Charles Ponzi and his scheme

The sensational rise and fall of Charles Ponzi attracted some attention this side of the Atlantic. The Times christened him the "whirlwind financier", and on July 28, 1920, reported on an amazing "get-rich-quick" scheme [click on the links for the original Times reports]:

An amazing "get-rich-quick" scheme, whereby Mr Charles Ponzi, a short time ago a relatively poor man, now estimates his wealth at upwards of £1,700,000, has attracted the attention of the public authorities of Boston.
The extraordinary feature of the case is that the authorities are not at all certain that Mr Ponzi's operations are in any way illegal, and have only called a halt until his accounts, which run into millions of dollars, can be audited.

Unabashed, a couple of weeks later, Ponzi had an irresistible offer for the public:

Mr Charles Ponzi, of Boston, whose manipulation of the foreign exchange market has been a nine days' sensation, will launch his new co-operative world trading scheme on Monday ...

It is estimated that Mr Ponzi has paid out more then $1,000,000 and in every case the holders of matured notes have received 50 per cent of interest

Ponzi had started off his scheme by using variations in foreign exchange rates to trade in international reply coupons, but there was now no end to the variety of investment areas on offer:

Mr Ponzi's new ventures include the importation of diamonds on a large scale, the exportation of a cheap motor-car to be known as the " Wales," the establishment of shipping lines, and of a chain of banks.

According to Mr Ponzi, enormous profits can be made by the purchase of diamonds in Italy at 500 lire per carat, which at the current exchange, and with the import duty added, would mean about $40 per carat here, or one-fifth of the actual market value.

Although Ponzi's activities had come to the attention of the federal authorities, they had failed thus far to find any irregularities. Imitators were quick off the mark:

The Ponzi ghost appears already to have stalked from Boston to Broadway. A hitherto unknown concern, the Montgomery-Macdonald Company, has opened offices and sent out thousands of circulars, principally among theatrical folk, offering 30 per cent return on investments within 60 days. Members of the firm decline to explain the process making quick returns possible, except to say that they "were taking advantage of the retreat of the Polish Army and the general effect of that retreat upon European currency and credit".

Hmmm.

The authorities were still confused. Ponzi claimed that the investigation was being carried out at his own request, to reassure investors that his business was kosher. But then the fall came quickly:

The whirlwind financial career of Mr Charles Ponzi, the "money wizard" of Boston, who for weeks has been astonishing the public and the authorities alike by his 50 per cent returns on six-week loans, is likely to be a prosaic one. Three creditors have brought bankruptcy proceedings against him and Mr Joseph C. Aen, State Bank Commissioner, has ordered the Hanover Trust Company not to pay any more money on the cheques of Ponzi or his agents. Mr Ponzi remains undisturbed, advising investors to keep their heads until the proceedings are finished.

Mr Ponzi surrendered yesterday to the Federal authorities just in time to prevent his arrest by the State officials. It is said that the completed audit of Mr Ponzi's affairs will show a deficit of at least £600,000. It is estimated that during the past six months he received from investors nearly £2,500,000, that in the fortnight since the run on his bank began he paid out about £1,500,000, and that his securities, realty, and other assets amount to perhaps £800,000.

The statement by the Federal auditor that Mr Ponzi's accounts would show a deficit resulted in scenes almost approaching riot. The streets of South Boston were filled with hundreds of Poles, Italians, Greeks, and Lithuanians who had entrusted their savings to his charge.

Ponzi, by this time, had aquired celebrity status:

Throughout the legal proceedings Mr Ponzi maintained his wonted assurance. The streets surrounding the Court House were filled with persons eager to catch a glimpse of the financial "wizard". Sentiment towards him was by no means hostile ; many persons expressed the opinion that he was being persecuted, and would, if given a fair chance, pay off his debts.

And when his arrest finally came it had to have been in front of a crowd:

Mr Ponzi was arrested by Federal officials this afternoon on a charge of using the mails with intent to defraud. The arrest took place before a crowd of persons who bad held his notes. He was released an hour later on £5,000 bail. He declares that he is solvent, but the I authorities insist that his indebtedness now runs into millions of dollars.

More about Charles Ponzi's exotic life

Comments

[EJ]

I escaped from a communist nation in 1945 to die in a communist nation,United States of America, it's very sad, I'm 79 years old and can't fight back; the young in this country are ignorant to history. It will doom them.

[ron Whelan]

Our financial system is broke. The solution provided is to increase the circulation of money and spend, spend, spend... that is exactly how we got into this problem.
Communism also failed. All that is left if the Islamic economic system. May be that should be given a go. No interest, currency based on the gold standard and no gambling (that includes the stock exchange)

[Patrick]

An excellent book on the whole Ponzi scam is called 'Ponzi's Scheme' written by Mitchell Zuckoff.
Its an entertaining story, ripe for a film. Ponzi had an interesting background starting off in Italy, then ending up in Canada and eventually in Boston.

[aoc gold]

The entire US government nowadays is a Ponzi scheme, more debt has been created than is even in existence.

Rather than giving people returns on their own money, Ponzi's scheme relied on paying his huge dividends from the "investments" of other people. It is an elaborate pyramid scheme. People are, rightly, shocked and outraged at this scam in the private sector so why does the government get away with it? This is exactly how government pensions policy operates (not to mention Brown's debts and numerous PFI contracts). We have massive unfunded liabilities that will have to be paid for by our children.

[reference]

Try reading some good investment books and you can be the next Ponzi! :)
http://www.2frogmedia.com/Books/details/127863.html

[DWMF]

Jim Lorenz, you're an idiot. I followed your link, and it's a load of paranoid claptrap about the Freemasons. Last time I do that.

Cliques will always form in dark corners of governments and other institutions. The point is to shine the light regularly in all corners, to prevent formation of such cliques.

[Dr. Death]

AH Yes! And they say the Rich get Richer!

[Graham Davies]

"Such short memories here" by Pat C. Yes Pat I agree with you and what a short memory you have as well.
Before the Tories came to power at the end of the 70's, you had the Government of this country kow-towing to the unions and their unrealistic demands. They would have bankrupted this country much faster if they had not been stopped.
There was public spending that was out of touch with reality and civil servants looking at jobs for life once they passed their civil service exams regardless of the quality of their performance or the continuing need for their position. You had an inflationary rate of 26.9 percent followed by the "winter of discontent" in 1979 with the unions demanding more and more and the Labour government scared to back down to the demands.
When the Tories came in they made the decision that a lot of the deadwood had to go which may explain your rancour if your job was one of them, since you remember those days so well.
What needs to be understood is that the same as nature's cycle, there are financial cycles as well. Both cycles will work well on their own until meddling occurs which explains to some part the global warming and also now the morass that countries and people individually find themselves in financially.
When the bottom rung of the property ladder is not attainable by people wanting to look at their first home, you have trouble in several ways.First of all, it tells you that house prices are too high and this then artificially inflates rental prices which then leads on to a boom in "buy to let" which then opens the portals for more credit at giveaway prices.
Also the banks follow up this boom by offering attractive mortgage deals at ridiculous forward rates after the initial "honeymoon" period. Look at the US at what has happened with Fannie Mae and Freddie Mac. This is where, with the banks getting greedy, the entire financial system starts to unravel. And because of the international bank to bank dealings that happened, it just spins out of control. It is in truth like the Plague and still has a long way to go before it diminishes.
The government of the USA was legally bankrupt as far back as the late 1960's. This statement can be confirmed because all governments, to comply with IMF and World Bank regulations, must keep their financial quotas based on three of 1/3's with certain limits. In other words they should keep their cash printed to one third, their paper (government bonds) to one third and their gold reserves to one third. The reason being for this is, regardless of the financial situation, they can back up their cash with bonds or gold, and their bonds with cash or gold or their gold with cash and bonds. So regardless of the situation or "run of the market", this gives the government full stability.
In the late 60's, the USA had 64% of all their finances tied up in cash which meant that a run on either gold or paper would have brought the worlds biggest economy to it's knees. It could still happen now as the US government does not have the gold to cover the massive injection of cash into the market place and now the paper (government bonds) aren't even worth the paper they are written on because there is nothing to support their existance.
I am surprised that some foreign power hasn't already seen this as a way to bring about the demise of the system and the government.
Back here to the UK, we must make a conscious decision that this problem can be overcome. But not simply by throwing more money, that is practically worthless, at a systemic leak that could magnify into proportions of a biblical flood. There must be, to start with, a complete stop of all pay rises and this means everyone, including the financial "fat cats" in any and all ways. There must be a stronger set of regulations in "buying British" because it doesn't do our economy any good to be buying foreign and backing up some other countries economy. All countries are in the same position and it is up to them to decide how they will handle their problem. The banks, which have much to do with this malaise must be brought to rein under a stronger authority in dealing with international investment plans and out-sourcing our money to capitalise on foreign speculation.
We must accept foreign ownership in companies but the foreign owners must also accept that there will be a limit on how much of their profit can be taken away from our economy and repatriated.
These are just a few of the many points we can look at to make this once again "Great Britain". Other suggestions?

[Peter Evans]

Just goes to show that history repeats itself. We learn but then we forget. Ponzi, Madoff, NI they won't be the last. A fool and his money are soon parted. Fact.

[Pat C]

Such short memories in here. Sure Callaghan had problems, as did Carter of the same era.Caused by an oil price hike, the result of the Yom Kippur war. Next we had the idiocy of Reaganomics & his lapdog Thatcher. I suppose we just brush the 5 million unemployed & the destruction of our industries under the carpet. All this was achieved on the backs of North Sea Oil. Thankfully some of us are old enough to remember the Tories. Brown may not be perfect, but he is head & shoulders above anything the brown envelope party has.
We will never allow the Tories to assert their corrupt destructive policies again. So cry away.

[Concerned]

What is the difference between a "Ponzi" and the current "TARP"? Answer: None
There is NO accountability for either one. Not one person can tell me where the TARP funds are being used. We as a nation have given money to organizations that have failed but may, to our demise, continue to behave in the same way as they did before. Sort of a bailout for a "Ponzi" scheme. The answer is to not spend more then you have. Work on being fully and completely out of debt and stay that way. We need a practical solution to our economical future. Not one based on debt and unrealistic loans but, based on real personal economies that exist without debt. Shame on you banks for giving loans to those who shouldn't have them. Shame on you congress for giving money away to those who mis-manage it. We need a nationally funded program that teaches people not to solicite loans but, to create realistic budgets, solicite savings in secure savings vehicles and the advantage of cash payments for purchases. Let's spend some TARP funds on TV and radio advertisement that teaches financial stawardship, rewards individual savings in FDIC insured accounts and cracks down on bad loan practices.

[Paul Ley]

The old saying "follow the money", whilst there were problems with bank lending, most were managable, the exponential oil price increase in the spring and summer of 2008 by speculators when there was no shortage, caused a second unpluggable leak in the system. Oil revenue outflows to pay for Heating Oil,Gas/petrol,LPG butane caused thousands to divert monies from mortgages to daily travel expenses.
We have wasted 36 years since the first oil shock, until we have fully attainable sustainable local power supplies, this will happen again and again and again.

[An Investment Banker]

Excellent comments in general. Yes it is true that Social Security schemes (in the US and the UK) are technically insolvent (ie a big Ponzi scheme), in that it is becoming more and more difficult for the US/UK government to cover its payment obligation to retirees with amounts received from those who work. The difference is that with Ponzi's scheme, the music has to stop eventually. Likewise, the subprime debacle, with the corresponding fallout of casualties like Lehman, Bear Sterns, Northern Rock etc.
On Subprime, there are just too many people to blame. The Clinton administration, for leaning on US banks and US Government Sponsored Entity's - Freddie Mac/Fannie Mae to expand low income house ownership (though the philosophy behind giving poor people greater opportunity to become homeowners is one I agree with). The Fed Reserve, for making credit/the US dollar so cheap to obtain for so long. The regulators, for having concerns about the speed with which house prices (in the UK and US) were rocketing, without doing much to put this in check. Rating agencies, paid by banks, valued securitization bonds on a flawed basis (they effectively didn't account for the housing bubble having more chance of bursting, the bigger the bubble got). Banks are to blame also - big time. They paid the same agencies that gave their bonds the valuation seal-of-approval (a blatant conflict of interest), but also retained the same mortgage risk (in greater concentrations) that securitization allowed them to offload. If I repackage some mortgage assets and sell the securitized bond to you - great, I've offloaded the risk to a willing buyer. If I lent you the money to buy the securitized bond, I've got the risk back in a different form! (Bankers paid themselves twice, btw, in that instance - once for the brilliance of securitization, and again for the loan. And regulators didn't recognize this disguised concentration risk). The banks also securitised everything in sight - including securitising securitised bonds! - on the basis that the bonds could be flogged when they were ready, and valued them as liquid assets (without recognising that other investors/banks, may already have their fill of this stuff).
As culpable as banks are, just behind them in culpability is the average Joe Bloggs/Jon Doe. Why borrow beyond your means? Why be enticed by credit, "pay-nothing-down","zero pc for a year"? Why be fooled by get-rich-quick schemes? If something sounds too good to be true, it's because it's NOT TRUE. Remember that the biggest (legitimate) con-trick in the Anglo-Saxon world....the minimum payment on your credit card.
Maybe governments should ensure that we are formally educated on the importance of debt management and basic personal budgeting/economics for the betterment of society as a whole.

[Tom]

Social Security is the biggest Ponzi scheme in history!

Roll Tide!

[Dennis Butler]

Let's not forget how this all started. In 1999, under pressure from the Clinton administration, Fannie Mae, the nation's largest home mortgage underwriter, relaxed credit requirements on the loans it would purchase from other banks and lenders, hoping that easing these restrictions would result in increased loan availability for minority and low-income buyers (subprime mortgage). Putting pressure on the GSE's (Government Sponsored Enterprise) Fannie Mae and Freddie Mac, the Clinton administration looked to increase their sub-prime portfolios, including the Department of Housing and Urban Development expressing its interest in the GSE's maintaining a 50% portion of their portfolios in loans to low and moderate-income borrowers. Government handouts are always abused and always paid for by the tax payers

[SME]

His efforts were nothing more than a privatized version of the promises of the Socialist governments that now predominate in the world. Compared to the theft by governments both Ponzi and Madoff are petty criminals.

[i-live-2-ride]

This guy must be the hero to evil politicians everywhere. The Democrats recently completed a study where they're deciding how best to sieze control of our individual IRA's and private 401(k) plans. And it'll be for our own good of course.

It irks them something fierce to see all that money that they've had no hand in us putting away, just sitting there behind an imaginary wall just out of their grasp.

Welcome to the nightmare of change that the mindless drone Demonicrat voters have decided our country needs. OUR money, will be CHANGED into their money. Bwahahaha!

http://www.carolinajournal.com/exclusives/dems-target-private-retirement-accounts.html

[Muja]

Ponzi just re-enacted exactly how the monetary System was created in the first place. Only difference was, the original monetary system had King and Country backing so no arrests just keep printing the money lend it over and over again until everyone is in debt, then panic when you realize your in a sinking ship, the same ship as everyone else and you pull out. the problem is everyone jumps outs and dies, this killing the system. There's nobody else left. Congratulations to the crooks that first realized the whole system of money and making it churn!

[Online Stock Trading]

Let's face it - banks and economies world wide are run on Ponzi schemes - nobody cares as long as it works, but at the moment everyone is running around shouting "the Emperor's got no clothes!"

I think we all know that on balance this would of happened with Tory or Labour and while its differcult to stomach Brown will do a better job of handling the situation using some sort of decent keynesian theory instead of cowtowing to public opinion to get into power and then reverting to his public school boy friends Cameron. But I think we should be asking ourselves where is our Obama its obviously something endemic in the system. No one want towards a better 'Britain' , no one knows what it is or wants work want to work towards anything just career politicians like Cameron ploding along trying to keep there own demons under wraps. Wheres the inspiration? Just people who live in bubbles who ride bikes to save the earth or any other bandwagon.. Theres no passionate intelligent people with a plan to let people better themselves or anyone who actually understand any way of igniting that process. Its just layer on layer of bordom and saftest option. Wheres the intelligent person? There just not intrested.

[martin kroll]

clever crafty men manipulate fiat money to seduce the ignorant and fatten themselves. always have, always will.

[Sir Fred]

JOSEPH LYNAM they read the times as well. They know you are onto them, best if you log out and hide behind the sofa. Too late... [knock knock] who's there.. its Sherrie Blair and she wants to talk to you about some property development... RUNNnnnnn

[Faron Kolder]

SOCIAL SECURITY is the Biggest Ponzi Scheme ever exacted upon the amerikan public ... Why is anybody surprised about Madoff ???

[Augie]

The biggest Ponzi scam is social security, pay off old investors with new money coming in.

[GQ]

Now is the time to take inventory of your arms & ammunition. When the time comes that you need them, it will be too late. There may be desperate times ahead and my home is my castle, and we have the right to bear arms. That's all.

[William]

Bankers like Government officials have one thing in common, their parents were married but not to each other.

[Carl-Edward Endicott]

Changing the form of government will not change the heart of the people. Moreover, economic debacles are invariably caused by government regulation and meddling, e.g. the crash of 'twenty-nine, the Depression.

[Scott K. in El Paso]

There are 2 gigantic Ponzi scheme perpetrated by the Federal Government.... 1. This bailout business going on now.. We can't afford it, combined with this foolish "New Deal" part 2 will break the government. It's all going to lead to the complete collapse of the dollar. When that happens you haven't seen hard times like that will create. Some talking head in the Democrat party will explain it away by blaming Bush. These people are so consumed with hatred. The second, and greatest POnzi scheme is Social Security, more is paid out than is collected. The money is not there. People like H. Clinton love to bring up the SS lockbox. NO SUCH thing. She loves to use ignorance of people to her advantage. Obama is a master of this. People better wake up to what the government is doing. It is so hard to believe that elected leaders can be so stupid it's mind boggling. When Obama legalizes Marijuana then the "people" will just stay high, nd not notice all these things he's doing. WAKE UP! it's the most serious thing facing this country in it's history! Other countries see this, and they can't wait!

[jack]

He who doesn't know history is doomed to repeat it. It's ignorance and arrogance that led us here.

[Jim Lorenz]

IMHO, too many of the commentators are discussing some proposed arguments that are diversions from the real issue: Force & fraud in government, or not; that is the question for 2009 and decades beyond.
Please read this information rich summary.

http://www.republicmagazine.com/magazines/Republic-Magazine11.pdf

This is a lot of material to digest, but trust me, it's worth dozens of books you won't have to read to get the gist of this overview; I know, I have read extensively in this area. I have also read all of the material in this link and find nothing that's asserted to be incorrect.
Yes, Virginia, there is a conspiracy. It has been hiding in plain sight since Andrew Jackson (Pres. 1829-37) vetoed the charter extension of the second Bank of the U.S.
This is calm and reasoned discourse. It is not racist or sexist, it is anti-collective, pro individualism and pro Rule of Law.
I'll be glad to take questions.

[getridofwmdnow]

I'd like to be the next one to better Madoff's ponzi scheme of $50 billions. As long as greed in the world, I am sure that I would be able pull it off say 50 years from now? Maybe not me, but someone will come along better Madoff's record say in the tune of $1 trillion dollars.

[Doug]

Just before the crash of the banks, the housing market had already collapsed. A house is priced beyond the mortgage available to a couple of new professionals, say a doctor a lawyer or an engineer, newly qualified times two incomes times three. So they started selling money at four and five times income. This situation was bound to end in disaster. It breaks all the rules of calculating affordable debt against income. When the bottom of the market, the first time buyer, is no longer able to buy into the housing market, then the bottom has fallen out of the market. Surely if a working class oik like me, with no qualifications, can see this, then those who are policing the economy can see it too. Why then are they not in jail and up before the courts? If someone makes a slightly inventive claim for social security, their feet would not touch the ground on the way to prison, as greedy crooks. Why are these bankers not up on charges of usury? And/ or willful misuse of public position, corruption by legal definition I understand. My little bank account actually had money stolen from it by the bank, who opened a ghost account in my wife's name, without her knowledge, transferred a small sum from a defunct debit account, then paid a standing order from it that had been canceled . They then fined the account adding default unauthorized overdraft charges, on an account that has no overdraft facility, at all, (not a current account, but a simple debit account). If I had done that, the police would be at my door for fraud and theft. The hubris of these people amazes me beyond my comprehension.

[Jalama]

This Ponzi guy looks like Obama with a 'stache..

[colin]

Is it a bird, is it a plane, no it's Cash Gordon who has come to save the world from The Credit Cruncher. No feat too small for this superhero who lives on a parrallel world called Prosac; he can wipe out debt at a stroke with more borrowing; end mass unemployment by opening thousands of job centres; no profit at the end of the financial year then just apply for a government subsidy. Pensions and Savings, childs' play, he will abolish the retirement age, in fact just abolish old people full stop. All this and more; stay tuned for the next episode when Cash Gordon makes the world a greener place to live in by printing more and more and more money. Oh Cash you are my hero!

[Kara]

"According to Mr Ponzi, enormous profits can be made by the purchase of diamonds in Italy at 500 lire per carat, which at the current exchange, and with the import duty added, would mean about $40 per carat here, or one-fifth of the actual market value."

Sounds like the current fashion of handing all manufacturing to china, and receive them for a fraction of the price than our own goods, and thus killing our own production, eliminating jobs, and businesses.
And where are the laws against this? Banks are not the sole reason for all our voes. Excess production that replace our own to countries like China has caused much of our distress of that developed into general decline within a few years, that has lead to our financial crisis.

[kirby1]

I have it on good authority that elements in the mafia are extremely annoyed about the current financial crisis.
Apparently many younger members of the society are puzzled as to why they have engage in activities relating to drugs, prostitution, gambling and standover activities, when the realky easy money is obviously in banking and car manufacturing.

[Karada]

The whole problem comes back to detaching the pound from the Gold standard. The Yanks did the same detaching the Dollar from Gold. As a result Gordon Brown was able to print money to fuel the Labour Governments spendthrift ways. Gordon somehow dropped the SPEND bit when he tried to become the thrifty Chancellor. The truth is that if you print money without having any backing it becomes worth just what it is printed on. A piece of paper. It is no longer a promissory note.
The Banks made this worse by trading paper without any backing. Colateralised Mortgage Options, Medium Term Notes, CDs all sorts of paper with no real monetary backing. Building financial castles on sand. There are probably more fake Bank Instruments circulating than real ones. A recipe for disaster and then they run to the taxpayer for assistance.
The Banks have forgotten why they are in business. They think it is not to serve the customer but to make profits. The ad on television about buying the Bubbly for the shareholder's meeting is, unfortunately, all too true. How a Bank can celebrate getting Government money (our money) by blowing £300,000 in a party is beyond belief.

[gasram]

A thought from the working class "F OFF and allow me to get a little return on the 50 years of paying into the system"

[Thorfinnss]

The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.
- Alexis de Tocqueville

[JOHN GURR]

Only one place to go then.
Down.
On knees.
Just as Winston Churchill called this nation to prayer,so we also must turn to the only One who can save us

[Mike]

As Mark Twain said:

History does not repeat itself, but it rhymes.

[Vinny Angelo]

Life will be a "Ponzi scheme," lest our lives be lived for Yeshua.

Both one day must collapse, yet only His guarantees eternal life.

In HIm
Vinny

[Vinny Angelo]

Life will be a "Ponzi scheme," lest our lives be lived for Yeshua.

Both one day must collapse, yet only His guarantees eternal life.

In HIm
Vinny

[joe]

These bankers are over paid egotistical wan..rs.
They should all be stripped of their bonuses and made pay back what they stole.
The middle class is finished, it will be rich and poor once again.
I am now in the poor catogary once again and see no way out, it will take me 20yrs to get outta this mess, it really is bad and the forseeable future is bleak, 2009 will be like 1929 history is repeating and now we have a nutter in russia like hi...r, we know what happened in the years leading up to ww2, just like in Rus, putin is now changing laws and anyone who disagrees with gov will be charged as a terrorist.
What does that tell you, it was foreseen times of great boom then gloom then WAR.

[Some Guy]

As Peter Schiff has pointed out, the existence of the American Securities and Exchange Commission actually helped criminals like Madoff and the Enron executives, because it tends to give investors a false sense of security, assuming that if a government agency says they're OK, then they needn't worry.

The SEC will suffer no consequences whatsoever from their failure to detect Madoff's crimes. Their incompetent "investigators" will not lose their jobs, their budget will probably be increased, and they will continue to pretend to keep us safe.

When I invest money, I want audits performed by a private entity which stands to lose money if they botch the job.

[JOHN GURR]

The Parable of the Unforgiving Slave
Then Peter came to Him and said, "Lord, how many times could my brother sin against me and I forgive him? As many as seven times?"
"I tell you, not as many as seven," Jesus said to him, "but 70 times seven. For this reason, the kingdom of heaven can be compared to a king who wanted to settle accounts with his slaves. When he began to settle accounts, one who owed 10,000 talents was brought before him. Since he had no way to pay it back, his master commanded that he, his wife, his children, and everything he had be sold to pay the debt.

"At this, the slave fell facedown before him and said, 'Be patient with me, and I will pay you everything!' Then the master of that slave had compassion, released him, and forgave him the loan.

"But that slave went out and found one of his fellow slaves who owed him 100 denarii. He grabbed him, started choking him, and said, 'Pay what you owe!'

"At this, his fellow slave fell down and began begging him, 'Be patient with me, and I will pay you back.' But he wasn't willing. On the contrary, he went and threw him into prison until he could pay what was owed. When the other slaves saw what had taken place, they were deeply distressed and went and reported to their master everything that had happened.

"Then, after he had summoned him, his master said to him, 'You wicked slave! I forgave you all that debt because you begged me. Shouldn't you also have had mercy on your fellow slave, as I had mercy on you? And his master got angry and handed him over to the jailers until he could pay everything that was owed.

For nothing is concealed that won't be revealed, and nothing hidden that won't be made known and come to light.

Not my words but someone in much higher authority.

Can we expect the banks to forgive our debts as they have been forgiven theirs?

[woofy]

Gordons amazing
Gold reserves sold
pensions raided
house prices plunging
pound plunging
return on savings nil
tax sky high and going higher
childrens futures ruined
unemployment rocketing
thank you God on

[Gareth]

"QUOTE: Economy was in perfect shape when the tories left power in 1997. Posted by: Chris | 16 Dec 2008 16:09:07

REPLY: You have a selective memory. I might also point out that the Tories had far more income from North Sea Oil, and selling off our public assets, which they wasted."

The North Sea's oil output peaked in 1999, and was very low for the 2 years after the piper-Alpha disaster. Labour had lots of money to waste from this resource, more then John Majors government.

And the north sea gas did not peak until 2003, now the oil supply is dropping 10% a year and gas is dropping 18% a year.

What is the last time this "prudent" labour government talked about this little problem?

Crash Gordon is worse then Bush when it comes to economics, neither has a clue, but crash has fallen back to Dogma to plan his policies.

[Gareth]

Its depressing that so many people seem to think that Brown is their economic saviour.

I'm not actually saying here that the Tories would have done any better, and I actually do not like any politicians, but at least here they are promising to not run up debts massively, unlike crash Gordon.

As for the Tories creating recessions, recessions would have happened with any government, but its government policy that makes the mal investments that are corrected during recessions much worse.

(Hint : BoE ran low interest rates just while house prices were rocketing up, causing the bubble to grow even bigger. Now crash Gordon somehow wants to keep house prices at their currently unaffordable levels. If interest rates (credit = new money) had been priced at market levels then the bubble would have been much smaller).