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January 28, 2020 | Guggenheim Co-founder: Fed has Created a ‘Ponzi’ Market

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

Scott Minerd, Guggenheim Partners co-founder and Guggenheim Global chief investment officer, discusses his concerns about rallying asset prices.  Here is a direct video link.

It is rare to hear financial establishment heads admit the truth about the present market cycle.  As we consider Scott Minerd’s comments, it is important to appreciate what Ponzi schemes are and how they must end. Here’s a classic definition courtesy of Investopedia:

“A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for early investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers. Both Ponzi schemes and pyramid schemes eventually bottom out when the flood of new investors dries up and there isn’t enough money to go around. At that point, the schemes unravel.”

Ponzi schemes are a mirage, they are not investing, and participants are not smart or savvy, they are victims.  At the same time, their greed, wishful thinking and willful blindness make Ponzi victims complicit in their own demise.

Those holding savings in stocks and corporate bonds, or ETFs and mutual funds of them today, are not in ‘different’ or more ‘conservative’ markets.  They are in the largest ‘Ponzi’ scheme of all time.  Eyes wide open.

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January 28th, 2020

Posted In: Juggling Dynamite

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