and me bailed out in time, is all.
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