Bloomberg/Niall Ferguson/11-20-2022
Cartoon courtesy of MichaelPRamirez.com
“In truth, however, these modern analogies fail to do justice to Bankman-Fried’s rise and fall. To understand what just happened, you really need to go back a century and a half, to Anthony Trollope’s coruscating The Way We Live Now (1875). Inspired partly by the 1866 collapse of Overend, Gurney and Co., the novel describes the ascent and descent of Auguste Melmotte, whom Victorian society hails as a financial genius not because he is one, but because he offers the elite the prospect of easy money.”
USAGOLD note: The anatomy of a scam and how it fits into the long history of such misadventures……Ferguson does not have nice things to say about Bankman-Fried, but what happened with FTX is nothing new in financial markets. “Time and again,” he writes, “share prices have soared to unsustainable heights only to crash downwards again. Time and again, this process has been accompanied by skullduggery, as unscrupulous insiders have sought to profit at the expense of naive neophytes.” And crypto, let us not forget, was promoted with great fervor (and disdain for those who questioned it) as a New Age alternative to gold.
