0
   

How is capitalism like a Ponzi scheme?

 
 
Reply Thu 7 Nov, 2019 03:46 am
I made a post a while ago and people responded by telling me that modern capitalism is similar to a Ponzi scheme. Can you explain this? Is it because it relies on constant growth? And why is that?
  • Topic Stats
  • Top Replies
  • Link to this Topic
Type: Question • Score: 0 • Views: 58 • Replies: 4
No top replies

 
engineer
 
  2  
Reply Thu 7 Nov, 2019 08:05 am
@ThomasTheApe,
The people who responded to you have a certain point of view that doesn't jive with reality. Please remember that this is the Internet and opinions are cheap and not always worth even the minimal investment necessary to post them.
ThomasTheApe
 
  1  
Reply Thu 7 Nov, 2019 10:23 am
@engineer,
Ok. So are there any conclusions to be drawn between corporate debt levels and corporate profits? I'm just looking for any type of indicators of where we're at in the business cycle.
engineer
 
  1  
Reply Fri 8 Nov, 2019 09:03 am
@ThomasTheApe,
I think you look at the overall return of the company based on its valuation. Debt service is an expense. As long as that expense is being covered and the corporation is generating a good return, there is not really an issue. It's when the overall return starts getting weak that you have issues.
ThomasTheApe
 
  1  
Reply Fri 8 Nov, 2019 02:40 pm
@engineer,
So basically the P/E ratio? But wouldn't that be flawed by incorrect market valuations?

What about Return on Capital Employed?
0 Replies
 
 

 
  1. Forums
  2. » How is capitalism like a Ponzi scheme?
Copyright © 2019 MadLab, LLC :: Terms of Service :: Privacy Policy :: Page generated in 0.03 seconds on 11/13/2019 at 07:54:47