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26 Oct 2022  (516 Views) 
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International economy


Is the USD a ponzi scheme?
A ponzi scheme promises a high return, but is not backed by actual earnings. It gives a high return by taking the money from the later investors to pay the earlier investors. 

The USD now gives a high return. The US government does not collect sufficient taxes to pay the return. Instead, it prints more money and uses it to pay the earlier debts. 

In this respect, the USD operates like a ponzi scheme. 

It is like bitcoin. Bitcoin runs up in value to a high of $65,000. It has since dropped by 70% and is now trading below $20,000. 

There is a counter argument. The USD is backed by the US economy and the assets of the country. So, it is not a ponzi scheme, which is backed by nothing. 

What do you think?

Tan Kin Lian

 


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