The Biggest Ponzi Scheme on the Planet-The U.S. Government
"American Economic Exceptionalism Explained"                     USAPonzi                                      by John W. White   Mar 29, 2013

Open Letter to Financial Experts
Why the Stock Market is going UP!
$98.1 Trillion of Counterfeit Money!

Oct 13, 2014
As posted on


This is an open letter to the "Financial Experts" that are predicting a continuing bull market in equities.  I hear the "Financial Experts" on TV and in their Newsletters confidently stating that the stock market is the place to be investing right now and that "There Is No Alternative" (see The TINA Economy).  They say that this is because interest rates on bonds are low, the stock market offers dividends that in many cases exceed the interest on bonds, and the asset price appreciation for stocks is unmatched by most other asset classes.  They also cite economic weakness in Europe, China, and emerging markets and economic strength in the United States as the reason to be investing in U.S. equities right now.   While I do not disagree with this rationale, I feel that most of these "Financial Experts" do not understand or at least do not verbalize the real reason why the U.S. Stock Market appears to be the most attractive investment opportunity right now.

This commentary will explain why the stock market is continuing to go up and why U.S. stocks are projected to be the strongest performers over the next few years.  The simple answer is that the U.S. Government is running a massive Ponzi scheme (USAPonzi) and as long as the U.S. Government continues with the current fiscal policy AND the investors stay committed to USAPonzi, U.S. equity prices will continue on an exponentially increasing and unbounded upward trend.

USAPonzi is caused by the U.S. Government spending and committing to spend much more than the U.S. Government is collecting in tax revenue with the expectation that the future taxpayers will be able to make up the difference (see Introduction to USAPonzi).  The U.S. Government is promising, and currently paying, social benefits that greatly exceed the U.S. Government's financial capability.  Furthermore, the U.S. Government has been using a corrupt and fraudulent accounting methodology since FY1969 to mask the degree of overspending and overcommitting that the U.S. Government is incurring.

The U.S. Government is using Cash Accounting rather than the appropriate GAAP Accounting and as a result has been covertly incurring exponentially increasing GAAP basis Deficit Spending that has been stimulating the U.S. (and Global) economy at an accelerating pace for the last 46 years.  This has created a public financial commitment (GAAP Obligation) of $98.1 Trillion as of Oct 1, 2014 that is supposedly to be paid for by the future taxpayers (see USAPonzi Fiscal Model).   However this GAAP Obligation is increasing by $6.94 Trillion in FY2015 which is more than twice the amount ($3.1 Trillion) that current taxpayers are projected to pay in FY2015 and therefore the future taxpayers have no possibility of ever paying this exponentially increasing GAAP Obligation of now $98.1 Trillion.

This $98.1 Trillion GAAP Obligation was created by undertaxing the current U.S. citizens and businesses and passing this financial liability forward to the future taxpayers.  This simple little accounting trick of using Cash Accounting rather than (accrual) GAAP Accounting, pulled by LBJ and the 90th Congress for the FY1969 budget, has created $98.1 Trillion counterfeit dollars that have been awarded to the current and previous U.S. citizens and businesses as "unpaid taxes".   But these "unpaid tax dollars" are obviously counterfeit since the liability for the associated financial commitments (Federal Debt plus Unfunded Liabilities) has been left to future taxpayers that are not capable of paying these commitments.

$98.1 Trillion of Counterfeit Money

As a result of this fiscal policy, the U.S. (and global) economy now (as of Oct 1, 2014) has $98.1 Trillion of counterfeit money in circulation and the U.S. Government is creating $6.94 Trillion more counterfeit money in FY2015; $578 Billion every month and $19.0 Billion every day.  This counterfeit money is created by GAAP basis Deficit Spending which is also providing a massive stimulus (47% of FY2015 GDP will be created by this stimulus) to the U.S. (and global) economy (see U.S. "Real" GDP FY2015).

This massive stimulus to the U.S. (and global) economy is what is causing the U.S. (and global) equity markets to appear to be performing so well.  This stimulus has been occurring for the last 46 years at an accelerating pace (see U.S. Total Assets Bubble) and will continue as long as the U.S. Government continues to operate USAPonzi (by using Cash Accounting rather than GAAP Accounting) or until the investors in the global equities markets finally recognize and acknowledge that this is in fact a Ponzi scheme.

The "Financial Experts" are focused on the Federal Reserve Bank (The Fed is not the Problem) as the reason that the stock market appears to be in a bull market, when it is really the U.S. Government that is causing the stock market to be in a massive (nominally 7X) asset bubble (see U.S. Total Assets Bubble).  The counterfeit money created out of "thin air" by USAPonzi is causing U.S. citizens and businesses to appear to be very wealthy and U.S. businesses to appear to be very profitable and valuable.

The U.S. Government has created $98.1 Trillion of counterfeit money since FY1969 and is creating $19.0 Billion more every day.  That is what is causing the stock market to go up.  The actions of the Federal Reserve are just a monetary response to the fiscal irresponsibility of the U.S. Government.

The U.S. Government is creating counterfeit money at the rate of our GAAP basis Deficit Spending which is systematically transferring counterfeit money from future taxpayers to the pockets of current U.S. citizens and businesses.  By simply not taxing current U.S. citizens and businesses enough ($98.1 Trillion) to cover our cash expenditures (now our Cash Debt) and to fund our social benefit trust funds (now our Unfunded Liabilities) the U.S. Government has appeared to make U.S. citizens and businesses $98.1 Trillion wealthier.   U.S. Corporations, Small Businesses and Households hold assets that are valued by at $112.3 Trillion as of Oct 1, 2014 but $98.1 Trillion of that value is the counterfeit money created out of "thin air" by USAPonzi and its 46 years of GAAP basis Deficit Spending.

USAPonzi is 2000X larger than Madoff Ponzi

That is why the U.S. stock market appears to be the best place to be investing right now and for the same reason that investors placed their money with Bernie Madoff.  The U.S. Government is operating a massive Ponzi scheme which I have named USAPonzi.  Bernie Madoff claimed that his was a $50 Billion Ponzi scheme and USAPonzi will be a $100 Trillion Ponzi scheme, as measured by our GAAP Obligation, by February of 2015.  The USAPonzi fraud is 2000 times larger than the Madoff Ponzi fraud!!!

The 46 year long bull run in the U.S. Stock Market will continue as long as the U.S. Government continues to operate USAPonzi AND as long as investors keep their counterfeit money invested in this massive ($100 Trillion) Ponzi scheme.  However when USAPonzi implodes, this counterfeit money will vanish into the "thin air" from whence it came and the stock market could drop by as much as 85-90% (see U.S. Total Assets Bubble) and economic activity could be nominally cut in half (see U.S. "Real" GDP FY2015).