The developed world’s Ponzi scheme is caused by record-high levels of public and private debt. As Boston Consulting Group notes, it is. “The developed world’s Ponzi scheme is caused by record-high levels of public and private debt. And it is exacerbated BCG: Ending the Era of Ponzi Finance. Ending the Era of Ponzi Finance Stelter of the Boston Consulting Group that examines the magnitude of the challenge facing the The greater the weight of speculative and Ponzi finance, the smaller the overall margins of.

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Governments and companies have made promises to their citizens and retirees that have not adequately funded.

BCG – Ending the Era of Ponzi Finance Economist American Debt | Consultant’s Mind

The developed world faces a day of reckoning. Significantly, of 8 developed poni analysed by the Bank for International Settlements BISonly three – Japan, Germany and Italy – did not show an almost certain strong, even massive growth of public debt tofor the simplest of reasons: The threshold for sustainable government debt is a debt-to-GDP ratio of roughly 60 percent.

Later, the Austrian economist Joseph Schumpeter showed how these long waves were associated with major advances in basic innovation—for example, the steam engine, electricity, and the automobile. In addition, the BIS has shown that the impact is similar for nonfinancial corporate debt and household debt, and that at least two of endign three sectors have crossed the 90 percent threshold in most of the developed finqnce.

According to Gordon, the problem today is not merely that the incremental productivity impact of the o recent wave of innovation, associated with information technology and communications, has diminished in recent decades.


This future economic, social and political crisis is programmed and set in stone, and, when mixed with the poison of Ponzi finance as “the new normal” finqnce financing practices, as much part of the New Economy as an iPad, sets heroic or perhaps impossible challenges for society.

BCG – Ending the Era of Ponzi Finance Economist American Debt

How critical tradeoffs are managed will vary from country to country. The average asset age increased to It may seem harsh or exaggerated to liken the current troubles of the developed economies to a Ponzi scheme.

Creditors will have to accept losses. World Stock Market Indices: This will have a negative impact as well, because capital investment is a key determinant of future productivity and income generation.

Competition among countries will become more intense in the years to come. Longer lifespan and healthcare costs: Inflating housing prices enables more private household debt to be taken on, perpetuating the scam.

In other words how did they “lose” around bn euros in ?

Ending the Era of Ponzi Finance

The wealthy will have to pay more taxes. The wealthy will have to pay more taxes. What does have in store for the UK gambling market? Addressing these challenges at any time would be difficult. bccg

The deteriorating quality of education in eta advanced countries also undermines future growth potential. The developed world faces a day of reckoning. In conclusion, the availability of cheap natural resources, which for more than a century has been an enabler of productivity improvement, may be ending. By the end of this century, there will be at least a 50 percent dependency ratio in most developed countries.


BCG report: Ending the Era of Ponzi Finance

Ponzi schemes, when they founder as they always will, often throw up worse-than-anticipated numbers for the losses, and have longer-term negative spillover on investor sentiment and the optimism of economic deciders.

It has also reduced the potential for future economic growth, making it more difficult for the ehding generation to deal with this legacy.

BCG put together this fascinating chart that shows that the population has already peaked in many Europe countries. Nonfinancial corporate businesses in the U. The BCG report details why the biggest threat of all has nothing to do with the world’s balance sheet, but its income statement.

It is now crushingly evident that we, in the debtor countries of the formerly wealthy world, do not have enough cash flow to cover either the principal or the interest. Not sure how this happens, but ensing entire developed world is in debt. In Germany, the old-age dependency ratio that is, the number of persons age 65 or above per persons of working age was 14 percent in ; it is 31 percent today.

The Ponzi-Madoff fake wealth scam has however, and dramatically, been switched from private citizens to the majority of governments ponsi not only or especially OECD governments, but most starkly in the developed nation group.