How does the 'Herbalife/MLM' bluff function?

Bill Ackman

As has been recently reported on this Blog, the bosses of the 'Herbalife' racket have been bluffing and on December 20th, 2012, hedge fund manager, Bill Ackman, called their bluff by revealing his holding of a short-selling position involving around $1.2 billions of 'Herbalife'  shares. However, at the same time, Bill Ackman laid on the table his own winning-hand by publishing a detailed analysis of why he considers the legally-registered corporate structure known as 'Herbalife' to be the front for a vast and damaging pyramid fraud and, therefore, effectively-valueless. He also declared that all the profits he will make from this tainted deal will be handed over to charity.  

'Herbalife' racketeer, Michael Johnson.

The laughable, but predictable, reaction of 'Herbalife' boss, Michael Johnson, was to continue his bluff- steadfastly pretending innocence whilst accusing Bill Ackman of cheating in order to make money. http://www.guardian.co.uk/world/2012/dec/21/herbalife-ceo-ponzi-scheme. Yet neither Michael Johnson, nor his previously-aggressive echelon of attorneys, have been able to refute Bill Ackman's published analysis of 'Herbalife' by providing quantifiable evidence which would prove that the alleged 'lawful Herbalife MLM income opportunity' has generated any significant, and sustainable, revenue other than that deriving unlawfully from a never-ending chain of millions of losing investors around the world. This is because, for decades, the bosses of  the 'Herbalife' racket have been riding on the coat tails of the 'Amway' racketeers - operating a dissimulated closed-market swindle (right under the noses of regulators and financial journalists), in which they have been laundering billions of dollars of unlawful, losing investments based on the false expectation of future profits, by falsely-declaring these payments as lawful sales based on value and demand.




Yet if readers watch this video(http://www.youtube.com/watch?v=e2rzQXx8uCc) of two young Reuters journalists discussing 'Herbalife' (in the light of Bill Ackman's irrefutable analysis), they will witness just how difficult it has become for casual observers to comprehend the extraordinary truth about  'MLM income opportunity' racketeering.

Yet again, mainstream financial journalists have proved the validity of my statement that:

In 1945, whilst most, contemporary mainstream commentators were unable to look beyond the ends of their noses, with a perfect sense of irony, George Orwell (1903-1950) presented fact as fiction in an insightful 'fairy story' entitled, 'Animal Farm.' He revealed that totalitarianism is merely the oppressors' fiction mistaken for fact by the oppressed. In the same universal allegory, Orwell described how, at a time of vulnerability, almost any people's dream of a future, secure, Utopian existence can be hung over the entrance to a totalitarian deception. Indeed, the words that are always banished by totalitarian deceivers are, 'totalitarian' and 'deception.' Sadly, when it comes to examining the same enduring phenomenon, albeit with an ephemeral 'Capitalist' label, most contemporary, mainstream commentators have again been unable to look further than the ends of their noses. However, if they followed Orwell's example, and did some serious thinking, this is the reality-inverting nightmare they would find.

At this point, it might be interesting for the many new readers of this Blog (and particularly senior staff at the US Securities and Exchange Commission) to take a look at some remarkable optical illusions which clearly demonstrate that the human mind can be easily deceived simply by changing the context in which we see things http://www.bbc.co.uk/news/magazine-11553099 .

A stalking-panther, when photographed in a jungle environment, is almost invisible to the human eye if shown only in black and white, but the same dangerous predator is immediately obvious to us, when shown in colour. 

Two rectangles of identical colour and shade, appear to be of different colour and shade when each one is surrounded by rectangles which alter the context in which our minds automatically see them. 

Deluded, core- 'Herbalife' adherents have been tricked into looking at their so-called 'MLM income opportunity' only in two dimensions, 'positive' and 'negative.' However, a growing mountain of quantifiable evidence proves that vast numbers of ill-informed victims have been deceived into entering this style of dissimulated cultic swindle, then, on the pretext that 'the duplication of a step-by-step positive plan of consumption and recruitment will lead to success,' they have been intellectually-castrated (without their fully-informed consent) so that their minds will only accept what their leaders have arbitrarily defined as 'positive,' and to exclude what these same cultic charlatans have arbitrarily defined as 'negative.' 

When seen only in the fake 'positive' context of: 'Business', 'Independence', 'Financial Freedom' , 'Low Risk' , 'Direct Selling',  'High Quality, Good-Value, Scientifically-Proven Products', 'Research','Development', 'gifts to charity', etc. so-called 'MLM income opportunities' can appear to be authentic. 




This dangerous inversion of reality has been further confirmed by celebrity/political/scientific/corporate endorsements contained in glossy-advertising. Self-evidently, when the wider-picture is examined (by persons with fully-functioning critical and evaluative faculties), all of this propaganda forms a pattern of ongoing, major, racketeering activity, because these artificially-created, fake 'positive' contexts have actually been financed by the proceeds of crime in order to perpetrate further crime and avoid being held to account. 

It is only when you take 'MLM income opportunity' rackets out of their artificially-created, fake 'positive' contexts, that their true, predatory nature becomes immediately obvious.

David Brear (copyright 2012)