What really happened at Vaz' auto store today?

[Don1]

Again you don't seem to have a grasp of macroeconomics... Ponzis are akin to transfer payments ie no value is created by these transactions

It is virtually impossible for Ponzi schemes to cause any significant reduction in poverty...in fact Ponzis tend to exacerbate poverty as the beneficiaries are the 5%-10% at the top of the Pyramid...all the rest are losers

Any positive economic spinoffs from the income accumulated by the "winners" are more than negated by the income contraction of the "losers"

[Assasin]

you have no idea what you talking about. It will inject short term wealth to some individual and gives false security so people think they have disposable income. You have any idea how many cars had to be returned etc because of the closure of these PONZI? In a country with Jamaica with a small GDP when you have so many Ponzi schemes it must affect the macro economy. On top of that many people in the Diaspora was joining it and pumping money into it. Not to mention the real assets that these schemes bought.

If you say it had no effect on the economy you have no idea about economic, and you clearly show it by asking how poverty decrease while our debt baloon and production decrease.

[Don1]

At no point do Ponzis have a real net positive econ effect... at any point in a Ponzi ~ 90% of people will be out of pocket. You are concentrating only on people who have net positive cash flow from the Ponzi who may have conspicuous consumption... ie the fortunate 10% ....while ignoring the depressed income/assets of the out of pocket majority who will tend to depress consumption & spending.

Pls google the definition of transfer payments before further response

[Assasin]

The fact is with most Ponzi scheme the people who invest early get money back and this was contining. People invested 10,000 and the first few months they get back 1000 dollars per month. They think they have capital and the 1,000 dollars is disposable income so they go out and spend it. They will lose their capital but(even though they don't think so) in the SHORT TERM they think they have income coming in. Ask any investor in any of the ponzi scheme and they will tell you they think the money they get is INCOME from investment.

Are you telling me that Madoff had no positive effect for any of the investor over no period of time?????? Think again, stop reading and use some common sense.

[Don1]

Yours is the type of reasoning that comes from getting an understanding of economics from reading the Gleaner or Observer.

Try to understand what is meant by NET effect. Those few with positive cash flow will cause a positive econ effect.

The majority with negative cash flow will make that positive effect null by reducing spending. Since there is zero value traded in a Ponzi because there is no underlying asset to create real income...at no time does the cash return exceed the input.... money is merely recycled.

It's not about common sense... it's really mathematics

[Assasin]

the fact is money recycled put more money in the economy = more spending. That is basic economics and if you don't understand that you don't understand anything about economics.

The more disposable income you have the more people spend. Simple.
From high school to Grad school I have got nothing but A in economics so don't tell me about my knowledge of Economics. I tutored econ in college to College athlete when I was in college and got the best result from some of the students.

My grades are there to show. I have my records. Fresh, bout man learn econ from gleaner and observer.

I don't come on here to talk about my knowledge but don't challenge. Grateful for what you have but don't think others have none because your opinion maybe different.

[Willi]

Could I turn it around and ask you to explain where this drop in poverty rate came from and what money sustained it to 2007.

This would better enhance mutual understanding.

[Willi]

In the long run, but not during the run of the scheme. "Investors" dont know they have lost their principals any more than Dot.com fools did. They either have current income or paper capital appreciation to sustain their fantasy ... until financial reckoning day comes and the crash ensues.

It is a kind of behavioural heuristic, you think you are sitting prettier than you are and act accordingly. Thus (over)consumption is promoted and the spinoff effect on society is "nice".

[Willi]

YES!!!

Nobaddy aggo hide and speak.

[Willi]

I dont know but perhaps the NATURE of the flows have changed. Not all of it is destined as a gift to Aunt Ettie!

If that component has dried up substantially, then yes people will be pushed below the line.

The fact that you mention the last 3 years shows that SOMETHING changed then and the elephant in the room is what?

[Willi]

Neither one, dem both concentrate on gaining and keeping power!

[Don1]

I don't have the data to explain that.... but I cannot believe it is Ponzi schemes. I think remittances are definitely a factor but cannot on their own explain the phenomenon..... the remittances would have had to more than double over the period to support that thesis...and that's assuming all remittances go to people below or near the poverty line... which is not the case

I think the World Bank funded PATH & Jamaica Social Investment Funds have had an impact on poverty.... plus I believe the methodology used to compute poverty was revised to capture actual consumption rather than a strict measurement of reported income... a consumption index would better reflect unreported earnings from the huge underground economy..

[Willi]

Unfair.

These were clearly not your Daddy's Ponzis. Ponzi is now a generic name for any samfie finance scheme. These schemes have a longer shelf life if they have laundered money backing them, as they have a longer shelf life in paying out dividends and keeping the illusion going.

Another thing that can inflate the economy is loose credit. Easy money has been inflating the US economy for years and Greenspan was a hero for years, even as he poisoned the body economic of the once great United States of America.

[Don1]

Don't mean to demean your knowledge...but you did say I don't know what I'm talking about...yes? I don't take umbrage fi dat... not that thin skinned

...recycled doesn't mean more money in the economy because Ponzis don't create value... it just means money is redistributed

[Willi]

So essentially the index is unreliable!

I mean, debt balloons and the index cuts in half in 3 years??? Hmmmm

Unless Gelding tiefing money hand over foot and is now richer than M'Buto at the height of his reign, how you explain more money coming in poverty skyrocketing? Mi nuh see even big Brown man dem a live lavish like before...

When people did think dem flush, they consumed like never before and the velocity of the money ripped thru the economy and everybody did "nice".

Now things are tight all ova!