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Old 12-10-2012, 06:59 AM   #1
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Fiat Ponzi

I know what a Ponzi Scheme is, and I know what a Fiat is. What is a "Fiat Ponzi"? Is it like a Fiat Abarth?
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Old 12-10-2012, 07:09 AM   #2
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Old 12-10-2012, 09:15 AM   #3
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fiat a barf ?

gotta be some kind of allergic reaction ...........
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Old 12-10-2012, 10:00 AM   #4
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There are a number of ways to express it. My favorite is it is a monetary regime within which more and more money is printed out of thin air to cover previous promises and to permit those inn power to consolidate as much real wealth as possible before the scheme collapses in upon itself, as all fiat regimes have throughout history. There are no success stories surrounding paper money, since the temptationn to debase is always greater than the desire for fiscal restraint.
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Old 12-10-2012, 02:22 PM   #5
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Ponzi scheme, is a scheme in which, to pay previous obligations, newcomers' money is being used, and when there are no more newcomers, the scheme collapses.

Kind of like in the system, where money is always created as someone's debt/obligation, be it individual, national or corporate.

Since only capital is created in this scheme, and all debt obligations have to be repaid with interest, it is always required, that some new suckers enter at the bottom of the pyramid with ever more debt, for the system as a whole being able to paid already existing obligations, and to keep the system from collapsing. Which is why it fits perfectly the definition.

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Old 12-10-2012, 02:52 PM   #6
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Old 12-11-2012, 06:56 AM   #7
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Yeah, I know what a "Ponzi Scheme" is, but what does the word "Fiat" have to do with it? "Ponzi", "Pyramid", "Multi-Level Marketing", etc... But "Fiat" Ponzi??? Is that a Ponzi Scheme started by "Fiat Spa"?
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Old 12-11-2012, 07:09 AM   #8
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Well, I can see by the race car in your avatar that you are no stranger to the world of auto manufacturing, so you obviously can see the connection to the Italian automaker.

But, being a pmbug, you also know that Ponzi is an Italian name! ... /Vizzini

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Old 12-11-2012, 07:41 AM   #9
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Originally Posted by Mark View Post:
Yeah, I know what a "Ponzi Scheme" is, but what does the word "Fiat" have to do with it? "Ponzi", "Pyramid", "Multi-Level Marketing", etc... But "Fiat" Ponzi??? Is that a Ponzi Scheme started by "Fiat Spa"?
An unbacked (fiat) currency is a consider a basic version of a ponzi scheme. Just like a normal ponzi scheme, a fiat currency is a confidence game. Eventually, it will come to an end in one way or another (none good for you or me).

These guys studied almost 600 fiat currencies to see what eventually happened...
http://goldsilverworlds.com/gold-sil...ystems-failed/

"Of these 599 dead paper currencies:

(30%) 184 ended monetary unions, dissolution or other reforms, such as the creation of the Euro in 1999 (and its physical use since 2002);
(15%) 94 ended through acts of independence (former colonial states renaming or issuing new currency);
(27%) 156 were destroyed by hyper-inflation (caused by over-issuance of paper money by governments and central banks);
(28%) 165 were destroyed by war (deemed invalid through military occupation or liberation)."

"The figures are clear. ALL the 599 analyzed paper money systems did disappear.

Furthermore, the study pointed out that the median age for all existing “paper currencies” in circulation is only 38 to 39 years. Earlier in this article, we mentioned the 15th August 1971,which marked the end of Bretton Woods and the start of the US dollar as the world reserve currency backed by nothing but promises and trust. That’s 41 years and 4 months ago."
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Old 12-11-2012, 10:08 AM   #10
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Originally Posted by benjamen View Post:
An unbacked (fiat) currency is a consider a basic version of a ponzi scheme. "
There we go. That's what I wanted. I've never seen the word fiat used like that. So if "fiat" refers to un-backed currency, then isn't the US currency system essentially a "fiat"?
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Old 12-11-2012, 10:12 AM   #11
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Hey Mark, I was just having a bit of fun with you. Thanks for taking it in stride.

http://en.wikipedia.org/wiki/Fiat_money

It's actually a pretty widely used term.

And yes, the USD is a fiat currency and has been since 1971.
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Old 12-11-2012, 10:37 AM   #12
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Originally Posted by Mark View Post:
There we go. That's what I wanted. I've never seen the word fiat used like that. So if "fiat" refers to un-backed currency, then isn't the US currency system essentially a "fiat"?
Yep, the US currency has been a fiat currency since 15th August 1971. Interestingly, if you go read the transcript of the speech Nixon made that day, Nixon wanted to reassure everyone that it was a "temporary" measure!


Actually, all national currencies are currently of the fiat type..
http://www.forexonlinelearning.com/f...acked-by-gold/

It seems you are not allowed to have a gold back currency to join the IMF... interesting
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Old 12-11-2012, 11:02 AM   #13
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Originally Posted by PMBug View Post:
Hey Mark, I was just having a bit of fun with you. Thanks for taking it in stride.
Haha - Taking it in stride or just too stupid to know you were poking fun at me.
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