Thursday 24 May 2012

The world of Micro-Finance appears to be in denial of a new toxic-debt scandal

From 'The Universal Identifying Characteristics of a Cult' (David Brear, Axiom Books, 2005).

False justification. In pernicious cults, a core-group of adherents can be gradually dissociated from external reality and reformed into deployable agents, and/or de facto slaves, and/or expendable combatants, etc., furthering the hidden criminal objectives of their leaders, completely dependent on a collective paranoid delusion of absolute moral and intellectual supremacy fundamental to the maintenance of their individual self-esteem/identity and related psychological function. It becomes impossible for such fanatics to see humour in their situation or to feel pity for, or to empathise with, non-adherents. Their minds are programmed to interpret the manipulation, and/or cheating, and/or dispossession, and/or destruction, of inferior outsiders (particularly, those who challenge their group’s controlling scenario) as perfectly justifiable.

It has recently been reported that certain well-informed staff in the offices of Grameen America have finally applied common-sense and begun openly-warning potentially-vulnerable clients to avoid  'Multi-Level Marketing Income Opportunities' in general, and 'Herbalife' in particular. However, it was already a matter of public knowledge that a significant number of poor people around the world have been borrowing money from micro-finance institutions (like the Grameen Bank), but then progressively handing their borrowed-cash (which was intended to assist them is starting their own economically-viable, lawful business activities) to 'MLM' racketeers in the deluded belief that, by doing so, they would achieve financial independence. At the present time, due to a lack of full-disclosure by the senior officers of the micro-finance institutions concerned, it is impossible to determine exactly how much cash has been stolen in this way. One thing, however, is certain, this is a growing problem and one which has alarming parallels with the toxic-debt/liar-loans scandal - deliberately hidden for years, before it triggered the current world economic crisis. Anyone looking at this problem with fully-functioning critical faculties, should be able immediately to deduce that micro-finance institutions, in their present (opaque, let's trust everyone) form, could almost have been instigated for, or by, 'MLM Prosperity Gospel' racketeers.

In order to continue to function, 'MLM' racketeers were obliged to hunt outside of the USA for fresh, ill-informed victims to deceive and exploit. For a while, this endless-chain recruitment fraud only worked in developed countries, because victims need access to money to play the self-gratifying 'MLM' game of make-believe. However, parasitic groups, like 'Amway' and 'Herbalife, have been able to feed off developing countries (where the average citizen has neither cash nor credit), because micro-finance institutions have conveniently provided otherwise-destitute people with sufficient cash.

The readers of this Blog should be interested to learn that I have recently been told by someone working for the Grameen Foundation in Washington DC, that he (and apparently his senior colleagues) are fully-aware that  'MLM business/income opportunities,' like 'Herbalife' and 'Amway,' are 'pyramid frauds,' but that the Grameen Foundation has the intention of remaining publicly-silent on the issue. After this astonishing verbal declaration, I sent an e-mail to Todd Bernhardt, Director of Marketing and Communications at the Grameen Foundation in Washington DC, clearly informing him of the hidden menace that 'MLM income opportunity' racketeers pose to all poor individuals, families and communities around the world, and to the very concept of micro-finance. I then asked Mr. Bernhart: Who should be made aware of this important information at the Grameen Foundation? At no point in my e-mail did I suggest that the Grameen Foundation is itself a micro-finance institution directly responsible for making loans to the poor. 

The following is part of Mr. Bernhart's Orwellian response:

'I’m sure my colleagues are concerned about the prospect of poor people being taken advantage of; I think what they might have been trying to explain is how we pursue our mission to empower the poor, and what our relationship is to the various Grameen entities around the world.

Though inspired by the work of Nobel Peace Prize winner Prof. Muhammad Yunus, who helped found our organization and still serves on our Board as Director Emeritus, Grameen Foundation is in no way affiliated with Grameen Bank, the Bangladeshi microfinance institution (MFI) that Prof. Yunus founded in the late 1970s.  We also are not affiliated with Grameen American, an MFI that makes small loans to the poor in the United States. We are not a MFI – we do not make microloans or provide direct financial services to poor people anywhere in the world.

Instead, we work to support the microfinance sector around the world by providing products and services, including access to financing, that help make them more efficient and effective. We also work to empower the poor by providing them with mobile phone-based solutions that help them more effectively take care of their crops, animals, health and finances. These are the areas where we focus our attention, and our work has been very effective.

In the microfinance sector, MFIs are directly responsible for working with their clients, for assessing their creditworthiness and for providing guidance on how to use the funds that they lend them.  In the classic model of microfinance, such small loans should be used for productive, income-generating activities, and the vast majority of MFIs give this guidance to their clients, who typically follow a group-lending model where all five people in a borrowing group are responsible for each others’ loans.  Ultimately, however, it is the individual client’s responsibility to use their funds in a responsible manner, to ensure that they are able to pay back the loan they’ve taken and can continue to take out loans from the MFI.

As a non-profit organization, we constantly have to make decisions about how we can best use our limited resources to most effectively empower the poor.  We focus on the strategy spelled out above because we believe this is the best way to do the most possible good with the limited resources we have.  We do not communicate directly to poor people about multi-level marketing and other schemes because there are already many sources of information about these schemes out there, and we believe that people in the developing world – the people we are trying to help – already have access to this information.'

Thus, the 'Director of Marketing and Communications' at the Grameen Foundation has claimed his organization to be 'on a mission to empower the poor,' but in complete contradiction of his written statement (and of his own job description), he then says that he and his colleagues do not communicate directly to poor people, because they believe that poor people already have access to many sources of information. Unfortunately, 'knowledge itself is power,' and (by the same token) ignorance is vulnerability. 

Meanwhile, in the adult world of quantifiable reality, countless millions of poor and vulnerable, potential 'MLM' victims in developing countries, remain ignorant of the fact that more than 50 years of evidence (in the form of an almost total lack of payment of income tax), proves that, in practise, it has been impossible to generate an overall net-income lawfully by participating in a so-called 'Multi-Level Marketing business/income opportunity.' This, in theory, would involve regularly selling effectively-unsaleable 'MLM' products, and/or services, directly to the general public for a profit. Indeed, no one seriously diputes that (other than an insignificant minority of schills at the top of 'MLM' pyramids) the hidden overall loss/churn rate for all so-called 'MLM income opportunities,' has always been effectively 100%. Any micro-finance institution which has lent money to poor clients knowing that that were under the malign influence of 'MLM' racketeers has, in fact, been participating in a cruel fraud. Surely, years ago, the senior staff of micro-finance institutions must have spotted the glaring red flag that loans to would-be 'MLM' millionaires, never get repaid.

'Prosperity Gospel' cults like 'Amway' and  'Herbalife' have been deliberately designed to shut-down the critical and evaluative faculties of not only their victims, but also those of all casual observers. To the average person, famous people, like Madeleine Albright and David Beckham cannot possibly be associated with a racket, but when you have billions of dollars, it is possible to buy just about anyone (particularly, in the USA). Thus, Mr Bernhart's apparently genuine belief that poor people already have access to information about 'MLM' schemes, is revealed as being naive to the point of crass stupidity; particularly, when you know that 'MLM' racketeers have invested many millions of dollars of their ill-gotten gains in keeping the world ignorant of quantifiable reality in order to preserve and peddle their profitable, and pernicious, fiction as fact.

(Whilst watching this deceptively-kitsch video of the 'Amway' version of the 'MLM' Utopian fairytale,, keep in mind that the quantifiable evidence proves beyond all reasonable doubt that, since 1959, tens of millions of individuals around the world have been churned through the so-called 'Amway MLM income opportunity' whilst the actual, hidden net-profitability rate for so-called 'Amway Independent Business Owners' has been effectively-zero). 

Mr. Beckham is a personality who, although extremely wealthy, is not exactly noted for his intellectual capacities, but, in the case of Ms. Albright, it is difficult to believe that someone with her background and achievements can have fallen for a 'capitalist' adaptation of the age-old totalitarian/Utopian fairytale. Surely, she must have read George Orwell's 'Animal Farm.' Consequently, I am publicly asking Madeleine Albright the following, common-sense question (to which the only truthful answer is: 'none'):

Exactly what quantifiable evidence have you seen which proves that a significant number of people have actually earned an overall net-income lawfully from regularly retailing 'Herbalife' products to the general public for a profit?

However, it shouldn't be me asking this question of Madeleine Albright, it should be law enforcement agents.

Self-evidently, the recruiting, and/or co-opting, of celebrities and opinion-makers, for the purpose of promoting/hiding fraud, is one of the oldest, thought-stopping cultic tricks in the book. In respect of 'MLM Income Opportunity' fraud, this propaganda by association clearly forms part of an overall pattern of ongoing major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970).

For all poor persons who have been persuaded to invest their money, time and effort in the exploitative cultic racket known as 'MLM,' it has been the same as buying, and getting others to buy, monthly-tickets for a fake lottery fixed so that no one (except the handful of manipulative crooks who organized it) can win. The minority of apparent 'MLM' winners have all steadfastly pretended to have achieved a form of secure Utopian existence ('total financial freedom') by exactly duplicating the 100% positive attitude and behaviour of their own leaders, and by following a proven plan of recruitment and self-consumption. In reality, the bulk of the cash generated by 'MLM Prosperity Gospel' racketeers has derived from their peddling countless millions of effectively-valueless publications, recordings, tickets meetings, etc., on the fraudulent pretext that these exclusive materials are vital to achieving success in 'MLM.'

Because they have been deliberately set up to generate, and to hide the fact that they have had, no significant or sustainable retail sales to the general public, all so called 'MLM Income Opportunities' have been dissimulated closed-market swindles without any real source of revenue other than that deriving from their own constantly churning losing-participants.

Apparently, it has not been in the interests of micro-finance institutions to make a full-disclosure of their 'MLM'-related losses, because these institutions depend on maintaining their clean image in order to keep acquiring donations. Unfortunately, at the present time, any person or body of persons, making a cash-deposit with a micro-finance institution (certain that they are helping to empower the poor), risks their 'donation' winding up in the bulging pockets of billionaire 'MLM' racketeers.

David Brear (copyright 2012)

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