Do you think financial scams can cause recession?

Asked by: ark200
  • It can cause far worse than recession

    In Albania in 1997, the failure of a pyramid scheme involving the investment of $1.2 billion (about fifteen percent of Albania's GDP) in what was called property investment but was actually a way of laundering drug and arms trafficking profits. When the scheme collapsed, the money disappeared, and it resulted in a civil war in which civilians and the socialist party fought the government forces and forces from the EU. In total, two thousand people were killed, and a further one thousand were wounded or displaced.

  • Such scams draw money from system

    System is like a human body. Money is the blood. Now scam is like a injection syringe inserted into the vain of the body to draw the blood out. Financial scams like that of madoff's draw a huge chunk of money out of the system. That leads to shortage of money in the system. Which leads to reduced purchasing power. That may lead to recession ultimately.

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