Former NASDAQ Chairman Bernie Madoff has proven that market corrections are still good.
In an incredible display of total disregard for the money and lives of honest people, Mr. Madoff appears to have pulled off the largest ponzi scam in history. According to some preliminary lists, the fraud includes congressmen, A-list celebrities, high profile mutual funds and banks, charities, and a number of other well known individuals and businesses that are now scrambling to find out how much they've lost, and how they can minimize the damages. He was finally caught by the massive turnaround in the economy, when new money and new participants became more difficult to find. In this new, and tougher, marketplace most of his investors were trying to withdraw funds, rather than add to existing investments. Mr. Madoff, who founded Bernard L. Madoff Investment Securities LLC, appears to have run the scheme for years without incident. So far the estimated total for the scam is around 50 billion dollars. But FBI officials are still sorting out the details of how the ponzi network was organized.
Going back to a man I quoted just a short time ago who wrote at length about market corrections:
“It destroys essentially those companies and industries that live a parasitic existence at the expense of the rest of the economy, and which owe their existence to our present fiat money system.”
- JÖRG GUIDO HÜLSMANN
I think we can say with certainty, that Mr. Madoff was in fact leading a “parasitic existence at the expense of the rest of the economy.” We could say the same thing about Freddie and Fannie, the auto industry, and parts of the banking sector – especially now that they're being propped up. Exposing these goings on is just one more reason to love market corrections. Corrections are good, not bad.
You can find, and download free of charge, HÜLSMANN'S entire essay entitled "Deflation and Liberty" here.
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