Ciaran’s Peculier [sic] Blog

I often dream of launching an alternative to the Nobel Prize for Economics. It would be for the person who has had the most long-lasting effect on the economic lives of the world’s citizens. My own nomination might seem surprising. Would it be John Kenneth Galbraith? No. John Maynard Keynes, no; Milton Friedman – wrong again. No, the prize would go (posthumously) to Carlo Ponzi, the Italian American who gave his name to the notorious Ponzi scheme, better known perhaps in western Europe as the pyramid scheme, which still attracts gullible investors and then fleeces them throughout the world.

Put simply a Ponzi scheme offers you huge returns on a very small initial investment. It is usually based on a rather dubious financial base. As the initial sums are small it usually attracts the small investor, especially in the Third World, who often invests all their savings in the hope of emerging from a life of drudgery and penury. The Ponzi scheme inevitably collapses, leaving investors with nothing, but those who have set up the scam in the first place escape in the nick of time, usually with large sackfulls of cash. As these schemes usually occur in countries with dubious regulatory regimes it is often felt that the people behind them are in cahoors with powerful people in government.

Ponzi schemes have affected countries like Albania Yeltsin’s Russia and Tajikistan, though one operated for a while in the dear old Romish Republic, but it was kind of hushed up because those who were stung were too embarrassed to admit they’d fallen for such a scheme.

I’ve written a book about them, with my friend Gerry Griffin. It’s called Fools’ Gold: Cautionary tales in Greed, Speculation and Delusion. It is still available through Amazon.com. It ends with the pithy aphorism: “If a scheme seems too good to be true, it probably is.” You’d think that people would have copped on to these schemes by now. They are so familiar and follow the same pattern. The latest one has hit Colombia. One of the dubious companies behind the scheme is called DRFE. It like numerous other “investment companies” had been promising gargantuan returns on piddling initial investments. It is thought some of them have been laundering narco-money. AAnyway the bubble’s burst leaving thousands of angry investors with sweet FA. They have responded by storming the investment companies’ offices. In the city of Pereira in south-western Colombia some company employees were caught by the police leaving through a back entrance with suspiciously heavy suitcases. They were taken into custody for their own protection after having offered one of the suitcases to the police.

Some of those behind the scams seem positively gleeful about how they were able to get away with it. In the town of Santander de Quilichao about 50 km from Cali people looking for their money back found the following note pinned the the company’s door:

Now for being stupid and believing in witchcraft you will have to work much harder to recoup the money you gave us

while the door of another investment company office had an early Christimas card, wishing investors “a sad Christmas and a shameful New Year.”

The Colombian government has expressed horror at what has happened, but apart from sending in troops and riot police to stem the investibale crowd trouble have done nothing. The vice-president, Francisco Santos has said: “Nothing is free in this world and that is not going to change.” (unless of course you’re a member of the Colombian congress, when pretty much everything is free).

Scientists in Mexico’s National Autonomous University have succeeded in making synthetic diamonds from tequila. The diamonds are too small to be made into jewellery, but they can be used in industrial applications, such as the cutting edges of medical devices. They can also replace silicon in chips. And the good news is that they can be made from the cheapest and nastiest brands of tequila available. I wonder whether you can do the same with poitin or my own favourite tipple, methylated spirits?

I see that the leader of Chile’s notorious Caravan of Death, Gen Arellano Stark and five of his underlings have received jail sentences for the extra-judicial killing of people whose politics they didn’t like during the rule of Augusto Pinochet.

The Caravan of Death was like a mobile execution squad who went up and down the country seeking out victims whom the authorities were just too squeamish to wipe out themselves. Their actions were known to Pinochet, the man with whom the former British Prime Minister sipped tea and ate cake. If only she had been able to use the Caravan of Death against the miners, the Militant Tendency, Irish terrorists and their synpathisers in Eire and the CND.

Of course, here in leprechaun land General Pinochet had a considerable fan-club, especially amongst those who were on the way to doing God’ s work. True, he had murdered a democratically-elected president and murdered hundreds, if not thousands of innocent people, but hadn’t he saved Chile from “Godless communism?” The fact that Salvador Allende (pronounced Ayende or Azhende and not Allendy as some conservative politicans believed) was never a communist, or that he had the support of many members of the country’s hierarchy, is forgotten. Pinochet’s supporters point to the fact that when he survived a leftist assassination plot the bullets left the impiression of the Virgin Mary on the car window. They point to the extraordinary economic success enjoyed by Chile thanks to Pinochet, but that ignoramus knew nothing about economics; any economic success was the work of technocrats like Buchl the finance minister.