Planet Ponzi

by Mitch Feierstein

The world economy is now approaching the final death rattle of the greatest Ponzi scheme in history: a scheme in which politicians stood by as the financial industry and sovereign governments created a vast overhang of debt, a mountain of low-quality assets - and laid the foundations for an economic disaster which will dwarf any other in history.

There are four possible outcomes for our future:

* economic growth (unlikely)
* stagnation (probable)
* inflation (bad)
* default (disastrous)

Which of the four it will be depends on choices that are being made right now, not always wisely, by politicians, technocrats and bankers.

Planet Ponzi is a provocative assessment of the state of today's global economy. Mitch Feierstein reveals the true debts of Britain, the US government and the eurozone - the full picture, not the figures the politicians would have us believe.

In Planet Ponzi, Feierstein explains clearly the background to the world's worst financial crisis for seventy years, predicts the next steps in this infinitely dangerous game and offers practical advice on measures which you personally can take to protect yourself and your family.

Genres: Economics, Finance, Business, Nonfiction

384 pages, Hardcover

First published February 1, 2012

Reviews

[Jim · Rating 5 out of 5]

Having read quite a few books on the financial crisis, it’s good to come across one written by an insider that positvely seethes with anger at the mess we’re in and lays the blame firmly, fairly and squarely at the foot of the bankers and politicians. When I consider what has happened in the financial community since the first run on Northern Rock, I am just aghast that we, Joe Public, are not down in the City tearing down the blocks of the banks in the way that the people tore down the Berlin Wall when Communism fell. But, as Fernstien contests, perhaps that day of reckoning is still to come because we’re not out of the woods yet. In fact, we’ve hardly even tiptoed our way in to the depths of a dark and dangerous forest.
In many ways this is a pretty scary book. For those of us not involved in high finance, the combination of jargon and the size of the numbers involved is difficult to grasp. Fernstein tries to simplify things, but the size of the financial tsunami created is like trying to conceptualise the distance between the planets and stars. We know it’s big, but what does it really mean for us? Fernstein is relentless in his pessimism when he looks to the future (despite his continual protesting that he is actually an optimist). Think you’ve got a fairly safe private pension coming? Think again. Think your ISA’s, ETF’s, PEP’s and cash deposits are safe? Think again. But at least you’ve the equity in your home? Think again. Okay, but I’m welfare dependant and will be looked after by the State? In which case you need to really, really think again. Buy tins of catfood now while you can still afford to, because that’s what you’ll be eating on the State pension in the future.
At the end of the book it’s difficult not to find yourself biting your nails. Maybe that’s Fernstein’s intention – people need to be scared into taking action over the mess we’re in, if anger and disgust aren’t enough to do it. Take responsibility. Demand that your elected politicians start doing something against the vested interests of the financial community. And take steps to protect yourself financially as much as you can. This is a sobering but always interesting read that will make you think hard about the future (albeit rather pensively!).

[Nick · Rating 2 out of 5]

Disappointing, good in parts but too many flaws to make it too credible. eg when discussing losses to mortgage providers he ignores any equity a borrower may have and assumes that a 25% fall in house prices would equate to a 25% write-down in those debts. Clearly not the case. There are many other examples of either weak analysis, or statement or conclusions that are just plain wrong.

However, there are some interesting points. But most of these will not be new to people who have read around this subject. The scale of unfunded govt promises is indeed shocking. And some of the numbers bandied around are staggering, but that are not all plausible.

Interesting to a point, but there are many other better reads about the current state of the financial world. I'd give this a miss.

[Phillip Legard · Rating 4 out of 5]

A very entertaining read, if you want to enter the very plausible scenario of financial Armageddon! Unlike some authors, Mitch manages to keep his sense of humor intact throughout. The conclusions are most worrying, and really it's a race to the bottom as to which of the big currencies is going to die first.

[Juraj Mucko]

We're doomed. Greed and deceit are not just local phenomena or attributable to individuals. Whole countries and the whole world is living a lie. Something must break.

[Jo Murphy · Rating 3 out of 5]

I don't think the guy knows much about politics - but as a hedge fund manager he does understand the market. The book breaks down what he describes as Planet Ponzi - that the entire economic system is one enormous financial fraud - and that we are living in the biggest bubble in history. The book has lots of facts and figures which demonstrate quite clearly how bankrupt the US and most countries in Europe are. His formulation of the concept of Planet Ponzi helped me understand why/how denial of the current problms facing us is so widespread. Although he predicts that an entire economic collapse is the only outcome, he is positive that capitalism can only be fixed following it's complete breakdown. He does make you think that things just might be alright - but as he himself admits he takes a very conservative view. An update in 2012 basically says it's the same only worse. So in short here are the 7 pointers to identify if we are living on Planet Ponzi - 1)Rapidly mounting debt 2) Bad assets 3) Deceitful accounting 4) Toothless regulators 5) A get-rich-quick culture 6) Lazy investors 7) Self delusion.
Sound familiar?

[Scribe · Rating 4 out of 5]

Finished a few months back, but forgot to update. Good reading material for anyone interested in how national and personal debt are influential in the current state of the economy. As with any book like this, the later you read it the more out of date it is, but found this very accessible, and invaluable for understanding ongoing financial news stories.

Mostly US centric, with some parts touching more on UK (fairly complimentary, which was refreshing anyway?) and moreso on the EU (less complimentary).

A few things I found myself looking up, but most of the stuff in here is explained well and easy to get to grips with if you have an economic interest to begin with.

[Tom · Rating 5 out of 5]

this book isn't about casting blame on R or D. he gives it to both of them equally. he even has some choice words for the Tea Party. tremendous read if you are interested in finding out how we've gotten into this financial mess and pragmatic steps to reverse course without any political spin.

it was very educational, but I have my doubts. our elected and unelected officials are addicted to money and power and will do just about anything to retain both. buckle up, America.

[Gina Wing · Rating 4 out of 5]

I waited too long-

By the time I read this book (4yrs after publication) much of the future projections were already known. Most were accurate though.
I enjoyed his writing style. Technical issues were explained well.
The world is financially worse as predicted by the author.
Brexit is upon us now. He predicted the outcome. I'm not a dooms day advocate but this took clearly explains that we have no options left that won't be painful.

[Erik van Berkum · Rating 4 out of 5]

Very nice and catchy written, easy to read. Great book with some very simple capitalist solutions in the end. Enormous amount of data to support his points.
Lessons learned Too big to fail too big to exist. No more bail outs only bankruptcies please. Failure to do bankruptcies, creditors will not learn the lessons.

[Warren Gossett · Rating 5 out of 5]

I like the author Mitch Feierstein's concept that we should be moderate in our demands and expenditures and pay our debts. If governments have a poor record of achieving this, that should only limit but not prevent our efforts to achieve financial moderation and stability in our individual and private finances.

[Daniel · Rating 5 out of 5]

Honest, scary, and generally excellent. He does not touch much on the causes of the irrational risk taking that took place before the financial crisis, but is excellent on describing the behavior itself.

[John · Rating 4 out of 5]

An excellent book about the current and coming crisis. Almost as scary as any honest book ought to be.

[Alanmoorenz · Rating 4 out of 5]

All very true and very scary!