This is actually an interesting example of a rather intriguing idea. If the ponzi is big enough, and goes on long enough that it affects the money supply, it will eventually invite a response from the central bank. The central bank will interpret the constricted money supply as deflation, and print. But, instead of reversing the "deflation", this newly-printed money will simply feed the ponzi and cause it to grow.
And, if you think about it, this is exactly what the too-big-to-fail banks did over the last decade or so in the US. They simply took the money that the FED printed for them, and traded it back and forth among themselves in a pointless unproductive game, creating $600 trillion in fraudulent derivatives in the process. When this eventually dried up all the money in the real economy, leading to the crash of '08, the FED's response was to print more money to give to the banks, perpetuating and expanding the ponzi.
But here's the thing, the amount of money the Fed can print isn't a drop in the bucket of that $600 trillion in credit/leverage/derivatives which disappeared in the blink of an eye when the house of cards collapsed. That's what most goldbugs don't get. "Printing money" (Fed buying its own treasuries aka quantitative easing, TARP bailout, stimulus funds, etc.) and credit expansion (isn't happening even at zero interest rates) are two different things.
So the question becomes then, in a way, was the '08 financial crash just another example of blowback? We know that the CIA had a hand in crashing the Soviet economy in the late 80's / early 90's. The failed Soviet economy prompted Mavrodi to develop his ponzi in '94, which was wildly successful due to the widespread economic destruction in Russia at the time. So, perhaps it got the attention of someone who exported it to America? That would give the banks just enough time to begin lobbying for the repeal of Glass-Steagall in '95 in order to address "market realities" by removing the barrier between printed FED money and ponzi investments, enabling US banks to "compete with foreign firms" ie Russian ponzi schemes. This legislative coup eventually succeeded in '99, just in time for the "terrorist attacks" in '01 and the resulting money printing that followed.
The rest, as they say, is history.
So, perhaps there is some truth to Paulson's claim that Russia caused the '08 crash. Maybe he knew more about this than he let on.
Interesting theory, but I wouldn't say his ponzi in '94 was wildly successful. It only lasted 6 months!
Back in February 1994, amid the turmoil of the country's transition to a market economy, the mathematician organized a Ponzi scheme called MMM. He offered returns of 100 percent a month and advertised aggressively on national television. Before the pyramid crashed in July 1994...